OBJECTIVES : Tender management for biotechnological drugs with expired patents represents an important occasion in which buyers may optimize health expenditure and system sustainability. The aim of this analysis is to investigate which are the elements that affect the variation of price offered in tenders. The identification of these “price determinants” and their impact will bring to a better understanding of the bidding patterns of participants, helping to reach a more sustainable formulation of tender specifications.

METHODS : A multiple linear regression model accounts for the following elements: number of participants, scope level (regional or local) of the procedure, quantity up for bid, time duration of the contract, previous price offered, current auction base price, type of procedure, other region-specific factors, other company-specific factors.

RESULTS : The price determinants considered are statistically significant: an increase in the number of competitors, in the quantity up for bid and in the duration of the supply contract, leads to a lower price, as does the regional dimension of the procedure. In the same way, auction-based price is a good leverage to lower the price, just as the price previously offered influences the next bid. The type of procedure also has an effect on price.

CONCLUSIONS : The results suggest that the bigger the tender, the lower the price offered. However, tenders aggregation shall be operated with extreme caution, because there is a potential trade-off between concentration and competitiveness. On one hand, concentration raises the stakes and induces suppliers to offer a lower price. On the other hand, it reduces the chances of rematch for the unsuccessful bidder. Since those who do not win a supply contract cannot sell in that territory, losers could leave the market altogether. This would decrease the number of suppliers in the market, eroding competition, which could subsequently lead to higher prices and slow innovations.