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There is a tacit assumption amongst healthcare workers that all drugs of the same therapeutic type, whether innovator brands, generic brands, or a variety of copies of the product, are interchangeable. While there may be concern that some countries' products are more likely to be counterfeited, if one assumes the product is genuine, then the assumption holds that the product will work.

But anecdotal reports suggest that, even when counterfeits and otherwise obviously degraded or grossly substandard products are identified and removed from any sample set, quality problems remain for some products. Given that western countries source so many drug ingredients from abroad, for instance, up to 80% of the active ingredients in U.S. drugs are now made overseas, news reports of nefarious activity have made westerners wary of drugs produced in emerging economies. A recent Pew Trusts poll indicated that 54% and 70% of Americans distrusted drugs sourced respectively in India and China. But it is not acceptable in international trade law to boycott products based on suspicion alone, nor is it prudent since many drugs made in emerging economies are demonstrably fine and are certainly cheaper than innovator brands.

This working paper is the first part of a project looking at various characteristics, including product variability, of essential drugs in developing and mid-income countries. The publication that will follow this paper will assess actual drug variability; this working paper addresses what is probably a significant driver of drug quality--the legislative environment, and in particular, the registration process in which medicines are made and, more critically, sold. . . .

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Roger Bate is the Legatum Fellow in Global Prosperity at AEI. Emily Putze is a research assistant at AEI. Alexandra McPherson is at the Boston University School of Public Health. Sarah Naoshy is at the Boston University School of Public Health. Lorraine Mooney is a researcher, editor, economist and medical demographer at Africa Fighting Malaria.