Publication: Improving Access to Medicines in Developing Countries : Application of New Institutional Economics to the Analysis of Manufacturing and Distribution Issues
Date
2005-03
ISSN
Published
2005-03
Author(s)
Attridge, C. James
Preker, Alexander S.
Abstract
This paper examines alternative
frameworks for empirical analysis of supply side activities,
namely, the manufacture and distribution of medicine,
through the application of New Institutional Economics (NIE)
concepts. Attention is focused particularly upon the
potential utility of ideas from agency theory, transaction
cost analysis and contemporary ideas from strategy theory.
The major purpose of this paper is to use these theoretical
frameworks to provide insight for policy makers, when faced
with specific situations, whether in an international
agency, or a private company, or in defining a national
strategy. The analysis attempts to show the importance of
distinctions between ideas of 'make' or
'buy', between 'national self
sufficiency' and 'international purchasing'
strategies, the limitations of contractual agreements under
market governance and the crucial linkages between strategy
formulation, strategy implementation and the necessary
capabilities to achieve successful performance in practice.
The current international situation on the investment,
location and capacity of pharmaceutical manufacturing is
reviewed and likely future scenarios suggested.
Correspondingly current patterns of trade in medicines and
their likely development within the context of the WTO and
bilateral trade agreements are discussed. Against this
background the promise and the pitfalls for new forms of
public-private partnerships, which may offer attractive
alternatives to conventional structures are evaluated. The
implications of alternative future strategic options for
national governments in setting the balance between health
and industrial policies are examined and in particular the
extent to which a national manufacturing capability should
be developed or sustained. Similarly the scope for improving
low cost distribution systems for medicines, based upon a
mix of public and private sector channels, is assessed. We
conclude with suggestions for further development of a
transaction-based framework.
Citation
“Attridge, C. James; Preker, Alexander S.. 2005. Improving Access to Medicines in Developing Countries : Application of New Institutional Economics to the Analysis of Manufacturing and Distribution Issues. Health, Nutrition and Population (HNP)
discussion paper;. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/000887f3-815f-5623-921c-4e1c6431b39c License: CC BY 3.0 IGO.”