The Cost of Influence: How Gifts to Physicians Shape Prescriptions and Drug Costs

Melissa Newham and Marica Valente

Papers from arXiv.org

Abstract: This paper studies how gifts - monetary or in-kind payments - from drug firms to physicians in the US affect prescriptions and drug costs. We estimate heterogeneous treatment effects by combining physician-level data on antidiabetic prescriptions and payments with causal inference and machine learning methods. We find that payments cause physicians to prescribe more brand drugs, resulting in a cost increase of $30 per dollar received. Responses differ widely across physicians, and are primarily explained by variation in patients' out-of-pocket costs. A gift ban is estimated to decrease drug costs by 3-4%. Taken together, these novel findings reveal how payments shape prescription choices and drive up costs.

Date: 2022-03, Revised 2023-04
New Economics Papers: this item is included in nep-big, nep-hea and nep-ias
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: The cost of influence: How gifts to physicians shape prescriptions and drug costs (2024)
Working Paper: The Cost of Influence:How Gifts to Physicians Shape Prescriptions and Drug Costs (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2203.01778

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