What do drug monopolies cost consumers in developing countries?

This paper quantifies the effects of drug monopolies and low per-capita income on pharmaceutical prices in developing economies using the example of the antiretroviral drugs (ARVs) used to treat HIV.

► This study quantifies how monopoly power and purchasing power affect drug prices. ► Antiretrovirals' prices respond robustly to variation in firms' monopoly power. ► They respond modestly to variation in consumers' purchasing power. ► Richer nations pay a little more for drugs, but a lot more if a monopolist supplies them. ► The study's empirical approach to derive markups may be useful for other researchers.