Minimum quality standards in global health. Impact and incentives (PDF)

Bachelor Thesis from the year 2016 in the subject Business economics - General, grade: 1,0, University of Würzburg (Lehrstuhl für Logistik und Quantitative Methoden), language: English, abstract: In developing countries people do not have adequate access to essential medicines. These countries' health care systems lack the financial resources for providing appropriate and comprehensive medical support. Moreover, there is a demand for medical innovations which allow fighting neglected diseases. Global health organizations provide assistance during the procurement process of medicines for countries which are subjected to these challenges. In order to ensure that only the right products for the intended purpose at appropriate quality levels reach those in need, these organizations require specific quality standards from their suppliers. With the demand for the implementation of quality assurance measures for pharmaceutical manufactures, the question about the impact of quality standards arises. This thesis provides answers to the question whether and how market participants are affected by these factors.

For this purpose, this work makes use of several papers dealing with the effects of introducing a minimum quality standard (MQS). Since organizations aim at ensuring security of supply at affordable prices, further questions evolve regarding new product development and competition between firms: How can organizations incentivize innovation and market entry of pharmaceutical manufacturers? Which tools do they use and can these tools address possible drawbacks of the introduction of a MQS? An answer to the latter question is given by connecting the results of game-theoretical models with the approaches of existing incentive mechanisms in global health.

The remaining part of this thesis is structured in the following way: Section 2 presents three organizations and their approaches to ensure the product's compliance with quality standards. In section 3, several game-theoretical models on MQS are analyzed and compared. The analysis highlights the models' findings, as well as differences between them and the models' construction. Section 4 considers several incentive mechanisms for suppliers.