Promotion of Prescription Drugs and Its Impact on Physician's Choice Behavior

Abstract

The authors investigate whether and how pricing and promotional activities influence prescription choice behavior using a comprehensive panel of physicians and data on competitive price and promotional activities. The authors find that physicians are characterized by fairly limited price sensitivity, detailing and samples have a mostly infor-mative effect on physicians, and physicians with a relatively large number of Medicare or health maintenance orga-nization patients are less influenced by promotion than other physicians are.