Quality Safeguards and Regulation of Online Pharmacies

Econometric analysis of 113 online pharmacies finds that quality of service is higher for online pharmacies with insurance coverage and those that also run conventional pharmacies and have been open for a longer time. The significant impact of insurance coverage suggests that provision of high-quality service in this industry is not only possible but can be regulated. Furthermore, market forces in the form of reputational investments are also active in enhancing and safeguarding quality. Overall, this evidence supports licensing online pharmacies; especially considering that prohibiting them is ineffective against fraudulent sites