IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v50y2004i12p1704-1715.html
   My bibliography  Save this article

Are Physicians ÜEasy MarksÝ? Quantifying the Effects of Detailing and Sampling on New Prescriptions

Author

Listed:
  • Natalie Mizik

    (Graduate School of Business, Columbia University, 3022 Broadway, New York, New York 10027-6902)

  • Robert Jacobson

    (Department of Marketing, School of Business, University of Washington, Seattle, Washington 98195-3200)

Abstract

Much public attention and considerable controversy surround pharmaceutical marketing practices and their impact on physicians. However, views on the matter have largely been shaped by anecdotal evidence or results from analyses with insufficient controls. Making use of a dynamic fixed-effects distributed lag regression model, we empirically assess the role that two central components of pharmaceutical marketing practices (namely, detailing and sampling) have on physician prescribing behavior. Key differentiating features of our model include its ability to (i) capture persistence in the prescribing process and decompose it into own-growth and competitive-stealing effects, (ii) estimate an unrestricted decay structure of the promotional effects over time, and (iii) control for physician-specific effects that, if not taken into account, induce biased coefficient estimates of detailing and sampling effects. Based on pooled time series cross-sectional data involving three drugs, 24 monthly observations, and 74,075 individual physicians (more than 2 million observations in total), we find that detailing and free drug samples have positive and statistically significant effects on the number of new prescriptions issued by a physician. However, we find that the magnitudes of the effects are modest.

Suggested Citation

  • Natalie Mizik & Robert Jacobson, 2004. "Are Physicians ÜEasy MarksÝ? Quantifying the Effects of Detailing and Sampling on New Prescriptions," Management Science, INFORMS, vol. 50(12), pages 1704-1715, December.
    • Handle: RePEc:inm:ormnsc:v:50:y:2004:i:12:p:1704-1715
    DOI: 10.1287/mnsc.1040.0281
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.1040.0281
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.1040.0281?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
    ---><---

