Consumers increasingly use online pharmacies. However, illicit online pharmacies endanger consumer welfare with unapproved and counterfeit drugs. By linking Food and Drug Administration (FDA) warning letter content with observations of the 1108 websites cited in those letters, we identify factors associated with FDA-requested compliance and active/inactive website status. One in five online pharmacies failed to comply with FDA recommendations. Findings support the cost/benefit, social norm, and instrumental theories of compliance. Compliance declines with cost (e.g., when the FDA requests changes to more drug categories). Organized crime's social norms encourage law breaking; thus, illicit pharmacies comply less than other online pharmacies. Instrumental theory suggests perceived severity and certainty of penalties influences compliance. In support, when political will and attention focused on the opioid crisis, the FDA cited primarily opioid-related violations and these opioid-related letters increased compliance and website closures. Finally, we recommend improved consumer protection efforts to address internet pharmaceutical distribution challenges.
- Food and Drug Administration policy
- compliance theory
- consumer protection regulation
- illicit online pharmacies
- warning letters