Advertisement

Who cares about a label? The effect of pediatric labeling changes on prescription drug utilization

  • Christopher Ody
  • Matt SchmittEmail author
Research article

Abstract

Off-label drug use is common, particularly in pediatric populations. In response, legislation requires and/or provides financial incentives for drug manufacturers to perform pediatric clinical trials. Using New Hampshire’s all-payer claims database, we examine the impact of subsequent changes to drug labeling on pediatric drug utilization. To separate changes in utilization induced by labeling changes from other temporal factors, we estimate difference-in-differences models that compare utilization trends for pediatric patients to those of adults. We estimate that establishing safety and efficacy increases a drug’s market share by (a statistically significant) 2.8 percentage points, whereas failure to do so decreases a drug’s market share by (a statistically insignificant) 0.9 percentage points. We then interpret these estimates within the context of public and market incentives to conduct pediatric clinical trials.

Keywords

Pediatric labeling Prescription drug utilization Pediatric exclusivity 

JEL Classification

I11 I18 

Notes

References

  1. Azoulay, P. (2002). Do pharmaceutical sales respond to scientific evidence? Journal of Economics & Management Strategy, 11(4), 551–594.CrossRefGoogle Scholar
  2. Bazzano, A. T., Mangione-Smith, R., Schonlau, M., Suttorp, M. J., & Brook, R. H. (2009). Off-label prescribing to children in the United States outpatient setting. Academic Pediatrics, 9(2), 81–88.CrossRefGoogle Scholar
  3. Benjamin, D. K., Smith, P. B., Murphy, M. D., Roberts, R., Mathis, L., Avant, D., et al. (2006). Peer-reviewed publication of clinical trials completed for pediatric exclusivity. JAMA, 296(10), 1266–1273.CrossRefGoogle Scholar
  4. Benjamin, D. K., Smith, P. B., Sun, M. J. M., Murphy, M. D., Avant, D., Mathis, L., et al. (2009). Safety and transparency of pediatric drug trials. Archives of Pediatrics & Adolescent Medicine, 163(12), 1080–1086.CrossRefGoogle Scholar
  5. Berndt, E. R., & Aitken, M. L. (2011). Brand loyalty, generic entry and price competition in pharmaceuticals in the quarter century after the 1984 Waxman–Hatch legislation. International Journal of the Economics of Business, 18(2), 177–201.CrossRefGoogle Scholar
  6. Busch, S. H., & Barry, C. L. (2009). Pediatric antidepressant use after the black-box warning. Health Affairs, 28(3), 724–733.CrossRefGoogle Scholar
  7. Calvo, C. B., & Rubinstein, A. (2002). Influence of new evidence on prescription patterns. The Journal of the American Board of Family Practice, 15(6), 457–462.PubMedGoogle Scholar
  8. Dorsey, E. R., Rabbani, A., Gallagher, S. A., Conti, R. M., & Alexander, G. C. (2010). Impact of FDA black box advisory on antipsychotic medication use. Archives of Internal Medicine, 170(1), 96–103.CrossRefGoogle Scholar
  9. Dusetzina, S. B., Higashi, A. S., Dorsey, E. R., Conti, R., Huskamp, H. A., Zhu, S., et al. (2012). Impact of FDA drug risk communications on health care utilization and health behaviors: A systematic review. Medical Care, 50(6), 466.CrossRefGoogle Scholar
  10. Field, M. J., Boat, T. F., et al. (2012). Safe and effective medicines for children: Pediatric studies conducted under the Best Pharmaceuticals for Children Act and the Pediatric Research Equity Act. Washington, DC: National Academies Press.Google Scholar
  11. Frank, R. G., & Salkever, D. S. (1997). Generic entry and the pricing of pharmaceuticals. Journal of Economics & Management Strategy, 6(1), 75–90.CrossRefGoogle Scholar
  12. GAO. (2011). Products studied under two related laws, but improved tracking needed by FDA. Report to Congressional Committees.Google Scholar
  13. Iizuka, T., & Jin, G. Z. (2005). The effect of prescription drug advertising on doctor visits. Journal of Economics & Management Strategy, 14(3), 701–727.CrossRefGoogle Scholar
  14. Kimland, E., & Odlind, V. (2012). Off-label drug use in pediatric patients. Clinical Pharmacology & Therapeutics, 91(5), 796–801.CrossRefGoogle Scholar
  15. Ladanie, A., Ioannidis, J. P., Stafford, R. S., Ewald, H., Bucher, H. C., & Hemkens, L. G. (2018). Off-label treatments were not consistently better or worse than approved drug treatments in randomized trials. Journal of Clinical Epidemiology, 94, 35–45.CrossRefGoogle Scholar
