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Nonmedical Prescription Drug Use: Theory and Policy Implications

Author

Listed:
  • Gabriele Camera

    (Economic Science Institute, Chapman University)

  • Bryan Engelhardt

    (Department of Economics and Accounting, College of the Holy Cross)

Abstract

The illicit nonmedical use of prescription drugs is studied in a model where individuals with imperfectly observable health conditions seek prescription drugs for either medical or nonmedical reasons. The equilibrium number of medical and nonmedical users is endogenous and depends on economic and non-economic barriers to drugs consumption, such as pricing, health care costs, refill policies, monitoring programs, and the medical community’s prescription standards. The results show policies centered around raising economic barriers reduces nonmedical use but inhibits medical use due to imperfect screening. Alternatively, the results suggest a national drug registry may be more effective at preventing nonmedical use.

Suggested Citation

  • Gabriele Camera & Bryan Engelhardt, 2014. "Nonmedical Prescription Drug Use: Theory and Policy Implications," Working Papers 1402, College of the Holy Cross, Department of Economics.
    • Handle: RePEc:hcx:wpaper:1402
    as

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    File URL: https://hcapps.holycross.edu/hcs/RePEc/hcx/HC1402-Engelhardt-Camera_PrescriptionDrugs.pdf
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    References listed on IDEAS

    as
    1. Manolis Galenianos & Rosalie Liccardo Pacula & Nicola Persico, 2012. "A Search-Theoretic Model of the Retail Market for Illicit Drugs," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(3), pages 1239-1269.
    2. Engelhardt, Bryan & Rocheteau, Guillaume & Rupert, Peter, 2008. "Crime and the labor market: A search model with optimal contracts," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 1876-1891, October.
    3. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    4. Wilson, Charles, 1977. "A model of insurance markets with incomplete information," Journal of Economic Theory, Elsevier, vol. 16(2), pages 167-207, December.
    5. Darren Grant, 2005. "Information and sorting in the market for obstetrical services," Health Economics, John Wiley & Sons, Ltd., vol. 14(7), pages 703-719, July.
    6. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
    7. Camera, Gabriele, 2001. "Dirty money," Journal of Monetary Economics, Elsevier, vol. 47(2), pages 377-415, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    abuse; doctors; drugs; illegal drug use; health; medication; pain; search;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I1 - Health, Education, and Welfare - - Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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