American Economic Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
Drug Diffusion through Peer Networks: The Influence of Industry Payments
American Economic Journal: Economic Policy
(pp. 1–33)
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 from 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.Citation
Agha, Leila, and Dan Zeltzer. 2022. "Drug Diffusion through Peer Networks: The Influence of Industry Payments." American Economic Journal: Economic Policy 14 (2): 1–33. DOI: 10.1257/pol.20200044Additional Materials
JEL Classification
- I11 Analysis of Health Care Markets
- L65 Chemicals; Plastics; Rubber; Drugs; Biotechnology
- M31 Marketing
- M37 Advertising
- O33 Technological Change: Choices and Consequences; Diffusion Processes