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Data Dive Finds Doctors For Rent

Filed by KOSU News in Business.
August 5, 2013

Silly me. I thought “rent-seeking” was something only landlords did.

But economists have their own way of looking at the world. To them, rent-seeking is a term for describing how someone snags a bigger share of a pie rather than making a pie bigger, as the venerable Economist explains it.

So, a drugmaker can be seen as a rent-seeker if it cajoles doctors to prescribe more of a particular brand of medicine at the expense of a rival pharmaceutical company’s wares.

Now, how do they do it? A company provides some form of compensation (free meals, paid speaking gigs or a consulting deal) to doctors, and, lo and behold, its share of prescriptions goes up. Now, this connection isn’t exactly earth-shattering news. But there are some new ways to look at how it works in practice.

Some researchers pored over databases compiled by ProPublica, a nonprofit journalism outfit, of drug company payments made to doctors and the prescriptions doctors wrote for Medicare patients.

They found some provocative associations.

Male doctors appeared twice as likely as female colleagues to be influenced by drug industry blandishments. “This confirms experimental and field evidence suggesting that women are more honest and less corruptible than me,” the researchers write.

Doctors practicing in states where crimes of corruption are more common, such as Louisiana, were more likely to be influenced by drug company payments than those in states with fewer corruption-related crimes, such as Oregon.

The researchers also estimated how much a drug company’s wooing of doctors is worth: about 29 more Medicare prescriptions for each modest payment. For the big bucks (a payment of $1,000 or more), drugmakers can expect nearly 100 more prescriptions.

You can find the paper, “First, Do No Harm: Financial Conflicts in Medicine,” online at the Social Science Research Network. [Copyright 2013 NPR]

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