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Poor Quality Drugs and Global Trade: A Pilot Study

Author

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  • Roger Bate
  • Ginger Zhe Jin
  • Aparna Mathur
  • Amir Attaran

Abstract

Experts claim that some Indian drug manufacturers cut corners and make substandard drugs for markets with non-existent, under-developed or emerging regulatory oversight, notably Africa. This paper assesses the quality of 1470 antibiotic and tuberculosis drug samples that claim to be made in India and were sold in Africa, India, and five mid-income non-African countries. We find that 10.9% of those products fail a basic assessment of active pharmaceutical ingredients (API), and the majority of the failures are substandard (7%) as they contain some correct API but the amount of API is under-dosed. The distribution of these substandard products is not random: they are more likely to be found as unregistered products in Africa than in India or non-African countries. Since this finding is robust for manufacturer-drug fixed effects, one likely explanation is that Indian pharmaceutical firms and/or their export intermediaries do indeed differentiate drug quality according to the destination of consumption.

Suggested Citation

  • Roger Bate & Ginger Zhe Jin & Aparna Mathur & Amir Attaran, 2014. "Poor Quality Drugs and Global Trade: A Pilot Study," NBER Working Papers 20469, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:20469
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    References listed on IDEAS

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    1. Panle Gia & Pinelopi K. Goldberg & Shubham Chaudhuri, 2006. "Estimating the Effects of Global Patent Protection in Pharmaceuticals: A Case Study of Quinolones in India," American Economic Review, American Economic Association, vol. 96(5), pages 1477-1514, December.
    2. Margaret K. Kyle & Anita M. McGahan, 2012. "Investments in Pharmaceuticals Before and After TRIPS," The Review of Economics and Statistics, MIT Press, vol. 94(4), pages 1157-1172, November.
    3. Andreas Seiter, 2010. "A Practical Approach to Pharmaceutical Policy," World Bank Publications, The World Bank, number 2468, November.
    4. Margaret Kyle & Yi Qian, 2014. "Intellectual Property Rights and Access to Innovation: Evidence from TRIPS," NBER Working Papers 20799, National Bureau of Economic Research, Inc.
    5. Duggan, Mark & Goyal, Aparajita, 2012. "Pharmaceutical patents and prices : a preliminary empirical assessment using data from India," Policy Research Working Paper Series 6063, The World Bank.
    6. Bate, Roger & Jin, Ginger Zhe & Mathur, Aparna, 2011. "Does price reveal poor-quality drugs? Evidence from 17 countries," Journal of Health Economics, Elsevier, vol. 30(6), pages 1150-1163.
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    Cited by:

    1. Mondal, Shamim S. & Pingali, Viswanath, 2015. "Competition Law and the Pharmaceutical Sector in India," IIMA Working Papers WP2015-11-02, Indian Institute of Management Ahmedabad, Research and Publication Department.
    2. Margaret Kyle & Yi Qian, 2014. "Intellectual Property Rights and Access to Innovation: Evidence from TRIPS," NBER Working Papers 20799, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • I1 - Health, Education, and Welfare - - Health
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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