“Let the Sunshine In”: The Impact of Industry Payment Disclosure on Physician Prescription Behavior

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2020-01-01

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Abstract

U.S. pharmaceutical companies frequently pay doctors to promote their drugs. This has raised concerns about conflict of interest, which policy makers have attempted to address by introducing payment disclosure laws. However, it is unclear if such disclosure has an effect on physician prescription behavior. We use individual-level claims data from a major provider of health insurance in the United States and employ a difference-indifferences research design to study the effect of the payment disclosure law introduced in Massachusetts in June 2009. The research design exploits the fact that, although physicians operating in Massachusetts were impacted by the legislation, their counterparts in the neighboring states of Connecticut, New York, New Hampshire, and Rhode Island were not. In order to keep the groups of physicians comparable, we restrict our analysis to physicians in the counties that are on the border of these states. We find that the Massachusetts disclosure law resulted in a decline in prescriptions in all three drug classes studied: statins, antidepressants, and antipsychotics. Our findings are robust to alternative control groups, time periods and estimation methods. We also show that the effect is highly heterogeneous across physician groups. Finally, we explore potential mechanisms driving these results.

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10.1287/mksc.2019.1181

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Guo, T, S Sriram and P Manchanda (2020). “Let the Sunshine In”: The Impact of Industry Payment Disclosure on Physician Prescription Behavior. Marketing Science, 39(3). pp. 516–539. 10.1287/mksc.2019.1181 Retrieved from https://hdl.handle.net/10161/23379.

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Guo

Tong Guo

Associate Professor of Business Administration

Tong Guo is an Associate Professor of Marketing at Duke University’s Fuqua School of Business and at the Department of Economics (by courtesy). Tong Guo studies the causal role of information in marketing and its policy implications, especially in the domain of healthcare, new technology and consumer protection. To do so, she uses a collection of methodologies from econometrics, machine learning, quasi-experiments, and online experiments. Her research explores the heterogeneous effects in healthcare marketing under the mandated information disclosure, consumer responses to misinformation in ads, moral hazard in airline loyalty programs, biotech adoptions, marijuana legalization and opioid prescriptions. She serves on the Editorial Board of Marketing Science.

Tong Guo is a faculty fellow at 2022 AMA Sheth Foundation Doctoral Consortium, 2022 ISMS Early Career Scholars Camp Fellow, the finalist of the 2018 UM ProQuest Distinguished Dissertation Awards, the 2017 AMA Sheth Foundation Doctoral Consortium Fellow, and the 2016 INFORMS Marketing Science Doctoral Consortium Fellow. 

Tong received her BS and BA at Peking University, her MA in Economics at Duke University, and her PhD in Marketing at the University of Michigan, Ann Arbor. At Fuqua, Tong teaches Strategic Brand Management in the Daytime MBA and Executive MBA programs. She also taught Marketing Core in the MMS programs and was recognized as the DKU Runner-Up for Excellence in Teaching in 2021-22.


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