Cheap Medicine, Costly Doubts: Antibiotic Quality Trade-offs

In many countries, access to affordable, quality-assured, and effective medical products remains limited. Recent evidence from Nigeria suggests that approximately 25% of essential medicines are either substandard or falsified from both formal and informal suppliers (Gabel et al. 2024). The widespread presence of these substandard or falsified drugs – hereafter referred to as poor-quality medicines – can be attributed to weak regulatory enforcement, inadequate oversight by gatekeepers, and poor supply chain management. This issue is particularly pronounced in low-income countries, where limited budgets constrain the enforcement of regulations and the operational capacity of monitoring and testing authorities (WHO 2017, 2024). Policies aimed at addressing the proliferation of poor-quality medicines often involve a trade-off: strengthening regulatory enforcement may improve drug quality in the market but can also lead to higher prices, potentially reducing access for consumers. In the presence of this trade-off, policy decisions regarding the reduction of poor-quality medicines require an understanding of consumer preferences. For example, suppose a regular testing initiative increases certainty about drug quality by 14%, but this improvement comes at a 10% increase in prices for consumers. Whether such a program should be implemented depends on consumers’ willingness to accept price increases in exchange for improved quality. This study seeks to measure this trade-off. To achieve this, we have designed a survey experiment that we plan to implement nationally across Nigeria. The experiment will be embedded within a short questionnaire administered online. In this experiment, we will present participants with a hypothetical new government program designed to improve the quality of antibiotic medicines. Participants will receive information about the program’s outcomes, including the results of market testing that establish the proportion of high-quality versus poor-quality drugs, as well as the associated increase in prices. We then ask respondents to evaluate the overall success of the program. By randomly varying both the ratio of high to poor quality medicines and the price increase, we can estimate consumer preferences over these trade-offs. Specifically, we aim to identify indifference curves that capture the trade-off between increased certainty about drug quality and higher prices while holding respondents’ overall assessment of the program constant.