In Whom We Trust: The Role of Certification Agencies in Online Drug Markets
AbstractThis paper uses an audit sample and a consumer survey to study the intriguing market of online prescription drugs facing US customers, and assesses the role that certification agencies play in online drug markets. On the supply side, we acquire samples of five popular brand-name prescription drugs from three types of online pharmacies: tier 1 are US-based and certified by the National Association of Boards of Pharmacy (NABP) or LegitScript.com, tier 2 are certified by PharmacyChecker.com or the Canadian International Pharmacy Association (CIPA) but not by NABP or LegitScript, tier 3 are not certified by any of the four agencies. Most tier 2 and tier 3 websites are foreign. We find that 37 of the 365 delivered samples are different from the products we ordered and therefore non-testable. Conditional on testable samples, Raman spectrometry test finds no failure of authenticity except for 8 Viagra samples from tier-3 websites. After controlling for testability and authenticity, tier 2 websites are 49.2% cheaper (p
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17955.
Date of creation: Mar 2012
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Find related papers by JEL classification:
- D18 - Microeconomics - - Household Behavior - - - Consumer Protection
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
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