Panel Paper: Does Expansion of Public Health Insurance Affect Prescription Drug Marketing?

Saturday, November 9, 2019
I.M Pei Tower: Majestic Level, Vail (Sheraton Denver Downtown)

*Names in bold indicate Presenter

Thuy Nguyen1, W. David Bradford2, Rena Conti3 and Kosali Simon1, (1)Indiana University, (2)University of Georgia, (3)University of Chicago

Background and Aims: Expansions of eligibility for Medicaid under the Affordable Care Act (ACA) have increased insurance coverage and access to care (including prescription medications); however, the literature has not yet fully investigated supply-side responses to increased health care demand. Economic theory suggests that since pharmaceutical detailing is driven by the expected returns on investments, potential increased use of drugs and Medicaid pricing of drugs should impact detailing decisions. We examine the impacts of Medicaid expansion on drug advertising and promotional activities along product and geographical dimensions. Design: Data on all promotions by pharmaceutical companies directly to US physicians from 2013 to 2017 (Open Payments database) were linked to the National Plan and Provider Enumeration System in order to collect physician-level characteristics and analyzed using difference-in-difference regressions and event study analyses. Drug advertising data of the top 100 markets (designated market areas) in the US were obtained from one leading media intelligence company, Kantar Media, and examined in market-level difference-in-difference regressions. Measurements: The first outcome variables were dollar amounts of meal and non-meal (speaker honoraria, education, and consulting fees) payments received by each prescriber by month for: (i) all drugs, (ii) low priced drugs, (iii) high priced drugs, and (iv) high-market-share drugs. We estimated the drug price using the 2013 Medicare and Medicaid Services Medicaid Drug Utilization and identified the top drugs demanded by Medicaid eligible groups using the 2013 Medical Expenditure Panel Survey (MEPS) data. The second outcome variable was the estimated dollar amount spent by drug companies to purchase advertising space in magazines, TV, the Internet, newspapers, and radio. Findings: Comparing Medicaid expansion and non-expansion states for the pre-ACA period (August 2013 – December 2013) and the post-ACA period (January 2014 – December 2017), Medicaid expansion did not result in significant changes in provider-directed marketing for all drugs (the coefficient is positive but not significant). We found positive impacts of Medicaid expansion on meal payments for low-priced drugs (0.9 percent, p<0.05), but not for high-priced drugs. Medicaid expansion resulted in a statistically significant increase in meal payments for high-market-share drugs (2.1 percent, p<0.05) and in non-meal detailing payments for top-priced drugs (1.7 percent, p<0.01), but only in states with low managed-care penetration. Conclusions: Medicaid expansion did not significantly increase overall drug marketing from 2013 to 2017. When considering drug detailing along with product and geographical dimensions, we found that Medicaid expansion led to a significant increase in detailing for certain products and geographic locations. Medicaid expansion increased meal payments for low-priced drugs, but not for high-priced drugs. This expansion resulted in a statistically significant increase in meal payments for high-market-share drugs and non-meal payments for top-priced drugs, but only in states with low managed-care penetration.