Nonmedical Prescription Drug Use: Theory and Policy Implications

The illicit nonmedical use of prescription drugs is studied in a model where individuals with imperfectly observable health conditions seek prescription drugs for either medical or nonmedical reasons. The equilibrium number of medical and nonmedical users is endogenous and depends on economic and non-economic barriers to drugs consumption, such as pricing, health care costs, refill policies, monitoring programs, and the medical community’s prescription standards. The results show policies centered around raising economic barriers reduces nonmedical use but inhibits medical use due to imperfect screening. Alternatively, the results suggest a national drug registry may be more effective at preventing nonmedical use.