Doctors Who Prescribed Salix Drugs Ate Well

Selling prescription drugs is a classic principal-agent problem. The key decision-makers are the doctors who write the prescriptions, but they're not the ones paying for the drugs, or taking them.1465506130227 So competing on, for instance, price is dumb. Doctors may not even know how much the drugs they provide cost, and they don't have much in the way of fiduciary responsibility to insurance companies. Competing on effectiveness is better; I gather that most doctors do care about their patients' health. But at some level the simplest way to sell prescription drugs is to bribe doctors to prescribe them. This is all well known, and bad and illegal. You can't just bribe doctors to prescribe your drugs, come on.1465575206342

So you have to fall back to competing on effectiveness. But just making an effective drug isn't enough; you also have to convince doctors that your drug is effective. How do you do that? Well, you get them in a room, and you have someone -- like another doctor with experience prescribing your drug -- explain to them how your drug works and why it's good, either in person or in a pre-recorded presentation. If sometimes the room is Le Bernardin, well, at least the doctors are getting a useful explanation with their fancy meal. And if the recorded presentation is played on a laptop turned toward the wall and with the sound off, well ... at least the doctors are getting a fancy meal?