NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Matthew William Chesnes

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Working Papers

May 2014Banning Foreign Pharmacies from Sponsored Search: The Online Consumer Response
with Weijia (Daisy) Dai, Ginger Zhe Jin: w20088
Increased competition from the Internet has raised concerns for the quality of online prescription drugs. Given the illegality of importing unapproved prescription drugs into the U.S. and the pressure from the Department of Justice, Google agreed to ban pharmacies non-certified by the National Association of Boards of Pharmacy (NABP) from sponsored search listings. We study how the ban on non-NABP-certified pharmacies from sponsored search affects consumer search on the Internet. Using click-through data from comScore, we find that non-NABP-certified pharmacies receive fewer clicks after the ban, and this effect is heterogeneous. In particular, pharmacies not certified by the NABP, but certified by other sources (other-certified sites), experience a reduction in total clicks, and some of t...

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