In this article, the authors apply institutional theory to explain physician acceptance of pharmaceutical marketing payments and the mechanisms by which the behavior may be influenced by social groups. Using a large panel of over three million physician-year observations, the authors provide evidence that peer and organization norms, captured by the prevalence of peers and organizational members accepting pharmaceutical marketing payments, play an important role in one's decision to accept such payments. The authors further show that this effect attenuates with physical and psychological distances, as proximal social groups most influence one's decision to accept pharmaceutical marketing payments. The authors also find that being male, having longer tenure, or practicing at a teaching hospital strengthens the positive effect of peer influence on volume of pharmaceutical marketing payments accepted. The findings contribute to the literature on institutional theory, provide insights into the management of conflicts of interest, and suggest policy to mitigate the externalities resulting from direct-to-physician pharmaceutical marketing payment.
AndreoliNicoleLefkowitzJoel (2008), “Individual and Organizational Antecedents of Misconduct in Organizations,” Journal of Business Ethics, 85 (3), 309–22.
2.
AppelbaumSteven H.DeguireKyle J.LayMathieu (2005), “The Relationship of Ethical Climate to Deviant Workplace Behaviour,” Corporate Governance, 5 (4), 43–55.
3.
AvornJerrySoumeraiStephen B. (1983), “Improving Drug-Therapy Decisions Through Educational Outreach: A Randomized Controlled Trial of Academically Based Detailing,” New England Journal of Medicinedicine, 308 (24), 1457–63.
4.
BrodyHoward (2005), “The Company we Keep: Why Physicians Should Refuse To See Pharmaceutical Representatives,” The Annals of Family Medicine, 3 (1), 82–5.
5.
CampbellEric G.GruenRussell L.MountfordJamesMillerLawrence G.ClearyPaul D.BlumenthalDavid (2007), “A National Survey of Physician–Industry Relationships,” New England Journal of Medicine, 356 (17), 1742–50.
6.
Centers for Medicare & Medicaid Services (2021), “Fiscal Year 2020 Annual Report to Congress on the Open Payments Program,” https://www.cms.gov/files/document/open-payments-2020-annual-report-congress.pdf.
7.
ChughDollyBazermanMax H.BanajiMahzarin R. (2005), “Bounded Ethicality as a Psychological Barrier to Recognizing Conflicts of Interest,” in Conflicts of Interest: Challenges and Solutions in Business, Law, Medicine, and Public Policy. New York: Cambridge University Press, 74–95.
8.
CialdiniRobert B.KallgrenCarl A.RenoRaymond R. (1991), “A Focus Theory of Normative Conduct: A Theoretical Refinement and Reevaluation of the Role of Norms in Human Behavior,” Advances in Experimental Social Psychology, 24, 201–34.
9.
DeJongColetteAguilarThomasTsengChien-WenLinGrace A.BoscardinJohn W.DudleyAdams R. (2016), “Pharmaceutical Industry–Sponsored Meals and Physician Prescribing Patterns for Medicare Beneficiaries,” JAMA Internal Medicine, 176 (8), 1114–22.
10.
DeshpandéRohitWebsterFrederick E. (1989), “Organizational Culture and Marketing: Defining the Research Agenda,” Journal of Marketing, 53 (1), 3–15.
11.
DiMaggioPaul J.PowellWalter W. (1983), “The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields,” American Sociological Review, 48 (2), 147–60.
12.
EisenbergMatthew D.StoneElizabeth M.PittellHarlanMcGintyEmma E. (2020), “The Impact of Academic Medical Center Policies Restricting Direct-To-Physician Marketing on Opioid Prescribing,” Health Affairs, 39 (6), 1002–10.
13.
EisenhardtKathleen M. (1988), “Agency- and Institutional-Theory Explanations: The Case of Retail Sales Compensation,” Academy of Management Journal, 31 (3), 488–511.
14.
EynonGailHillsNancy ThorleyStevensKevin T. (1997), “Factors That Influence the Moral Reasoning Abilities of Accountants: Implications for Universities and the Profession,” Journal of Business Ethics, 16 (12), 1297–1309.
15.
Ferencz-KaddariMichallShifmanAnnieKoslowskyMeni (2016), “Modeling Psychologists’ Ethical Intention: Application of an Expanded Theory of Planned Behavior,” Psychological Reports, 118 (3), 691–709.
16.
FerrellO.C.GreshamLarry G. (1985), “A Contingency Framework for Understanding Ethical Decision Making in Marketing,” Journal of Marketing, 49 (3), 87–96.
17.
