From the IPA Blog

Harnessing Market Forces to Fight Fake Drugs

Oct 05/12 | From the blog
by David Yanagizawa-Drott
 
Editor's Note: David Yanagizawa-Drott is Assistant Professor of Public Policy at Harvard's Kennedy School of Government.  In this guest post he talks here about his research presented recently at our Impact and Policy Conference.
 
At the Impact and Policy conference in Bangkok, I talked about the prevalence of fake antimalarials, and drew upon evidence from my study with J-PAL affiliates Martina Björkman-Nyqvist and Jakob Svensson to explore a potential solution to the problem.
 
fake or authenticThe prevalence of counterfeit drugs is a global public health concern, with evidence from Sub-Saharan Africa and South East Asia indicating that 35% of medicines in public and private outlets are fake.The problem is exacerbated for antimalarial drugs because fake antimalarials are not only visually identical to authentic drugs, but the quality of the drug is only partially inferable when used. Researchers agree that fake and substandard antimalarial drugs could be wrecking the chances of winning the war against malaria in Africa, where at least half a million people die of malaria every year. However, there is essentially no evidence of how supply and demand forces drive drug quality, or how to combat the problem.
 
For our study, we partnered up with the NGOs BRAC and Living Goods in Uganda, and went door-to-door selling authentic antimalarials at a price 20-25 percent lower than that prevailing in the local market. By randomly assigning the intervention across villages, we could test our main hypothesis: if consumers had access to one provider of authentic medication, they would be able to compare health outcomes across outlets, and would stop buying from outlets that sell fake drugs. To avoid a decline in both reputation and demand, drug outlets would be prompted to increase the quality and decrease the price of their antimalarials.
 
 Another question we were interested in was the effect of misconceptions about malaria on market outcomes. Misconceptions about malaria can lead to overestimation of antimalarial drug quality, since consumers won’t learn about drug quality by comparing across health outcomes. When many consumers suffer from such misconceptions, reputational forces on drug sellers are weaker, and there is no incentive to improve drug quality.
 
The impact of our intervention was a 20-percentage point reduction in fake drug sales, 18 percent lower prices, and a 39 percent increase in antimalarial medicine use. Furthermore, effects on drug quality were lower in villages where a large share of the consumers held false beliefs about what causes malaria.
 
In sum, high quality products, priced competitively, can drive out bad ones even when quality is not directly observable, but the mechanism appears weaker when consumers are less able to infer quality. There are two main policy takeaways. First, NGOs intervening in private markets not only can have a direct effect on drug quality, but can also have effects at the market level. In fact, the intervention provides grounds for thinking that NGOs may provide a partial solution to the public health problem of poor quality drugs. Second, supplemental education addressing poor knowledge and misconceptions about malaria transmission may not only improve the match between illness and treatment, but may also raise drug quality on the market through households’ ability to infer quality.
 
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Comments

Malaria challenging professionals

Dear Reasercher 

I am working in South Sudan, there is more  problems in Antimalarial and Antibiotics treatment

imported from China and India. I my self as a Clinician tried to study on these medications and

really challenging the professionals ,si nce the past May 20013 I have tried to study on  100 registered patients who are positive for plasmodium falciparum  and they took Artemether injection manufactured in China almost 65% was positive after treatment and  the rest was negative and cured.These shows the drug is fake by 65%..

Now recently in June I saw 20 patients who were positive for malaria and took Artimesinin derivatives treatment 5 of them were positive after treatment and 4 patients came back after get cure and started the same complaints and 11 patients are competely cured and negative for Blood film check up.My comment here is the Chinees and the Indians drugs are cheap but fake .So if some NGO'Stried to compensate the loss of effective drug manufacturers the problem will be solved.

Thank You.

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