Pharmaceutical Economics and Policy
Saturday, Jan. 6, 2018 12:30 PM - 2:15 PM
- Chair: Sean Nicholson, Cornell University
The Welfare Effects of Physician-industry Interactions: Evidence From Patent Expiration
AbstractMany transactions occur via expert advisors, especially in the healthcare sector, and as such, firms frequently implement strategies to influence these advisors. The efficiency of these interactions is an empirical question. Using data on physician-industry interactions and prescribing behavior during the entry of a major generic statin drug, we examine the causal effect and welfare implications of the most common type of interaction: meals. Guided by a theoretical model of endogenous meals, we develop an instrumental variables identification strategy and document reduced form evidence that these meals directly influence prescribing decisions. We find a significant degree of negative selection and primarily extensive margin effects, whereby firms target small meals to prescribers with an otherwise low propensity to use the target drug. Given this evidence, we estimate a structural model of drug choice that allows us to predict counterfactual outcomes in a world where these meals are banned. Results from these counterfactuals are in line with theoretical predictions that these interactions can offset efficiency losses due to pricing with market power. However, this offset does not appear large enough to justify their existence in this particular market.
The Impact of Prescription Drug Monitoring Programs on Teen Use of ADHD Medication
AbstractStimulants are commonly prescribed to treat individuals diagnosed with ADHD. These medications are designated as Schedule II Controlled Substances by the DEA, the same classification as opioids (“drugs with a high potential for abuse”). There is a widespread concern, reflected in the media, that ADHD is over diagnosed and that ADHD drugs are overprescribed. Data support the allegation that ADHD medication misuse and diversion is common among youths. We use 2000-2013 all-state Medicaid claims data to investigate the impact of prescription drug monitoring programs that were created in response to the abuse concerns. We use difference-in-difference design to estimate the impact of a PDMP becoming operational on the number of prescriptions for ADHD written for patients covered by Medicaid. Our primary empirical strategy identifies the sum of the two potential effects stemming from the PDMPs: informational and deterrent effects. We next, employ two empirical tests to disentangle them.
University of Southern California
- I1 - Health