In a recent article from the Journal of Public Economics, Dr. Jing Li – associate professor of health economics and Associate Director of The CHOICE Institute – examines the impact of direct-to-physician marketing payments from cancer drug companies on Medicare prescribing expenditures and patient mortality. Alongside co authors from Cornell University, Dr. Li’s latest publication uncovers a compelling trend:
Once physicians and cancer drug companies engage in a financial relationship – in other words, when physicians accept marketing payments from pharmaceutical firms – spending accelerates and prescribing increases without improving patient mortality.
Cancer-treating physicians frequently interact with pharmaceutical firms because they play a key role in deciding which drugs to prescribe – the ultimate influencers for which companies stand to profit.
Of the physicians considered for Dr. Li’s study, 67% of them received at least one marketing payment related to cancer treatment between 2014 and 2018. Major drugs like Opdivo and Keytruda reach more than half of prescribers with financial incentives like these. Upon receiving payment from a drug company, physician prescribing of the associated drug increased 4% in the year to follow, accelerating Part B cancer drug expenditure.
Following a marketing encounter with a drug company, Dr. Li’s findings suggest that physicians begin treating cancer patients with lower predicted mortality – that is, expanding the incentivized drug treatment to healthier patients with little meaningful improvement.