Deregulation and access to medicines: the Peruvian experience

How does the deregulation of medicine influence access to drugs? This paper provides an economic policy assessment of the effects of medicine deregulation drawing on the Peruvian experience between 1991 and 2006. As in other low-income countries, health insurance development is inadequate, drug expenditure is mostly paid out-of-pocket and approximately one third of the Peruvian population has limited access to ‘essential medicines’. Market deregulation in this context can exert an impact on prices and hence reduce access to medicines. Based on this evidence, we find that product and price deregulation of the medicines market appears to have reduced consumer trust of locally produced medicines, which in turn incentivised a switch to branded and more expensive drugs. The latter resulted in a further decreased access to medicines.