Effect of vaccine recommendations on consumer and firm behavior

Abstract

We provide novel evidence on how firms and patients respond to vaccine recommendations. In 2014, the Advisory Committee on Immunization Practices recommended that elderly adults receive the pneumococcal vaccine Prevnar 13. Using a difference-in-differences strategy, we first show that, following the recommendation, the manufacturer (Pfizer) increased direct-to-consumer advertising. We then document increased Prevnar 13–related information-seeking behavior, and we show that targeted adults were more likely to have received a pneumococcal vaccine and were more connected to the health care system. Overall, the recommendation increased both Medicare Part B drug expenditures and Pfizer sales by approximately $1 billion annually, with little to no observable health benefits.