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Fiscal procurement-cost implication of ~$27.8M per year

🟡 Applying the selection-bounded urgency gap to the scale of litigation-driven pharmaceutical procurement yields a fiscal procurement-cost implication of about \(27.8 million per year** (range **\)23.9–31.7M), built from a Lee-bounds midpoint of 18.5%, an admissibility share of 50%, and annual litigated spending of $300M (AN-011). This is a fiscal procurement-cost calculation — what the urgency gap implies for the prices the state pays on litigated orders — and is not a full welfare estimate.

Economic intuition

This translates a price gap into a budget line, and nothing more. It says the state pays roughly this much extra to source litigated medicines through fragmented urgent channels — it does not weigh that against the health the orders secure. Built on the bounded midpoint and only the admissible share of spending, it is deliberately a conservative accounting figure, not a verdict on whether judicial enforcement of access is worth its cost.

The figure is deliberately conservative in construction: it applies the midpoint of the bounded gap rather than the naive 29.5% difference, and it scales only the admissible portion of litigated spending. It translates the estimated price difference into a budgetary magnitude, leaving aside the benefits of securing timely delivery, any general-equilibrium responses, and the consumer-side value of the medicines obtained. The number answers a narrow accounting question about procurement prices on the litigated channel, not the broader question of whether the judicial enforcement of access is worthwhile.

Caveat. This is a fiscal procurement-cost implication, not a full welfare estimate. It inherits every assumption behind the bounded urgency gap — the Lee bounds rest on monotonicity, and the administrative channel is the closest feasible urgent-procurement comparison rather than a random or clean assignment — and adds an admissibility share and a spending figure, each of which carries its own uncertainty (hence the $23.9–31.7M range). It does not net out the value of timely access secured by the court orders. The reading is 🟡 because it rests on single-source own-project estimates in São Paulo BEC.

Sources.

  • Own analysis: AN-011 (procurement-cost calculation: Lee midpoint, admissibility share, litigated spending, range).
  • Cross-refs: H:utg-gap-selection-bounded.
  • Validation: backing scripts 46_procurement_cost_bound.R, 40_utg_lee_bounds.R, 50_v9_outputs.py.