Examining the Causes and Consequences of Medicine Theft Using Remote Tracking Technologies

A substantial share of public medical supplies in developing countries go missing annually, contributing to citizen morbidity and mortality. While officials blame both mismanagement and theft for the losses, the opacity and fragmentation of their supply chains challenge efforts to determine the causes and levels of medicine diversion. We employ a novel research design using remote tracking devices placed in nearly 2,400 medicine boxes to assess these issues in Malawi, a country hampered by public sector corruption. Combining tracking data with survey data from 3,360 individuals and 453 health officials, we find important patterns to medicine diversion in Malawi. Following models of bureaucratic corruption, our evidence suggests individuals maximize benefits by stealing higher value medicines and in settings with less risk. We also find less diversion when deliveries occur under community-level monitoring. Finally, our results show medicine diversion predicts higher stockouts and citizen morbidity, particularly among poorer patients. Our study provides proof of concept for adapting new tracking technologies to explore more accurately the sources and consequences of medicine diversion, and offers insights about the design and management of medicine supply chains.