[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-56339-en":3,"doc-seo-56339-105":29,"detail-sidebar-cat-0-en-105":90},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":4,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},56339,1374391975076,"Riley","https://ap-avatar.wpscdn.com/avatar/14000253ca4ec9f6853?x-image-process=image/resize,m_fixed,w_180,h_180&k=1783305029341752051",7,"Healthcare","Increasing the Supply of Health Products in Underserved Regions","We analyze how social investors can incentivize manufacturers of health products to build production and distribution capacity for low- and middle-income country (LMIC) markets, where purchasing power is lower and demand risk is higher. The study evaluates four mechanisms: sales subsidies, variable-capacity subsidies, total-capacity subsidies, and minimum volume guarantees. An analytical framework links each instrument’s incentivized capacity to the social investor’s budget and parameters, showing clear dominance patterns under extreme ability-to-pay conditions.","Received: 27 May 2022  \nAccepted: 27 September 2023  \nDOI: 10.1111/poms.14085  \nORIGINAL ARTICLE  \nIncreasing the supply of health products in underserved regions  \nBurak Kazaz1   Scott Webster2   Prashant Yadav3,4  \n1Whitman School of Management, Syracuse University, Syracuse, New York, USA  \n2W. P. Carey School of Business, Arizona State University, Tempe, Arizona, USA  \n3Technology and Operations Management, INSEAD, Fontainebleau, France  \n4Center for Global Development, Washington, District of Columbia, USA  \nCorrespondence  \nScott Webster, W. P. Carey School of Business, Arizona State University, Tempe, AZ 85287, USA. Email: [scott.webster@asu.edu](scott.webster@asu.edu)  \nHandling Editor: Bradley Staats  \nAbstract  \nWe study mechanisms that encourage manufacturers of health products to build production and distribution capacity. This is important for low-and middle-income country (LMIC) markets where ability to pay is lower and demand risks are greater. Development finance institutions and philanthropies are beginning to utilize new instruments to incentivize manufacturers to build production/distribution capacity for LMIC markets. The goal of this paper is to understand the effectiveness of such mechanisms indifferent settings. We examine four instruments: (1) subsidy proportional to unit sales (sales subsidy),(2) subsidy proportional to unit capacity (variable-capacity subsidy),(3) subsidy proportional to total capacity investment (total-capacity subsidy), and (4) a minimum volume guarantee. We analyze incentivized capacity as a function of the social-investor budget for each instrument. We show how our framework can be used to identify a social investor’s preferred instrument given relevant parameter estimates, and we provide insight into the type of settings where a particular instrument dominates. A sales subsidy dominates when ability to pay is very low; a total-capacity subsidy dominates when ability to pay is low. Outside of these settings, instrument preference is nuanced, though a sales subsidy is dominated by at least one other instrument. When ability to pay is moderate, a variable-capacity subsidy tends to be preferred under high variable-capacity cost and high budget, a volume guarantee tends to be preferred under low variable-capacity cost and high budget, and a total-capacity subsidy tends to be preferred under low budget.  \nKEYWORDS  \nglobal health, private investment, social investor  \n1  INTRODUCTION  \nThis paper examines mechanisms to encourage manufacturers of global health products to build production capacity in order to treat various diseases. We study the impact of alternative actions by a social investor that are intended to incentivize a manufacturer to invest in capacity for distribution to underserved markets. A social investor is defined as an investor who uses market-like instruments to achieve social impact returns from their investments. Examples of social investors include governments of developed nations, development finance institutions (e.g., International Finance Corporation, the US DFC, and the European Development Finance Institutions), and philanthropic foundations,(e.g., Bill and Melinda Gates Foundation, Children’s Investment Fund Foundation) . Development finance institutions  \nAccepted by Bradley Staats, after four revisions.  \nand philanthropic foundations are increasingly using incentivizing instruments, in addition to grants, to meet their social/philanthropic objectives (Kania et al., 2015) .  \nOur focus is on existing health products with known efficacy but for which the manufacturer has not invested in production/distribution capacity to serve those in low- and middle-income country (LMIC) markets (e.g., Zambia, Tanzania, Kenya, Senegal, South Africa) . One reason for the lack of investment to serve LMIC is low ability to pay, 1 for example, the price–volume relationship is too low to recover the manufacturer’s costs. In developed-country markets, such asthe United States, EU","cbCaibie0PoXIyTi","https://ap.wps.com/l/cbCaibie0PoXIyTi","pdf",987323,1,17,"English","en",105,"# Introduction\n## Investment gaps in LMIC markets\n## Drivers of low manufacturer investment\n## Demand risk and uncertainty in LMIC markets","[{\"question\":\"Why is increasing health product supply in underserved regions challenging for manufacturers?\",\"answer\":\"LMIC markets feature lower ability to pay and higher demand uncertainty, which reduces the likelihood that manufacturers can recover costs and justify production/distribution capacity investments.\"},{\"question\":\"Which four incentive instruments are evaluated in the study?\",\"answer\":\"The paper examines (1) sales subsidies proportional to unit sales, (2) variable-capacity subsidies proportional to unit capacity, (3) total-capacity subsidies proportional to total capacity investment, and (4) minimum volume guarantees.\"},{\"question\":\"When does a sales subsidy tend to dominate compared with other instruments?\",\"answer\":\"A sales subsidy dominates when ability to pay is very low, reflecting that incentives tied to sales better overcome weak purchasing 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