Carrot or Stick? The Effect of Supply-Side Regulations on Opioid Prescription Rates and Overdose Mortality
56 Pages Posted: 11 Feb 2022
Date Written: August 25, 2021
The opioid epidemic continues to wreak havoc across the United States. To abate the crisis, state policymakers have enacted both supply-side (i.e., restrictions on physicians and pharmacies) and demand-side (i.e., managing customer demand) regulations to curb the pernicious effect of unfettered opioid abuse. Yet, while the effect of demand-side regulations has received significant attention in prior work, research on the efficacy of supply-side regulations in curbing consumption is nascent. In this work, we explore the impact of supply-side regulations on intended (prescription rates) and unintended (overdose deaths) opioid consumption outcomes. In addition, we examine how advertising awareness campaigns and state political ideology moderates the focal relationships. We examine these relationships using a difference in difference approach which exploits the phased rollout of supply-side regulations across states from 2008 to 2017. Results indicate that supply-side regulations yield both a significant decline in prescription rates and a concomitant increase in drug overdose deaths, suggesting consumers may be turning to illegitimate markets to satiate their needs. Moreover, this effect is moderated by state awareness campaigns and state political ideology, suggesting social factors can temper the reaction to policy actions. Implications for marketing theory and public policy practice are discussed.
Funding Information: None to declare.
Declaration of Interests: None to declare.
Keywords: Opioids, market regulations, difference-in-difference, political ideology
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