Price Subsidies, Diagnostic Tests, and Targeting of Malaria Treatment: Evidence from a Randomized Controlled Trial
Both under- and over-treatment of communicable diseases are public bads. But efforts to decrease one run the risk of increasing the other. Using rich experimental data on household treatment-seeking behavior in Kenya, we study the implications of this tradeoff for subsidizing life-saving antimalarials sold over-the-counter at retail drug outlets. We show that a very high subsidy (such as the one under consideration by the international community) dramatically increases access, but nearly half of subsidized pills go to patients without malaria. We study two ways to better target subsidized drugs: reducing the subsidy level and introducing rapid malaria tests over-the-counter.
We thank the Clinton Health Access Initiative and Novartis Pharmaceuticals for financial support. We are very grateful to the Kenya Ministry of Health, KEMRI-Wellcome Trust Collaborative, Kenya CDC, PSI-Kenya, Jean Arkedis, Justin Cohen and Oliver Sabot for consultation and feedback on the study design and six anonymous referees, Achyuta Adhvaryu, David Canning, Melissa Dell, Rebecca Dizon-Ross, Dave Donaldson, Kelsey Jack, Asim Khwaja, Ramanan Laxminarayan, Anup Malani, Sendhil Mullainathan, Sarah Reber, Jon Skinner, John Strauss and numerous seminar participants for helpful feedback. We thank Katie Conn and Sarah Walker for excellent study coordination, Moses Baraza for smooth implementation of the project and the IPA-Kenya field officers for superb data collection. This research was not the product of any paid consulting relationship and we have no financial interest in the topic of this paper. All errors are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Jessica Cohen & Pascaline Dupas & Simone Schaner, 2015. "Price Subsidies, Diagnostic Tests, and Targeting of Malaria Treatment: Evidence from a Randomized Controlled Trial," American Economic Review, American Economic Association, vol. 105(2), pages 609-45, February. citation courtesy of