We develop a structural model of detailing and prescribing decisions under an environment where detailing helps physicians obtain the current information sets about drug qualities. Our model assumes that a representative opinion leader is responsible for updating the prior belief about the quality of drugs via patients' experiences, and manufacturers use detailing as a means to build/maintain the measure of physicians who are informed of the current information sets. We estimate our model using data on sales, prices, and detailing minutes at the product level for ACE-inhibitor with diuretic in Canada. We quantify the marginal impact of detailing on current demand at different points in time, and demonstrate how it depends on the measure of well-informed physicians and the information sets. Furthermore, we conduct a policy experiment to examine how a public awareness campaign, which encourages physicians/patients to report their drug experiences, would affect managerial incentives to detail.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
4935.
Find related papers by JEL classification: I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Statistical Simulation Methods M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information M37 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Advertising C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
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