14538: Generic Drug Transparency: Testing a Regulatory Policy Proposal (session 25595)

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Consumers who take generic drugs have little ability to determine where their drugs are manufactured or the quality of their drugs. The pharmaceutical regulator in the United States (U.S.), the Food and Drug Administration (FDA), possesses both manufacturing location and quality data, but does not release this data to the public. A Congressional-commissioned National Academy of Sciences Engineering and Medicine (NASEM) report recommended that the FDA increase drug transparency by requiring manufacturers put manufacturing location and quality ratings on drug labels. The report made these recommendations to facilitate consumer preferences that may reward high quality manufacturers and U.S. drug manufacturing. The FDA has not acted on these recommendations, in part, we propose, because doing so contradicts FDA messaging, which states that all generic drugs approved via the same original drug are fully interchangeable, regardless of manufacturing location. This study is a test of the drug transparency recommendations made in the NASEM report. We implement two randomized choice-based conjoint analysis experimental studies with 1,500 U.S. participants to test these recommendations. Results indicate a strong preference for U.S.-made generic drugs when quality is not transparent, implying that consumers may not be fully convinced that all generic drugs are as interchangeable as the FDA claims. Including quality ratings in addition to manufacturing location removes much of the pro-U.S. bias, although not completely. Post hoc analysis explores a potential mechanism explaining these results and a simulated market share analysis provides economic implications of our experimental findings.

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