The rise in healthcare expenditures has prompted many countries to adopt policies promoting generic drugs, aimed at reducing costs and enhancing drug availability. However, the impact of these policies on patient adherence remains understudied. This paper examines the effects of increased drug availability on medication adherence, focusing on China’s 4+7 volume-based procurement policy. Our findings reveal a counter-intuitive outcome: enhanced drug availability is associated with reduced patient adherence, as evidenced by a 0.74-day increase in missed medication days in pilot cities. Through detailed analysis, we identify key moderating factors, including market structure, drug market presence, and active ingredient efficacy. Additionally, we employ a causal machine learning model to assess treatment heterogeneities, finding that steep price reductions exacerbate non-adherence. These results challenge the conventional view that greater availability improves adherence and highlight the unintended consequences of aggressive generic drug promotion. Our study provides critical insights for policymakers, suggesting the need for balanced approaches that consider both cost savings and patient adherence to achieve optimal health outcomes.
