Internet medicine and pharmacies: Private choice, public risks, and healthcare business

Abstract

IntroductionThe injury or liability principle articulated by the classic political economist, John Stuart Mill, proscribes state intervention in private choices and actions that do not impose harmful costs on others. This study determines its validity in the context of the Internet model of healthcare business. Specifically, it examines the supply chain, marketing, and (vertical and horizontal) third party effects of online medicines and medical information.MethodsTrending was performed to extract underlying patterns of online production and consumption behavior in a time series. Although Internet pharmaceutical markets are borderless and global, the study delimits the regulatory framework to the United States.ResultsUtility-maximizing preferences combine with cognitive tendencies to build and sustain consumer trust and confidence in Internet-based medicines and healthcare services. These provide distinct supply chain, marketing, and networking advantages to rogue pharmacies, while evading traditional regulatory safeguards, at the expense of drug quality, consumer safety, and market integrity. However, public policy interventions in Internet medicine and pharmacies can be costly and burdensome.ConclusionThe study suggests a utilitarian valuation of Mill's injury principle because it is concerned not only with individual freedom from restraint, but with autonomy to which freedom from government interference is a means rather than an end in itself. The efficiency and multi-polar accountability of policy interventions, rather than their necessity, are major challenges in the context of Mill's principle. Distinguishing between legitimate and counterfeit medications sold online carries heavy transaction costs, while any actual and potential harms resulting from the Internet trade, and their containment, have significant third party effects.Key messagesEfficient solutions to problems and issues raised by pharmaceutical lemons inevitably entail some form of government intervention, even if market-oriented approaches are pursued. Governments should consider if better attribution of property rights, altering incentives of Internet sellers, and a tort-based system are more efficient than heavy reliance on criminal law. Nonetheless, the study asserts that regulating the public regulators is just as critical as outsourcing regulation, supply chain tracking and data-banking, marketing disincentives, multi-pronged educational initiatives, and intersectoral and intergovernmental collaborations.