Biomedical Engineering Reference
In-Depth Information
that uses the post-marketing data. We discuss the data and method used in various
studies. We then proceed to discuss the implications of these results for pharmaceu-
tical marketing managers and for social planners and regulators.
6.3.1
Some Limitations of Using Clinical Trials Data
Although recent advancement in the literature has made it possible to investigate
participants' subjective evaluation of treatment effectiveness and side effects, there
remain some issues that have not been fully addressed using clinical trials data
alone, calling for the use of post-marketing prescription choice data. First, in the
real market environment, physicians and patients are faced with alternative drugs
they can choose from. This choice set is different from the choices participants in
clinical trials can make; therefore, analysis results based on clinical trials data may
not be easily projected to how physicians and patients will choose in the real mar-
ket. Also, when making prescription decisions physicians are exposed to marketing
efforts such as detailing, sampling, and direct-to-consumer (DTC) advertising from
pharmaceutical companies. Pharmaceutical companies are interested in understand-
ing the impact of these activities on prescription choices, which cannot be studied
using clinical trial data.
Second, it has been documented in the literature that, when new drugs are intro-
duced, physicians and patients usually have large uncertainty in evaluating the
potential treatment effectiveness and side effects. If patients are risk averse, physi-
cians are less likely to prescribe them drugs of which the outcomes are uncertain.
Many questions are likely to be asked by physicians when a new drug is introduced:
Is the drug more effective or with fewer side effects compared with other existing
drugs? Does the drug work better for patients with severe or mild conditions? Public
domain information such as clinical trial reports may not be suffi cient to address all
these concerns. Physicians also rely on a variety of other information sources
including marketing communication, such as detailing, learning from the feedback
from their patients (Narayanan and Manchanda
2009
), and/or recommendations
from other physicians either formally or informally (Manchanda et al.
2008
), to
learn about these attributes. Understanding how various types of information
sources help to reduce physician and patient uncertainty of important drug attributes
is crucial from the policy perspective. Pharmaceutical fi rms typically spend a sub-
stantial fraction of their marketing budget on detailing, the role of which is a fre-
quently debated topic in public policy. Many people argue that detailing distorts
physicians' prescription decision because it is mainly persuasive in nature and call
for regulating or even eliminating such activities. But if detailing can help physi-
cians learn about drug attributes, restricting detailing would slow down the adoption
of new innovative drugs and therefore benefi t the incumbent drugs by raising the
entry costs. If the new drugs are better than incumbents in either effectiveness or
side effects, restricting detailing could negatively affect patients' welfare because
patients would be less likely to be prescribed the new drugs. In addition, uncertainty
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