IDEAS home Printed from https://ideas.repec.org/a/eee/jhecon/v95y2024ics0167629624000328.html
   My bibliography  Save this article

The cost of influence: How gifts to physicians shape prescriptions and drug costs

Author

Listed:
  • Newham, Melissa
  • Valente, Marica

Abstract

This paper investigates the influence of gifts – monetary and in-kind payments – from drug firms to US physicians on prescription behavior and drug costs. Using causal models and machine learning, we estimate physicians’ heterogeneous responses to payments on antidiabetic prescriptions. We find that payments lead to increased prescription of brand drugs, resulting in a cost rise of $23 per dollar value of transfer received. Paid physicians show higher responses when they treat higher proportions of patients receiving a government-funded low-income subsidy that lowers out-of-pocket drug costs. We estimate that introducing a national gift ban would reduce diabetes drug costs by 2%.

Suggested Citation

  • Newham, Melissa & Valente, Marica, 2024. "The cost of influence: How gifts to physicians shape prescriptions and drug costs," Journal of Health Economics, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:jhecon:v:95:y:2024:i:c:s0167629624000328
    DOI: 10.1016/j.jhealeco.2024.102887
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167629624000328
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jhealeco.2024.102887?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Public health; Payments to physicians; Gift ban; Heterogeneous treatment effects; Causal machine learning;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jhecon:v:95:y:2024:i:c:s0167629624000328. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505560 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.