  16. Lamas, G. A., Pfeffer, M. A., Hamm, P., Wertheimer, J., Rouleau, J.-L., & Braunwald, E. (1992). Do the results of randomized clinical trials of cardiovascular drugs influence medical practice? New England Journal of Medicine, 327(4), 241–247.CrossRefGoogle Scholar
  17. Larkin, I., Ang, D., Steinhart, J., Chao, M., Patterson, M., Sah, S., et al. (2017). Association between academic medical center pharmaceutical detailing policies and physician prescribing. JAMA, 317(17), 1785–1795.CrossRefGoogle Scholar
  18. Li, J. S., Eisenstein, E. L., Grabowski, H. G., Reid, E. D., Mangum, B., Schulman, K. A., et al. (2007). Economic return of clinical trials performed under the pediatric exclusivity program. JAMA, 297(5), 480–488.CrossRefGoogle Scholar
  19. Martin, L., Hutchens, M., Hawkins, C., & Radnov, A. (2017). How much do clinical trials cost? Nature Reviews Drug Discovery, 16, 381–382.CrossRefGoogle Scholar
  20. Mizik, N., & Jacobson, R. (2004). Are physicians “easy marks”? Quantifying the effects of detailing and sampling on new prescriptions. Management Science, 50(12), 1704–1715.CrossRefGoogle Scholar
  21. Nordhaus, W. D. (1969). Invention, growth and welfare: A theoretical treatment of technological change. Cambridge, MA: MIT Press.Google Scholar
  22. Olson, M. K., & Yin, N. (2018). Examining firm responses to R&D policy: An analysis of pediatric exclusivity. American Journal of Health Economics, 4(3), 321–357.CrossRefGoogle Scholar
  23. Price, J., & Simon, K. (2009). Patient education and the impact of new medical research. Journal of Health Economics, 28(6), 1166–1174.CrossRefGoogle Scholar
  24. Radley, D. C., Finkelstein, S. N., & Stafford, R. S. (2006). Off-label prescribing among office-based physicians. Archives of Internal Medicine, 166(9), 1021–1026.CrossRefGoogle Scholar
  25. Roberts, R., Rodriguez, W., Murphy, D., & Crescenzi, T. (2003). Pediatric drug labeling: Improving the safety and efficacy of pediatric therapies. JAMA, 290(7), 905–911.CrossRefGoogle Scholar
  26. Rodriguez, W., Selen, A., Avant, D., Chaurasia, C., Crescenzi, T., Gieser, G., et al. (2008). Improving pediatric dosing through pediatric initiatives: What we have learned. Pediatrics, 121(3), 530–539.CrossRefGoogle Scholar
  27. Sachs, A. N., Avant, D., Lee, C. S., Rodriguez, W., & Murphy, M. D. (2012). Pediatric information in drug product labeling. JAMA, 307(18), 1914–1915.CrossRefGoogle Scholar
  28. Shapiro, B. T. (2018). Informational shocks, off-label prescribing, and the effects of physician detailing. Management Science,64(12), 5925–5945.CrossRefGoogle Scholar
  29. Shirkey, H. (1968). Editorial comment: Therapeutic orphans. Journal of Pediatrics, 72(1), 119–120.CrossRefGoogle Scholar
  30. Sinkinson, M., & Starc, A. (2019). Ask your doctor? Direct-to-consumer advertising of pharmaceuticals. The Review of Economic Studies,86(2), 836–881.CrossRefGoogle Scholar
  31. Stafford, R. S. (2008). Regulating off-label drug use—Rethinking the role of the FDA. New England Journal of Medicine, 358(14), 1427–1429.CrossRefGoogle Scholar
  32. Wharton, G. T., Murphy, M. D., Avant, D., Goldsmith, J. V., Chai, G., Rodriguez, W. J., et al. (2014). Impact of pediatric exclusivity on drug labeling and demonstrations of efficacy. Pediatrics, 134(2), e512–e518.CrossRefGoogle Scholar
  33. Wilson, J. T. (1975). Pragmatic assessment of medicines available for young children and pregnant or breast-feeding women. Basic and Therapeutic Aspects of Perinatal Pharmacology, 411–421.Google Scholar
  34. Wilson, J. T. (1999). An update on the therapeutic orphan. Pediatrics, 104, 585–590.PubMedGoogle Scholar
  35. Wosinska, M. (2002). Just what the patient ordered? Direct-to-consumer advertising and the demand for pharmaceutical products. Working Paper.Google Scholar
  36. Yin, W. (2008). Market incentives and pharmaceutical innovation. Journal of Health Economics, 27(4), 1060–1077.CrossRefGoogle Scholar
  37. Yin, W. (2009). R&D policy, agency costs and innovation in personalized medicine. Journal of Health Economics, 28(5), 950–962.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Northwestern UniversityEvanstonUSA
  2. 2.UCLALos AngelesUSA

Personalised recommendations