THE IMPACT OF PRICE ELASTICITY OF DEMAND ON CONSUMPTION – AMPICILLIN/AMOXICILLIN MARKET SURVEY IN BULGARIA, 1995 AND 1999
Author(s)
Borissov B, Popova M, Koulaksazova R, Bulgarian Drug Agency, Sofia, Bulgaria
OBJECTIVES: To investigate how price elasticity of demand reflects consumers' response to price change by means of ATC/DDD analysis for evaluation of consumption and comparative sale and price analysis, referred to two antibiotics in oral dosage forms - ampicillin /A/ and amoxicillin /Ax/. METHODS: Data were gathered from: a) the import of wholesalers, b) the reports of local manufacturers for the domestic market. RESULTS: The increase of drug price under elastic demand results in decrease of demand /in packs/, while in inelastic demand higher price will cause increase in sales. Demand curve may affect drug consumption presented in DDD/1000/day as well as price per 1 g active substance. Two kinds of ampicillin /A1 and A2/ and amoxicillin /Ax1 and Ax2/, both market leaders in terms of demand, were analyzed. In 1995, A1 and Ax1 had lower price / per pack / and double sales than A2 and Ax2. However A1 and Ax1 had elastic demand - ? = 2.11 for A1 and ?= 2.32 for Ax1. The demand for A2 and Ax2 was inelastic / ? = 0.29 and ? = 0.58 /. In ampicillines A1 increased the price, A2 decreased the price. In 1999, they both had lower sales. Furthermore, DDD/1000/day for A1 dropped from 1.15 in 1995 to 0.56 in 1999, the price per 1 g active substance also was reduced. In amoxicillines, both products increased the price. Ax1, being in elastic condition in 1995, decreased the quantity of demand twice. Ax2, starting from inelastic market, increased the price and in 1999 obtained considerable augmentation of sales, higher DDD/1000/day / from 1.2 to 2.58 / and lower price per 1 g active substance. CONCLUSIONS: The degree of elasticity of demand shows how consumers feel about a particular product and its substitutes, thus having direct economical impact on consumption.
Conference/Value in Health Info
2000-11, ISPOR Europe 2000, Antwerp, Belgium
Value in Health, Vol. 3, No. 5 (September/October 2000)
Code
PID12
Topic
Economic Evaluation
Topic Subcategory
Cost/Cost of Illness/Resource Use Studies
Disease
Infectious Disease (non-vaccine)