When Fraud Kills: Falsified Medical Products and Neonatal Health

Abstract
We investigate the health consequences of a medical fraud in which a pharmaceutical company diluted the biocides used in antiseptics and disinfectants that were widely utilized in public hospitals. The use of falsified medical products in over 80% of the public hospitals for over more than 10 years likely resulted in a surge of antimicrobial resistance and drug-resistant-hospital-acquired infections. Using public procurement archives and national inpatient registers we show that falsified medical products resulted in longer hospitalization stays for infants and an increased probability of neonatal death. The effects are driven by the vulnerable neonates (preterm and low birth weight). To the extent that vulnerable infants are more likely to belong to disadvantaged mothers – single, low educated, unemployed - our results show that (medical) fraud can widen the health disparities already in the first month of life.