In Whom We Trust: The Role of Certification Agencies in Online Drug Markets

Roger Bate, Ginger Zhe Jin and Aparna Mathur ()

No 17955, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This 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

JEL-codes: D18 D8 I18 (search for similar items in EconPapers)
Date: 2012-03
New Economics Papers: this item is included in nep-hea
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Published as Roger Bate, Ginger Zhe Jin and Aparna Mathur “In Whom We Trust: the Role of Certification Agencies in Online Drug Markets,” the B.E. Journal of Economic Analysis & Policy, Contribution Tier, Volume 14, Issue 1, Pages 111–150, ISSN (Online) 1935-1682, ISSN (Print) 2194-6108, DOI: 10.1515/bejeap-2013-0085, December 2013.

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