Working Paper: NBER ID: w26338
Authors: Leila Agha; Dan Zeltzer
Abstract: Pharmaceutical companies market to physicians through individual detailing accompanied by monetary or in-kind transfers. Large compensation payments to a small number of physicians account for most of this promotional spending. Studying US promotional payments and prescriptions for anticoagulant drugs, we investigate how peer influence broadens the payments’ reach. Following a compensation payment, prescriptions for the marketed drug increase by both the paid physician and the paid physician’s peers. Payments increase prescriptions to both recommended and contraindicated patients. Over three years, marketed anticoagulant prescriptions rose 23 percent due to payments, with peer spillovers contributing a quarter of the increase.
Keywords: pharmaceutical payments; peer influence; prescribing behavior; anticoagulants
JEL Codes: I11; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Pharmaceutical payments (H51) | Increase in prescriptions for marketed drug by paid physician (I11) |
| Pharmaceutical payments (H51) | Increase in prescriptions for marketed drug by peers of paid physician (C92) |
| Peer payment exposure (G19) | Increase in prescriptions for marketed drug by peers (C92) |
| Peer spillover effects (F69) | Total increase in prescriptions attributed to payments (H51) |
| Pharmaceutical payments (H51) | Increase in U.S. market for new oral anticoagulants (N22) |