Date
May 28, 2023 6:14 PM
fraud is an equilibrium quantity
The more protections you put in place to prevent counterfeit people from falling victim to counterfeit drug scams, the more expensive it becomes to obtain drugs through the approved channels. If it becomes too expensive, people will choose to eschew it entirely, and opt for cheaper markets where they will find lower prices (and fewer fraud protections). The implied conclusion here seems to be that the optimal level of counterfeit drugs entering the system is not zero: at a certain point, the marginal cost of counterfeit prevention is so high that the resulting higher prices are enough to drive customers out of the official channels, and into the waiting arms of unlicensed internet pharmacies with fewer protections.