The effects of detailing on prescribing decisions under quality uncertainty

Abstract

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.

Consumer learning and heterogeneity: Dynamics of demand for prescription drugs after patent expiration

“…Here I do not find evidence that prices are correlated with the unobservables in the model. In another application, Ching and Ishihara [14] use this method to estimate the effect of detailing, and find evidence that the method corrects the bias due to the endogeneity problem of detailing. While in principle the procedure is able to identify the parameters of the utility function and the pseudo-pricing policy function, it may require more data relative to the standard procedure, in order to achieve satisfactory results.…”

Umbrella Branding in Pharmaceutical Markets

“…While free samples are a pure economic incentive, detailing and conferences might provide physicians with information (Ching and Ishihara, 2010). Earlier work shows that detailing may have business stealing eects, while consumer-directed advertising result in market-expansion (Ling et al, 2002;Iizuka, 2004;Iizuka and Jin, 2007;Ching et al, 2015).…”

“…Earlier work shows that detailing may have business stealing eects, while consumer-directed advertising result in market-expansion (Ling et al, 2002;Iizuka, 2004;Iizuka and Jin, 2007;Ching et al, 2015).…”

“…My work does not investigate Rx-to-OTC switches and proposes the utilization of institutional characteristics outside the US to isolate the eect of reputation from other marketing 4 eorts. Various articles on pharmaceutical markets nd mostly positive eects of advertising on drug demand and market shares (Lakdawalla et al, 2013;Avery et al, 2012;Ching et al, 2015;Iizuka, 2004;Ling et al, 2002). Several authors investigate advertising spillovers in pharmaceutical markets, e.g., Shapiro (forthcoming) estimates the positive eects from rm-specic advertising on the market level.…”

Information and diffusion of new prescription drugs

“…Berndt et al (2003) examined the positive impact of consumption externalities on the adoption of new anti-ulcer drugs using market level data, while Nair et al (2010) have considered the impact that peer-effects have on the slow adoption of new drugs. Ching and Ishihara (2010) consider the role of clinical evidence in a structural learning model based on individual manufacturer and physician behaviour. These analyses of pharmaceutical drug diffusion generally adopt an aggregate perspective based on the total volume of pharmaceutical sales, although the learning process models based on self-experience do analyse individual physician behaviour.…”