FickweilerFreekFickweilerWardUrbachEwout (2017), “Interactions Between Physicians and the Pharmaceutical Industry Generally and Sales Representatives Specifically and Their Association with Physicians’ Attitudes and Prescribing Habits: A Systematic Review,” BMJ Open, 7 (9), e016408.
18.
FitzgeraldM. PaulaYenchaChristopher (2019), “A Test of Policy Makers’ Formal and Lay Theories Regarding Health Care Prices,” Journal of Public Policy & Marketing, 38 (1), 3–18.
19.
FrenchJohn R.P.Jr.RavenBertram (1959), “The Bases of Social Power” in Studies in Social Power. Ann Arbor: University of Michigan Press, 150–67.
20.
Gallup (2020), “Honesty/Ethics in Professions” (accessed May 19, 2022), https://news.gallup.com/poll/1654/honesty-ethics-professions.aspx.
21.
GibbonsRobert V.LandryFrank J.BlouchDenise L.JonesDavid L.WilliamsFrederick K.LuceyCatherine R., et al. (1998), “A Comparison of Physicians’ and Patients’ Attitudes Toward Pharmaceutical Industry Gifts,” Journal of General Internal Medicine, 13 (3), 151–54.
22.
GreeneJeremy A. (2007), “Pharmaceutical Marketing Research and the Prescribing Physician,” Annals of Internal Medicine, 146 (10), 742–48.
23.
GrewalRajdeepDharwadkarRavi (2002), “The Role of the Institutional Environment in Marketing Channels,” Journal of Marketing, 66 (3), 82–97.
24.
GriffithDavid (1999), “Reasons for Not Seeing Drug Representatives: Lightening Workload, Cutting Costs, and Improving Quality,” British Medical Journal, 319 (7202), 69–70.
25.
HadlandScott E.KriegerMaxwell S.MarshallBrandon D. L. (2017), “Industry Payments to Physicians for Opioid Products, 2013–2015,” American Journal of Public Health, 107 (9), 1493–95.
HeckmanJames J. (1979), “Sample Selection Bias as a Specification Error,” Econometrica, 47 (1), 153–61.
28.
HuntShelby D.VitellScott (1986), “A General Theory of Marketing Ethics,” Journal of Macromarketing, 6 (1), 5–16.
29.
HuntShelby D.VitellScott J. (2006), “The General Theory of Marketing Ethics: A Revision and Three Questions,” Journal of Macromarketing, 26 (2), 143–53.
30.
JonesThomas M. (1991), “Ethical Decision Making by Individuals in Organizations: An Issue-Contingent Model,” Academy of Management Review, 16 (2), 366–95.
31.
KhazzakaMicheline (2019), “Pharmaceutical Marketing Strategies’ Influence on Physicians’ Prescribing Pattern in Lebanon: Ethics, Gifts, and Samples,” BMC Health Services Research, 19 (1), 80.
32.
KhezrimotlaghDariushCookWade D.ZhuJoe (2020), “A Nonparametric Framework to Detect Outliers in Estimating Production Frontiers,” European Journal of Operational Research, 286 (1), 375–88.
33.
LarkinIanAngDesmondSteinhartJonathanChaoMatthewPattersonMarkSahSunita, Tina Wu et al. (2017), “Association Between Academic Medical Center Pharmaceutical Detailing Policies and Physician Prescribing,” JAMA, 317 (17), 1785–95.
34.
LarsonMagali Sarfatti (1977), The Rise of Professionalism: A Sociological Analysis. Berkeley: University of California Press.
35.
LatanéBibbLiuJames H.NowakAndrzejBoneventoMichaelZhengLong (1995), “Distance Matters: Physical Space and Social Impact,” Personality and Social Psychology Bulletin, 21 (8), 795–805.
36.
LedgerwoodAlisonTropeYaacovChaikenShelly (2010), “Flexibility Now, Consistency Later: Psychological Distance and Construal Shape Evaluative Responding,” Journal of Personality and Social Psychology, 99 (1), 32–51.
37.
LiuQingOtterThomasAllenbyGreg M. (2007), “Investigating Endogeneity Bias in Marketing,” Marketing Science, 26 (5), 642–50.
38.
LiyanarachchiGregoryNewdickChris (2009), “The Impact of Moral Reasoning and Retaliation on Whistle-Blowing: New Zealand Evidence,” Journal of Business Ethics, 89 (1), 37–57.
39.
MartinKelly D.CullenJohn B. (2006), “Continuities and Extensions of Ethical Climate Theory: A Meta-Analytic Review,” Journal of Business Ethics, 69 (2), 175–94.
40.
