The Local Influence of Principal Investigators on Technology Adoption

Adoption of new health care technologies is widely considered to be a key driver of both rising health costs and improved outcomes in the United States. This paper explores the diffusion of new cancer drugs by testing the influence of physician investigators who lead clinical trials. In particular, we exploit variation across drugs in the location of clinical trials to test whether geographic proximity to a principal investigator influences the speed of technology adoption. Using original data on clinical trial study authors and sites for 21 new cancer drugs along with Medicare claims data from 1998-2008, we estimate that patients are 30% more likely to receive treatment with a new drug if they seek care in the hospital referral region where the drug’s principal investigator (PI) practices. This effect, which is estimated in the first two years following initial FDA approval, fades over time until there is no apparent difference in utilization after four years. The increased local utilization is not driven solely by physicians practicing at the PI’s hospital, but is concentrated within PI’s metropolitan area. The evidence suggests that early information about a new drug can lead to large regional differences in initial adoption rates, but does not drive persistent specialization in treatment with the new technology.