    References listed on IDEAS

    as
    1. Peay, Marilyn Y. & Peay, Edmund R., 1990. "Patterns of preference for information sources in the adoption of new drugs by specialists," Social Science & Medicine, Elsevier, vol. 31(4), pages 467-476, January.
    2. Dholakia, Ruby Roy & Sternthal, Brian, 1977. "Highly Credible," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 3(4), pages 223-232, March.
    3. Campbell, Margaret C & Kirmani, Amna, 2000. "Consumers' Use of Persuasion Knowledge: The Effects of Accessibility and Cognitive Capacity on Perceptions of an Influence Agent," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 27(1), pages 69-83, June.
    4. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    5. Friestad, Marian & Wright, Peter, 1994. "The Persuasion Knowledge Model: How People Cope with Persuasion Attempts," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 21(1), pages 1-31, June.
    6. Wickens, Michael R, 1972. "A Note on the Use of Proxy Variables," Econometrica, Econometric Society, vol. 40(4), pages 759-761, July.
    7. Pierre Azoulay, 2002. "Do Pharmaceutical Sales Respond to Scientific Evidence?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(4), pages 551-594, December.
    8. Rizzo, John A, 1999. "Advertising and Competition in the Ethical Pharmaceutical Industry: The Case of Antihypertensive Drugs," Journal of Law and Economics, University of Chicago Press, vol. 42(1), pages 89-116, April.
    9. Anderson, T. W. & Hsiao, Cheng, 1982. "Formulation and estimation of dynamic models using panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 47-82, January.
    10. Ernst R. Berndt & Robert S. Pindyck & Pierre Azoulay, 2003. "Consumption Externalities and Diffusion in Pharmaceutical Markets: Antiulcer Drugs," Journal of Industrial Economics, Wiley Blackwell, vol. 51(2), pages 243-270, June.
    11. Krinsky, Itzhak & Robb, A Leslie, 1986. "On Approximating the Statistical Properties of Elasticities," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 715-719, November.
    12. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jessica M. Mc Lay & Roy Lay-Yee & Barry J. Milne & Peter Davis, 2015. "Regression-Style Models for Parameter Estimation in Dynamic Microsimulation: An Empirical Performance Assessment," International Journal of Microsimulation, International Microsimulation Association, vol. 8(2), pages 83-127.
    2. Marcus Tamm & Harald Tauchmann & Stefan Greß & Jürgen Wasem, 2005. "Price Elasticities and Social Health Insurance Choice in Germany: A Dynamic Panel Data Approach," RWI Discussion Papers 0028, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
    3. Rahman, Mizanur, 2008. "The Impact of a Common Currency on East Asian Production Networks and China’s Exports Behavior," MPRA Paper 13931, University Library of Munich, Germany.
    4. Suppliet, Moritz, 2017. "Umbrella Branding in Pharmaceutical Markets," Other publications TiSEM 6ee607fc-8602-4270-a076-3, Tilburg University, School of Economics and Management.
    5. Andrés Rodríguez‐Pose & Vassilis Tselios, 2009. "Education And Income Inequality In The Regions Of The European Union," Journal of Regional Science, Wiley Blackwell, vol. 49(3), pages 411-437, August.
    6. Maria Giuseppina Bruna & Rey Dang & L'Hocine Houanti & Jean-Michel Sahut & Michel Simioni, 2022. "By what way women on corporate boards influence corporate social performance? Evidence from a semiparametric panel model," Post-Print hal-03693781, HAL.
    7. Cothren Richard & Edwards Jeffrey A, 2006. "Long-Run Money Growth and the Liquidity Effect," The B.E. Journal of Macroeconomics, De Gruyter, vol. 6(1), pages 1-15, April.
    8. Mayer, Alexander, 2022. "On the local power of some tests of strict exogeneity in linear fixed effects models," Econometrics and Statistics, Elsevier, vol. 24(C), pages 49-74.
    9. Alcántar-Toledo, Javier & Venieris, Yannis P., 2014. "Fiscal policy, growth, income distribution and sociopolitical instability," European Journal of Political Economy, Elsevier, vol. 34(C), pages 315-331.
    10. Suppliet, Moritz, 2020. "Umbrella branding in pharmaceutical markets," Journal of Health Economics, Elsevier, vol. 73(C).
    11. Kremer, Sara T.M. & Bijmolt, Tammo H.A. & Leeflang, Peter S.H. & Wieringa, Jaap E., 2008. "Generalizations on the effectiveness of pharmaceutical promotional expenditures," International Journal of Research in Marketing, Elsevier, vol. 25(4), pages 234-246.
    12. Aditi Bhattacharyya, 2012. "Adjustment of inputs and measurement of technical efficiency: A dynamic panel data analysis of the Egyptian manufacturing sectors," Empirical Economics, Springer, vol. 42(3), pages 863-880, June.
    13. Prabir De, 2010. "Governance, Institutions, and Regional Infrastructure in Asia," Governance Working Papers 22878, East Asian Bureau of Economic Research.
    14. Hsiao, Cheng & Hashem Pesaran, M. & Kamil Tahmiscioglu, A., 2002. "Maximum likelihood estimation of fixed effects dynamic panel data models covering short time periods," Journal of Econometrics, Elsevier, vol. 109(1), pages 107-150, July.
    15. He, Jie, 2006. "Pollution haven hypothesis and environmental impacts of foreign direct investment: The case of industrial emission of sulfur dioxide (SO2) in Chinese provinces," Ecological Economics, Elsevier, vol. 60(1), pages 228-245, November.
    16. Frondel, Manuel & Kussel, Gerhard & Sommer, Stephan, 2019. "Heterogeneity in the price response of residential electricity demand: A dynamic approach for Germany," Resource and Energy Economics, Elsevier, vol. 57(C), pages 119-134.
    17. Luise Breinlinger & Evgenia Glogova, 2002. "Determinants of Initial Public Offerings - A European Time-Series Cross-Section Analysis," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 87-106.
    18. Maria Elena Bontempi & Jan Ditzen, 2023. "GMM-lev estimation and individual heterogeneity: Monte Carlo evidence and empirical applications," Papers 2312.00399, arXiv.org, revised Dec 2023.
    19. Herrmann, Sabine & Jochem, Axel, 2003. "Die internationale Integration der Geldmärkte in den mittel- und osteuropäischen Beitrittsländern: Abweichungen von der gedeckten Zinsparität, Kapitalverkehrskontrollen und Ineffizienzen des Finanzsek," Discussion Paper Series 1: Economic Studies 2003,07, Deutsche Bundesbank.
    20. Dave, Dhaval, 2006. "The effects of cocaine and heroin price on drug-related emergency department visits," Journal of Health Economics, Elsevier, vol. 25(2), pages 311-333, March.

    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:inm:ormnsc:v:50:y:2004:i:12:p:1704-1715. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    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.