||Since the 1980s, the market structure of vaccines has become increasingly oligopolistic,
and in some cases, monopolistic. Alongside these supply trends, we see the emergence
and growth of group procurement schemes on the demand side of the market. National
governments and international organizations procure vaccines on behalf of end users.
Two such organizations include the UNICEF Supply Division and the PAHO EPI Revolving
Fund, for which participation is based on income or geography. Consistent with one
of the main goals of group procurement, these groups obtain price discounts on vaccines
relative to the private sector. This paper seeks to disentangle two possible explanations
for this observed price dispersion using vaccine price data over the years 2002-2012
from UNICEF, PAHO, and the U.S. The two explanations are that of price discrimination
and bargaining power. Using proxy variables in a fixed eff ects model, I find that
price discrimination does have a signifi cant impact on price discount. I also fi
nd support for a bargaining power e ffect, however, with less certainty, and the existence
of supply constraints. These fi ndings have important policy implications for national
governments, as well as procurement groups.