Model of the choice of public procurement procedure on the example of medicines

Keywords: government procurement, electronic auction, competition, pharmaceuticals

Abstract

Subject. The results of theoretical and empirical studies indicate that for simple and standardized goods, the auction is the most effective and reliable procedure for selecting the best supplier. However, when the quality of the purchased good is particularly important, simple price criteria used in electronic auctions for determining the supplier may be ineffective. The article evaluates the preference for customers (Russian hospitals) of procedures for the medicines procurement.
Objectives. The main objective of the study is to check whether auctions may turn out to be not preferable procedure for the customer for purchasing complex goods (for example, drugs) indeed. The study evaluates the factors (including the qualitative characteristics of the goods and the customer's attitude to quality) that affect the choice of the purchasing procedure by the customer, and then analyzes the influence of these factors and the choice of the procedure on the level of purchase prices.
Methodology. In the process of evaluating the effectiveness of procedures for the procurement of medicines, the authors use methods of qualitative and quantitative analysis. The empirical basis is collected from data from the site of the unified information system in the field of public procurement.
Results. The authors provided an empirical analysis of the process of choosing a procedure for the medicines procurement by the customer, and evaluated the price effectiveness of the procedures used in the procurement of medicines.
Conclusion. The customer chose the auction procedure more often in conditions of high competition, low value and cost of quality, a lower hospital rating; in auction more often less experienced supplier is choosen. The level of purchase prices is higher when the customer chooses the procedure of a single supplier, when the competition is higher, the value of quality of the purchased goods is higher, and when a more experienced supplier is choosen. Customers manage to achieve a greater price reduction in comparison with the maximum bid (as well as in comparison with retail prices) when they choose the auction procedure, when the competition and value of the quality is higher, and when the less experienced supplier is choosen.

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Author Biography

Aleksandra M. Zhemkova, Institute for Applied Economic Research, Russian Presidential Academy of National Economy and Public Administration

Research Fellow, Center for Industrial Markets Research, Institute for Applied Economic Research, Russian Academy of National Economy and Public Administration, Moscow, Russian Federation

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Published
2020-09-30
How to Cite
Zhemkova, A. M. (2020). Model of the choice of public procurement procedure on the example of medicines. Eurasian Journal of Economics and Management, (3), 48-59. https://doi.org/10.17308/econ.2020.3/3104
Section
Economy, Organization and Management of the Enterprises, Branches, Complexes