Biomedical Engineering Reference
In-Depth Information
The logic of consequences is also evident in other pharmaceutical marketing
practices. For instance, direct-to-consumer marketing is intended to enhance aware-
ness and provide information about product benefi ts to indirectly stimulate demand
by provoking consumers to consult their physicians for prescriptions. Although
pharmaceutical companies assert the importance of patient welfare and product
information, they openly acknowledge their motive to maximize return on share-
holder investments. It is well known that return on investments of pharmaceutical
companies (estimated at 15 %) have consistently exceeded normal market returns
(Fagan and Hayes
1998
).
However, absent systematic studies of pharmaceutical marketing strategy, it is
premature to unequivocally assert the logic of consequences as its underlying domi-
nant logic. Unfortunately, such studies pose nontrivial challenges because signifi -
cant aspects of strategy practice are “invisible” as they are either proprietary or hold
competitive advantage only if they remain obscure. As a result, most commercially
available data on pharmaceutical marketing practices (e.g., IMS, Verispan/Scott-
Levin) include instruments that illuminate only those aspects of the strategic prac-
tice that the organizations wish to make “visible.” Nevertheless, we believe that it is
critical to call for studies that shed light on the heretofore “invisible” practice of
pharmaceutical marketing strategy to understand its dominant logic and address the
strategy-tactic gap.
24.2.2
Physician-Patient Exchanges and Logic
of Appropriateness
The logic of appropriateness provides a theoretical foundation for conceptualizing
physician-patient exchanges that are governed by institutionalized norms of fi du-
ciary responsibility and rule driven cooperative behaviors even when such behav-
iors may undermine individual pay-offs (March
1996
). Patients rely on the
professional expertise of physicians to obtain prescription regimens that help cure
diseases and enhance well-being. From an economics perspective, such professional-
mediated exchanges are problematic because of “hidden information”—not know-
ing how to distinguish credible professionals, and “hidden action”—not knowing
whether the professional, once engaged, will shirk from acting to safeguard patient
interest, among other agency problems (Arrow
1985
).
Sociological studies of the medical profession in particular, and professionals in
general (e.g., lawyers, auditors), show that institutionalizing the logics of appropri-
ateness is a mechanism for solving the agency problems (Parsons
1968
; Starr
1982
;
Freidson
2001
). Shapiro (
1987
,
2005
) formalizes these arguments by positing that
professionals may be viewed as “agents” who are bound by fi duciary responsibility
to serve the interests of “principals” (e.g., patients) such that there is an expectation
that the agent will put the principal's interests above self-interest (Boatright
1992
).
Actors resolve choice dilemmas by following a set of prescribed rules paying less
attention to the personal gains from their decisions (March and Olsen
1998
).
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