1 Department of Economics, Metropolitan Autonomous University, Iztapalapa, México.
2 Department of Electrical Engineering, Metropolitan Autonomous University, Iztapalapa, México.
3 Department of Health Sciences, Metropolitan Autonomous University, Iztapalapa, México.
World Journal of Advanced Research and Reviews, 2023, 20(01), 619–624
Article DOI: 10.30574/wjarr.2023.20.1.2108
DOI url: https://doi.org/10.30574/wjarr.2023.20.1.2108
Received on 06 September 2023; revised on 13 October 2023; accepted on 16 October 2023
Objective. This study aims to analyze the collusion of pharmaceutical companies that hinders competition in the pharmaceutical market and if this phenomenon leads to an increase in overpricing in government drug purchases and a decrease in social welfare.
Design and setting. A descriptive analysis was carried out based on drug purchase data by the Mexican Social Security Institute (MSSI) to the leading companies in the pharmaceutical sector, and a well-being changes analysis was carried out using the Harberger triangle method.
Results. The data shows that a consortium of drug suppliers sold metformin at a premium to one of the prominent public health institutes in the country. Furthermore, there was a highly significant decrease in well-being indices.
Conclusion. Industry executives and government officials were acting during that period as a cartel, colluding to set high prices during 2008-2018. Collusion hinders competition between companies; consequently, the consumer does not always have access to the lowest available drug price.
Collusion; Price-fixing; Drug pricing; Triangle of Harberger; Cartelized markets; Health expenditures
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Jesús Díaz-Pedroza, Carmen Zúñiga-Trejo, Raúl Enrique Molina Salazar, Fabiola Martínez-Licona and José Federico Rivas-Vilchis. Collusion and price-fixing of drugs in Mexico: The case of metformin (2008-2018). World Journal of Advanced Research and Reviews, 2023, 20(01), 619–624. Article DOI: https://doi.org/10.30574/wjarr.2023.20.1.2108
Copyright © 2023 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution Liscense 4.0