China-Drugs

CHINESE ‘TWITTER’ HELPS IMPROVE PHARMACEUTICAL QUALITY

China’s most popular microblog Sina Weibo – akin to a hybrid of Facebook and Twitter – helps to ensure the quality of pharmaceutical drugs in the country by pointing out failures by companies and regulators and keeping them both accountable.

That is the central finding of research by Bei Qin, Tomas Larsson and David Strömberg, presented at the Royal Economic Society’s 2013 annual conference. The result goes against the popular belief that the benefits of a free internet do not stretch beyond the ‘Great Firewall of China’.

The study combines data from the Chinese State Food and Drug Administration (SFDA) with data for Sina Weibo use in around 90% of the regions in China from 2008 to 2011. Using the amount of bad drugs found in the audit as a proxy for drug quality, the study finds that:

  • Sina Weibo helps reduce ‘bad’ drugs (counterfeits or substandard drugs) by putting pressure on the regulators to work harder to find bad drugs and by exposing the producers of bad drugs.
  • When Sina Weibo use doubles, the amount of bad drugs found by regulators falls by 21% and the amount of bad drugs produced falls by 42%.
  • In regions where the Sina Weibo use is higher, the regulator tends to check more drugs in those regions. Six months after people in the region begin to use Sina Weibo, regulators check 6.4% more drugs than before.

These findings challenge the widely held view that China does not benefit from a free internet. The authors comment:

‘With more than 300 million users, Sina Weibo can gather public attention in a very short time.

‘As long as public opinion has the possibility of influencing or threatening the regime, even in an autocracy, the government cannot ignore it and will learn to be accountable to it.

‘A major concern in autocracies is the censorship on media. But Sina Weibo may counter this restriction by spreading news extremely quickly and widely.

‘As the freest media in China, Sina Weibo may have affected products or services that are often regulated by the government; for example, drugs.’

More…

The most popular Chinese microblog − Sina Weibo − can promote the drug quality in China, a developing country with serious market failure and government failure. This is the main finding of new research by Bei Qin, Tomas Larsson and David Strömberg, presented at the 2013 annual conference of the Royal Economic Society.

Sina Weibo, akin to a hybrid of Twitter and Facebook, has shown an influential impact on both private and public sectors since its establishment in September 2009. The study, combining the quarterly drug quality announcement by the Chinese State Food and Drug Administration (SFDA) with the data for Sina Weibo use for 290 prefectures in China from 2008 to 2011, finds that:

If the Sina Weibo use is doubled, the amount of bad drugs (counterfeit or substandard drugs) found will be reduced by 21%.

Sina Weibo helps reduce bad drugs by pushing the administrator to work harder and deterring the production of bad drugs.

In regions where the Sina Weibo use is higher, SFDA tends to check more drugs in those regions: the initial increase, showing up two quarters after Sina Weibo entered, is 6.4% more than the level before Sina Weibo entered.

If the Sina Weibo use is doubled in regions where drug producers are located, there tends to be 42% less bad drugs produced.

Information and public opinion are key to the functioning of Sina Weibo. The increase in information that is due to the diffusion via Sina Weibo helps the consumer and thus disciplines the product provider. With more than 300 million users, Sina Weibo can gather public attention in a very short time. As long as public opinion has the possibility of influencing or threatening the regime, even in an autocracy, the government cannot ignore it and will learn to be accountable to it.

A major concern in autocracies is the censorship on media. But Sina Weibo may counter this restriction by spreading news extremely quickly and widely. As the freest media in China, Sina Weibo may have affected products or services that are often regulated by the government, for example, drugs.

The study formally analyses the influence by looking at the results of the drug audit that is conducted quarterly by SFDA in 85-90% of the prefectures in China. The authors use the amount of bad drugs found in the audit as a proxy for drug quality. They explore the variation in the proxy before and after Sina Weibo’s entry and the variation across prefectures, as well as the variation in Sina Weibo use across time and prefectures, and then obtain the quantitative estimate of the impact of Sina Weibo.

Due to the two opposite directional effects, the study further suggests that the effect estimated by this proxy (the 21% reduction) is more likely to be the lower bound of the true effect of Sina Weibo on drug quality. A higher Sina Weibo use deters bad drugs provision and fewer bad drugs will appear; but at the same time a higher Sina Weibo use reveals more bad drugs given the true number of bad drugs provided on the market.

Although the two effects have different signs on the amount of bad drugs found, both of them suggest the improvement in drug quality.

The extensive use of microblogging may be specific to China, but this is just one of the ways of spreading information and calling on public attention through the internet. The fact that Sina Weibo works in the Chinese context is compelling evidence of the effects of a combination of information and public attention.

ENDS


Notes for editors:

‘Chinese Microblogs and Drug Quality’ by Bei Qin, Tomas Larsson and David Stromberg

Contact:
Bei Qin: +46 735368988 (bei.qin@iies.su.se)
http://people.su.se/~beqi5489/

RES media consultant Romesh Vaitilingam:
+44 (0) 7768 661095
romesh@vaitilingam.com
@econromesh

Page Options