Drugmakers that pay for doctors’ meals get an outsize return on their investment, or a 73% increase in prescribing of their drug.
That was the conclusion of a new paper, which looked at cardiologists who were taken out to a meal by sales representatives of Pfizer PFE, +0.51% or AstraZeneca AZ, -0.16% The companies make two expensive branded cholesterol-lowering statins, Lipitor and Crestor.
Importantly, during the time period examined — between 2011 and 2012 — there were several equivalent, lower-cost generic statins on the market.
The paper’s findings support a growing consensus that pharmaceutical companies’ sales tactics do affect what drugs doctors use to treat patients. As U.S. health costs grow to unsustainable levels, and the role of drug companies has attracted particular scrutiny, the issue has taken on increasing importance.
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Even so, the 73% increase in prescribing is a high number, and likely due to sales representatives cannily honing in on physicians who normally wouldn’t prescribe much of their drugs, according to the study.
The researchers’ findings also suggested there would be value to banning these types of physician payments.
Doctor payments can be positive for patients by increasing statin prescribing, but “this comes at the cost of higher prices,” outweighing other gains, the study said. The cost to consumer welfare of this behavior totaled $190 million, by its estimate.
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A new working paper circulated by the National Bureau of Economic Research found that when pharmaceutical companies pay for doctors’ meals, they prescribe more of the companies’ drugs. That in turn increases costs for the U.S. health system, the paper found.
Pharmaceutical companies market their products to doctors in all kinds of ways, including advertising and payments for things like meals — where they are pitched information about the product — travels, speaking, consulting and research.
Part of the reason the working paper focused on meal payments was that they were popular, making up the majority of non-research payments during the time period, 2011-2012. Meals are, by their very nature, designed to be “pure persuasion,” as opposed to payments for consulting or speaking, the study said. They are also controversial, and have been banned in several states and health systems.
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Most of the meals examined were valued at less than $150. But interestingly, the meal’s mere existence seemed to matter more than whether the doctors ordered filet mignon or hamburgers.
“It appears that the effect is driven by the receipt of any meal, regardless of its value,” the report said, suggesting that policies limiting the value of a meal wouldn’t be very effective. Similarly, the number of meals a doctor had paid for also seemed to matter less than the fact that they took place.
The study focused on the drugs and time period to avoid other complicating factors, including the possibility that other drugs had been discussed during the meal. Because Lipitor and Crestor made up the majority of both companies’ cardiologist-driven sales, if either company’s representatives “were taking a cardiologist out to lunch in this time period, it is very likely that statins were the focus of any drug-related discussions,” the study said.
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Both drugs had also both been out for a while — 15 years and eight years, respectively — making it less likely that the sales representatives conveyed new information to doctors that affected prescribing.
Other studies have also found positive correlations between doctor payments and prescribing of those companies’ products, the study noted. One similar study found that doctor payments are connected to a roughly 6% increase in spending on the products being promoted; the NBER paper attributes the discrepancy between the two findings to different research strategies.
The NBER study does have an important caveat, that it doesn’t speak for the entire health care market, and not even the entire drug market, the authors said, calling for additional research.
The study was distributed by the National Bureau of Economic Research on Monday and has not been peer-reviewed.