Death Toll of Price Limits and Protectionism in the Russian Pharmaceutical Market

Abstract

How harmful can government regulations and protectionism be? We provide evidence of a sizable negative impact of government interventions on population health. In 2012, the Russian government implemented a strategy to increase the affordability of pharmaceutical drugs and develop domestic generics for the majority of medications. It set price limits and implemented protectionist regulations that favor local producers of generics and biosimilars in several large groups of medicines. We show that the mortality rate for conditions affected by public programs reversed a previously declining trend and increased by 40% after the interventions compared to the overall mortality and an unaffected (control) group of diseases. For some affected diseases, the mortality more than doubled. Additionally, the growth is more notable among the elderly, in rural compared to urban areas, and areas with a shortage of medical facilities.