Sunday, August 18, 2013

First, Do No Harm: Financial Conflicts in Medicine* Joseph Engelberg Christopher A. Parsons Nathan Teff

Abstract: We explore financial conflicts of interest faced by doctors. Pharmaceutical firms
frequently pay physicians in the form of meals, travel, and speaking fees. Over half of the
334,000 physicians in our sample receive payment of some kind. When a doctor is paid, we find
that he is more likely to prescribe a drug of the paying firm, both relative to close substitutes and
even generic versions of the same drug. This payment-for-prescription effect scales with
transfer size, although doctors receiving only small and/or infrequent payments are also
affected. The pattern holds in nearly every U.S. state, but it is strongly and positively related to
regional measures of corruption.

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