Abstract:
Background: Citizens of high income countries rely on highly regulated medicines markets. However low income
countries’ impoverished populations generally struggle for access to essential medicines through out-of-pocket
purchase on poorly regulated markets; results include ill health, drug resistance and further impoverishment. While
the role of health facilities owned by non-governmental organisations (NGOs) in low income countries is well
documented, national and international wholesaling of essential medicines by NGOs is largely unstudied. This
article describes and assesses the activity of NGOs and social enterprise in essential medicines wholesaling.
Methods: The article is based on a set of interviews conducted in 2006-8 with trading NGOs and social enterprises
operating in Europe, India and Tanzania. The analysis applies socio-legal and economic perspectives on social
enterprise and market regulation.
Results: Trading NGOs can resist the perverse incentives inherent in medicines wholesaling and improve access to
essential medicines; they can also, in definable circumstances, exercise a broader regulatory influence over their markets
by influencing the behaviour of competitors. We explore reasons for success and failure of social enterprise in essential
medicines wholesaling, including commercial manufacturers’ market response; social enterprise traders’ own market
strategies; and patterns of market advantage, market segmentation and subsidy generated by donors.
Conclusions: We conclude that, in the absence of effective governmental activity and regulation, social enterprise
wholesaling can improve access to good quality essential medicines. This role should be valued and where
appropriate supported in international health policy design. NGO regulatory impact can complement but should
not replace state action.
