Is Pharmaceutical Detailing Informative? Evidence from Contraindicated Drug Prescriptions

32 Pages Posted: 30 Jan 2012 Last revised: 16 Dec 2018

See all articles by Guofang Huang

Guofang Huang

Purdue University

Matthew Shum

California Institute of Technology

Wei Tan

SUNY at Stony Brook University, College of Arts and Science, Department of Economics

Date Written: February 25, 2018

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

Suggested Citation

Huang, Guofang and Shum, Matthew and Tan, Wei, Is Pharmaceutical Detailing Informative? Evidence from Contraindicated Drug Prescriptions (February 25, 2018). Available at SSRN: https://ssrn.com/abstract=1992182 or http://dx.doi.org/10.2139/ssrn.1992182

Guofang Huang (Contact Author)

Purdue University ( email )

West Lafayette, IN 47906
United States

Matthew Shum

California Institute of Technology ( email )

Pasadena, CA 91125
United States

Wei Tan

SUNY at Stony Brook University, College of Arts and Science, Department of Economics ( email )

Stony Brook, NY 11794
United States

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