Macroeconomic and Fiscal Effects of Increased Efficiency in Medicine Procurement: A General Equilibrium Analysis of the Colombian Health System
Authors
Ávila-Montealegre, Oscar
Bauhoff, Sebastian
Botero, Jesús
Giles Álvarez, Laura
León-Moncada, Santiago
Larrahondo, Cristhian
Lozano-Espitia, Luis Ignacio
Melo-Becerra, Ligia Alba
Ortiz-Hoyos, José Luis
Rodríguez-Ávila, Jesús
Editor
Publication date
2025-01-15
Document language
eng
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Abstract
This study analyzes the macroeconomic and fiscal effects of greater efficiency in medicines procurement in Colombia, using both static (computable) and dynamic general equilibrium models. The findings indicate that implementing an efficient drug procurement policy could reduce the total health system spending, with potential savings of up to 8.4% in the short term and up to 10.8% in the long term. These savings could be reinvested within the health system, allocated to other sectors, or used to reduce tax burden on capital, consumption, or social contributions. The latter option would increase production by up to 1.1%, investment by 1.7% and consumption by 0.8%. Potential measures to achieve such efficiency gains include promoting and purchasing generic drugs, conducting joint procurement, and implementing price regulation.
Description
Códigos JEL
C68 - Computable General Equilibrium Models, D58 - Computable and Other Applied General Equilibrium Models, E62 - Fiscal Policy, H21 - Efficiency; Optimal Taxation, H51 - Government Expenditures and Health, I11 - Analysis of Health Care Markets, I18 - Government Policy; Regulation; Public Health
item.page.subjectjelspa
Keywords
Medications, Health expenditure, Health system, Colombia, Taxes, General equilibrium models, Pharmaceutical policy
