Pharmaceutical innovation, physician learning, and the cost of health care provision
This session combines three papers that look at how physician prescribing practices under incomplete information are impacted by drug entry and new information. The first paper examines how physicians responded to two shocks that took place in the mid-2000s: new information on antipsychotic treatment and expansion of Medicare Part D. Their findings suggest that the speed of new information adoption crucially depends on a physician’s recent experience with her patients. Thus, variation in patient demographics and insurance status by region translate into distinct physician practice styles and patterns of utilization. The second paper examines the dynamics of the opioid epidemic and asks how the entry of new, abuse-deterrent products mitigated physician learning about the dangers of opioids. The author looks at the mortality and cost implications of counterfactual scenarios in which the provision of information to physicians is improved and the choice set of available opioids is altered. Finally, the third paper studies the introduction of new attention-deficit/hyperactivity (ADHD) drugs. It uses the differential response of physicians to the new medications to examine whether pharmaceutical innovation (1) helped fuel the increases in the ADHD caseload and (2) led to improved outcomes among children and teens diagnosed with the condition.