Evidence from numerous studies shows that emerging markets have far more poor quality drugs than western markets. There are many reasons for this, but one reason, investigated in this paper, is the possibility that smaller, often privately-owned, pharmacies take greater risks with drug procurement than larger organizations, which are often franchises or major pharmacy chains. The limited data available weakly support the hypothesis, with 14.4% of samples from smaller pharmacies failing quality control and 9.4% of samples from larger pharmacies failing. Ongoing research will hopefully provide a more robust testing of the hypothesis, as well as provide a fuller explanation.
Roger Bate is the Legatum Fellow at AEI.