The heterogeneity of concentrated prescribing behavior: Theory and evidence from antipsychotics

We present two new findings based on annual antipsychotic US prescribing data from IMS Health on 2867 psychiatrists who wrote 50 or more prescriptions in 2007. First, many of these psychiatrists have prescription patterns that are statistically significantly different than random draws from national market shares for prescriptions by psychiatrists. For example, many have prescription patterns that are significantly more concentrated than such draws. Second, among psychiatrists who are the most concentrated, different prescribers often concentrate on distinct drugs. Motivated by these two findings, we then construct a model of physician learning-by-doing that fits these facts and generates two further predictions: both concentration (on one or a few drugs) and deviation (from the prescription patterns of others) should be smaller for high-volume physicians. We find empirical support for these predictions. Furthermore, our model outperforms an alternative theory concerning detailing by pharmaceutical representatives.