"The Impact of Self or Social-regarding Messages: Experimental Evidence from Antibiotics Purchases in China" (with Daixin He and Fangwen Lu)
Journal of Development Economics, June 2023
We study two interventions in Beijing, China, that provide patients with information on antibiotic resistance via text message to discourage the overuse of antibiotics. The messages were sent once a month for five months. One intervention emphasizes the threat to the recipient’s own health and is found to have negligible effects. The other intervention, which highlights the overall threat to society, reduces antibiotics pControlling pharmaceutical expenditure and improving drug affordability are major challenges for governments worldwide. Yet, non-price barriers to healthcare utilization make the impact of affordability improvements uncertain. This paper evaluates the effects of a large price reduction on drug utilization and adherence through a competitive bidding procurement program in China.Using a difference-in-differences design with comparable drugs as controls and visit records from over 300 primary care facilities across an entire administrative area, we find that the reform substantially reduced targeted drug prices and increased demand among underinsured patients, whose purchases rose 28\% more than those of insured patients. This response came from both new and existing users. We further find that adherence improved among underinsured patients, who exhibited lower baseline adherence. These findings suggest that government bargaining power to reduce drug prices may disproportionately benefit disadvantaged groups, thereby carrying important distributional implications.urchases by 17% in dosage without discouraging healthcare visits and other medicine purchases. The results demonstrate that prosocial messaging can have the potential to address public health issues that require collective action.
"Drug Affordability, Utilization and Adherence: Evidence from a Prescription Drug Price Reduction in China" (with Daixin He)
Controlling pharmaceutical expenditure and improving drug affordability are major challenges for governments worldwide. Yet, non-price barriers to healthcare utilization make the impact of affordability improvements uncertain. This paper evaluates the effects of a large price reduction on drug utilization and adherence through a competitive bidding procurement program in China.Using a difference-in-differences design with comparable drugs as controls and visit records from over 300 primary care facilities across an entire administrative area, we find that the reform substantially reduced targeted drug prices and increased demand among underinsured patients, whose purchases rose 28\% more than those of insured patients. This response came from both new and existing users. We further find that adherence improved among underinsured patients, who exhibited lower baseline adherence. These findings suggest that government bargaining power to reduce drug prices may disproportionately benefit disadvantaged groups, thereby carrying important distributional implications.
"Improving Regulation for Innovation: Evidence from China’s Pharmaceutical Industry" (with Ruixue Jia, Xiao Ma and Yiran Zhang)
CERP Working Paper 18698; NBER Working Paper 31976; Most Recent Version
This study investigates how enhanced regulation can promote innovation, focusing on the impacts of a significant regulatory reform in China's pharmaceutical sector implemented in 2015. Inspired by regulatory practices in the U.S., the reform aimed to address application backlogs and reduce administrative waiting time for new drug development. Using data at the drug and firm levels during 2011--2021, we make three main findings: (1) drug categories experiencing improved approval time witnessed a surge in investigational new drug applications and related clinical trials; (2) the innovation surge was driven by both Chinese and foreign firms and largely reflects genuine improvements within China rather than relocation from other countries; and (3) the reform led to changes in firm composition, attracting innovative new firms and boosting overall drug innovativeness (measured by whether drug applications adopt targets already established in the U.S. or Europe and chemical structure similarity of drugs). Our findings imply that regulatory barriers can hinder the entry of innovative firms and suggest that latecomers could boost their innovation potential by adopting specific, effective regulatory practices from frontier countries.
"Tradeoff Between Price Reduction and Choice Distortion in Drug Procurement" (with Ran Li)
The rapid rise in pharmaceutical expenditures presents a global policy challenge. While policies that achieve price reductions are widely believed to enhance affordability and patient welfare, these interventions may yield unexpected outcomes. China's 2019 centralized drug procurement reform successfully lowered prices through competitive bidding but limited brand choice as domestic generic producers won most bids. Analyzing 1.4 million patient records from Beijing healthcare centers through a difference-in-differences framework, we found that patients with brand preferences (60.34% of pre-policy purchasers) significantly reduced healthcare engagement post-policy, contrasting with increased engagement among those without brand preferences. This highlights the dual effects of generic entry: improved affordability alongside potential utilization suppression due to preference mismatches, suggesting that pharmaceutical policies should balance cost containment with patient-centered care considerations.
"Clinical Controversy and Health Utilization: Evidence from the Dengvaxia Scandal in the Philippines" (with Emma Dean)