MeyerJohn W.RowanBrian (1977), “Institutionalized Organizations: Formal Structure as Myth and Ceremony,” American Journal of Sociology, 83 (2), 340–63.
41.
MitchellAaron P.TrivediNiti U.GennarelliRenee L.ChimonasSusanTabatabaiSara M.GoldbergJohanna, et al. (2021), “Are Financial Payments From the Pharmaceutical Industry Associated With Physician Prescribing?” Annals of Internal Medicine, 174 (3), 353–61.
42.
O’BrienMary AnnRogersStephenJamtvedtGroOxmanAndrew D.Odgaard-JensenJanKristoffersenDoris Tove, et al. (2007), “Educational Outreach Visits: Effects on Professional Practice and Health Care Outcomes,” Cochrane Database of Systematic Reviews, 4, CD000409.
43.
O’ConnorGenevieve E. (2018), “The Relationships of Competition and Demographics to the Pricing of Health Insurance Premiums in Affordable Care Act–Era Health Insurance Markets,” Journal of Public Policy & Marketing, 37 (1), 88–105.
44.
O’FallonMichael J.ButterfieldKenneth D. (2012), “The Influence of Unethical Peer Behavior on Observers’ Unethical Behavior: A Social Cognitive Perspective,” Journal of Business Ethics, 109 (2), 117–31.
45.
PaulDavid P.III (2018), “The Inherently Flawed Relationship Between Physicians and Pharmaceutical Companies’ Gifts: TANSTAAFL,” Atlantic Marketing Journal, 7 (1), 89–102.
46.
PenninoClare M. (2002), “Does Tenure Impact Upon the Principled Reasoning of Managers?” Journal of Business Ethics, 40 (3), 219–26.
47.
PosnerBarry Z.SchmidtWarren H. (1984), “Values and the American Manager: An Update,” California Management Review, 26 (3), 202–16.
48.
PowellWalter W.ColyvasJeannette A. (2008), “Microfoundations of Institutional Theory” in The SAGE Handbook of Organizational Institutionalism. London: SAGE Publications, 276–98.
49.
QuinnJ. KevinReedJ. DavidBrowneM. NeilHiersWesley J. (1997), “Honesty, Individualism, and Pragmatic Business Ethics: Implications for Corporate Hierarchy,” Journal of Business Ethics, 16 (12/13), 1419–30.
50.
RandallDonna M.GibsonAnnetta M. (1991), “Ethical Decision Making in the Medical Profession: An Application of the Theory of Planned Behavior,” Journal of Business Ethics, 10 (2), 111–22.
51.
ReynoldsScott J. (2006), “Moral Awareness and Ethical Predispositions: Investigating the Role of Individual Differences in the Recognition of Moral Issues,” Journal of Applied Psychology, 91 (1), 233–43.
52.
RichAntoniaMedisauskaiteAstaPottsHenry W.W.GriffinAnn (2020), “A Theory-Based Study of Doctors’ Intentions to Engage in Professional Behaviours,” BMC Medical Education, 20 (1), 44.
53.
RothmanDavid J. (2000), “Medical Professionalism—Focusing on the Real Issues,” New England Journal of Medicine, 342 (17), 1284–86.
54.
RothmanDavid J.McDonaldWalter J.BerkowitzCarol D.ChimonasSusan C.DeAngelisCatherine D.HaleRalph W., et al. (2009), “Professional Medical Associations and Their Relationships with Industry: A Proposal for Controlling Conflict of Interest,” JAMA, 301 (13), 1367–72.
55.
SalancikGerald R.PfefferJeffrey (1978), “A Social Information Processing Approach to Job Attitudes and Task Design,” Administrative Science Quarterly, 23 (2), 224–53.
56.
SarkeesMatthew E.FitzgeraldM. PaulaLambertonCait (2020), “The Pandemic Ripple Effect: Understanding Marketing and Public Policy Opportunities in the Pharmaceutical Industry,” Journal of Public Policy & Marketing, 40 (1), 103–04.
57.
SchwartzLisa M.WoloshinSteven (2019), “Medical Marketing in the United States, 1997–2016,” JAMA, 321 (1), 80–96.
58.
ScottW. Richard (2008), “Approaching Adulthood: The Maturing of Institutional Theory,” Theory and Society, 37 (5), 427–42.
59.
ScottW. RichardMartinMartin RuefMendelPeter J.CaronnaCarol A. (2000), Institutional Change and Healthcare Organizations: From Professional Dominance to Managed Care. Chicago: University of Chicago Press.
60.
