Informational Shocks, Off-Label Prescribing and the Effects of Physician Detailing

Promotional strategies that pharmaceutical firms employ to convince physicians to prescribe their products are the subject of considerable regulatory scrutiny. In particular, regulators worry firms may use sales reps to try to convince physicians to prescribe drugs for uses that the Food and Drug Administration has not approved. Since 2004, 31 federal cases alleging off-label promotional practices have settled, totaling over $12 billion. In this paper, I study the effects of detailing on physician prescribing in the antipsychotic category, which was the category the federal government most heavily targeted for off-label promotion. I identify the effects of detailing using within-physician variation, along with two studies that disseminated new scientific information. Detailing effects are modest but statistically significant. Although detailing lifts both on-label and off-label prescriptions, it disproportionately increases on-label, tilting the distribution of prescriptions toward on-label. I find the source of this disproportionality is that detailing to physicians who primarily prescribe off-label is ineffective. The small effects of detailing along with the disproportional effect on on-label prescribing suggests regulators may not find it worthwhile to pursue such cases. Additionally, the risk of large settlements and ineffectiveness of off-label promotion suggests firms would be better off avoiding such practices.