Why no input monopolies?

Central supply-side purchase of drugs and educational materials tends to be inefficient and leads to shortages. We believe that this is important because there are few stakeholders that are inherently motivated to defend the public interest.

Therefore, in this logic government must assure that facility managers have free access to several distributers operating in competition. In Europe and the USA, the law prohibits conflicts of interest because monopolies typically lead to a loss of welfare. However this seems not to stop several organisations from Europe or the USA from promoting public input monopolies in low-income countries.

The case of the Democratic Republic of Congo:
Monopolization of essential drugs distribution was imposed in DRC through provincial distribution centres with the argument that it would assure good quality drugs. This argument for monopolies was not confirmed by several Cordaid studies conducted between 2006 and 2008 in the province of South Kivu. They showed that the monopolization of essential drugs by international NGOs and government in two districts created serious drug stock outs in health facilities. The stock outs were confirmed by patient satisfaction studies among 200 households as well as by interviews with health workers. In contrast, in two health districts that applied PBF and where health facilities were allowed to purchase essential drugs from any distributor accredited by the provincial health authority, there were no drug shortages (Soeters et al., 2011).

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