The Paradox of Abundance: How Enhanced Drug Availability Affects Consumer Compliance

Abstract

While drug shortages draw significant attention from policymakers worldwide, an increase in drug availability could trigger unexpected behavioral changes. This study examines the effects of enhanced drug accessibility on consumer compliance with prescribed treatments. Our research utilizes a policy introduced in 11 Chinese cities, which considerably increased the accessibility of selected drugs. Through a quasi-experimental design, we unveil a policy-triggered increase in the compliance gap in the pilot cities by 43% more than those in non-pilot cities. This suggests a potential decline in medication compliance as drug accessibility increases. Our finding also indicates that the effect of the policy varies significantly across different market structures. In more concentrated markets, consumer compliance seems less responsive to drug availability changes. Utilizing a generalized causal forest approach, our study reveals that increased drug availability significantly lowers patient compliance. This impact is especially marked for medications that see substantial price decreases due to the policy, in contrast to drugs with only slight price reductions.

Keywords: Drug availability, patient compliance, causal forest

JEL Classification: M31