Offering Pharmaceutical Samples: The Role of Physician Learning and Patient Payment Ability

Ram Bala (), Pradeep Bhardwaj () and Yuxin Chen ()
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Ram Bala: Leavey School of Business, Santa Clara University, Santa Clara, California 95053
Pradeep Bhardwaj: College of Business Administration, University of Central Florida, Orlando, Florida 32816
Yuxin Chen: Kellogg School of Management, Northwestern University, Evanston, Illinois 60208

Marketing Science, 2013, vol. 32, issue 3, 522-527

Abstract: Physicians may learn about prescription drug effectiveness directly from the firm via detailing or from patient experience. Patient-mediated learning is aided by the use of free drug samples. The effective use of samples is hampered by a lack of understanding of its exact return on investment implications. We seek to fill this gap by incorporating the physician's sample allocation behavior in the firm's decision making. We uncover the following implications for firms as well as policy makers. First, we find that the optimal sampling level for a drug category is a nonmonotonic function of patient payment ability and the price of the drug. Second, an increase in the cost of samples can lead to an increase in sampling and a decrease in detailing when the physician's propensity to provide sample subsidies is high. Third, when future market growth is expected to be high (early stage product life cycle and/or chronic drugs) and sampling efficiency is low, the use of sampling is profitable for the firm but leads to lower market coverage than when sampling is disallowed.

Keywords: pharmaceutical marketing; sampling; detailing; patient payment ability (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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