SinghJagdipJayantiRama K. (2014), “Closing the Marketing Strategy-Tactics Gap: An Institutional Theory Analysis of Pharmaceutical Value Chain,” in Innovation and Marketing in the Pharmaceutical Industry: Emerging Practices, Research, and Policies. New York: Springer, 701–35.
61.
SpencerEdward M.MillsAnn E.RortyMary V.WerhanePatricia H. (2000), Organization Ethics in Health Care. New York: Oxford University Press.
62.
SpingarnRoger W.BerlinJesse A.StromBrian L. (1996), “When Pharmaceutical Manufacturers’ Employees Present Grand Rounds, What Do Residents Remember?” Academic Medicine, 71 (1), 86–8.
63.
StatmanMeirTyebjeeTyzoon T. (1984), “Strategic Responses to Changes in Public Policy: The Case of the Pharmaceutical Industry and Drug Substitution Laws,” Journal of Public Policy & Marketing, 3 (1), 99–112.
64.
StuddertDavid M.MelloMichelle M.BrennanTroyen A. (2004), “Financial Conflicts of Interest in Physicians’ Relationships with the Pharmaceutical Industry—Self-Regulation in the Shadow of Federal Prosecution,” New England Journal of Medicine, 351 (18), 1891–1900.
65.
SwallowWilliam H.KianifardFarid (1996), “Using Robust Scale Estimates in Detecting Multiple Outliers in Linear Regression,” Biometrics, 52 (2), 545–56.
66.
ThompsonDennis F. (1993), “Understanding Financial Conflicts of Interest,” New England Journal of Medicine, 329, 573–76.
67.
TrevinoLinda KlebeYoungbloodStuart A. (1990), “Bad Apples in Bad Barrels: A Causal Analysis of Ethical Decision-Making Behavior,” Journal of Applied Psychology, 75 (4), 378–85.
68.
TsuiAnne S.WangHuiXinKatherine R. (2006), “Organizational Culture in China: An Analysis of Culture Dimensions and Culture Types,” Management and Organization Review, 2 (3), 345–76.
69.
U.S. Food & Drug Administration (2015), “The Impact of Direct-to-Consumer Advertising” (October 23), https://www.fda.gov/drugs/information-consumers-and-patients-drugs/impact-direct-consumer-advertising.
70.
VenkateshViswanathMorrisMichael G. (2000), “Why Don’t Men Ever Stop to Ask for Directions? Gender, Social Influence, and Their Role in Technology Acceptance and Usage Behavior,” MIS Quarterly, 24 (1), 115–39.
71.
VerbosAmy KlemmGerardJoseph A.ForsheyPaul R.HardingCharles S.MillerJanice S. (2007), “The Positive Ethical Organization: Enacting a Living Code of Ethics and Ethical Organizational Identity,” Journal of Business Ethics, 76 (1), 17–33.
72.
VervloetMarciaVan DijkLisetRademakersJany J.D.J.M.BouvyMarcel L.De SmetPeter A.G.M.PhilbertDaphne, et al. (2018), “Recognizing and Addressing Limited PHarmaceutical Literacy: Development of the RALPH Interview Guide,” Research in Social and Administrative Pharmacy, 14 (9), 805–11.
73.
VictorBartCullenJohn B. (1988), “The Organizational Bases of Ethical Work Climates,” Administrative Science Quarterly, 33 (1), 101–25.
74.
WaxmanHenry A. (2005), “The Marketing of Vioxx to Physicians,” memorandum (May 5), Committee on Government Reform.
75.
WazanaA. (2000), “Physicians and the Pharmaceutical Industry: Is a Gift Ever Just a Gift?” JAMA, 283 (3), 373–80.
76.
WooldridgeJeffrey M. (2002), Econometric Analysis of Cross Section and Panel Data. Cambridge, MA: MIT Press.
77.
YangShaHuMantian (Mandy)WinerRussell S.AssaelHenryChenXiaohong (2012), “An Empirical Study of Word-of-Mouth Generation and Consumption,” Marketing Science, 31 (6), 952–63.
78.
Zey-FerrellMaryFerrellO.C. (1982), “Role-Set Configuration and Opportunity as Predictors of Unethical Behavior in Organizations,” Human Relations, 35 (7), 587–604.
79.
Zey-FerrellMaryWeaverK. MarkFerrellO.C. (1979), “Predicting Unethical Behavior Among Marketing Practitioners,” Human Relations, 32 (7), 557–69.
80.
ZhangNing JackieTerryAmandaMcHorneyColleen A. (2014), “Impact of Health Literacy on Medication Adherence: A Systematic Review and Meta-Analysis,” Annals of Pharmacotherapy, 48 (6), 741–51.
