How Does Misinformation Spill-Over Spatially? New Evidence from COVID-19 Drug Treatment Endorsements

How does misinformation spill over spatially? We examine this question using novel sales data from 2018-2020 in the Indian market for anti-malarial drugs impacted by the spatial spillover of misinformation around HCQ usage in COVID-19 endorsed by the former POTUS Donald Trump. Using a difference-in-difference approach, where Hydroxychloroquine (HCQ) and Chloroquine (CQ) are our treated product markets (other anti-malarial drugs being controls), we find that the HCQ endorsement by Donald Trump resulted in a revenue growth rate increase of 1.1% and 0.67% for HCQ and CQ in India. Analogous figures for sales were 0.96% and 0.67%. Results were robust controlling for molecule, region, time, molecule-region, and region-time specific unobserved heterogeneity. The effects are most prominent in top Indian regions with urban populations, better internet penetration, and population density. Our findings have important implications for spatial spillover of misinformation, global health policy and pharmaceutical markets.