Is Pharmaceutical Detailing Informative? Evidence from Contraindicated Drug Prescriptions

Abstract

Crestor, an important but controversial cholesterol-lowering drug, is contraindicated for use by senior and Asian patients. In this paper, we exploit this fact and a unique doctor-level prescription and advertising (detailing, to be exact) exposure data for statin drugs to examine the hypothesis of informative advertising. Our tests are based on a simple empirical learning model in which a doctor learns about the match quality of Crestor for different types of patients through advertising signals. We find strong evidence for the informative-advertising hypothesis: The match quality signaled by doctor-level advertising for contraindicated patients is significantly inferior to that signaled for the other patients. Our results are robust to doctor-level advertising being correlated with doctor-specific unobserved factors and/or differential trend in individual doctors' attitude towards Crestor.

Keywords: Pharmaceutical detailing, Informative advertising, Sales force, Contraindications, Bayesian learning models

JEL Classification: M31, M37