Bradley Shapiro studies empirical industrial organization and applied microeconomics. His research has largely focused on the pharmaceutical industry, with the goal of informing both firm strategy and public policy. His interests also extend to advertising, marketing in the health care sector, and organizational economics. Shapiro is especially interested in causal identification using natural experiments and regression discontinuity designs in quantitative marketing contexts. In recent research, he uses the discrete borders of television markets to identify the impact of advertising on demand in the antidepressant market. In other research, Shapiro and his co-authors study how public policy around the time of patent expiration affects competition in pharmaceutical markets.
Shapiro earned a Ph.D. in economics from Massachusetts Institute of Technology (MIT). Prior degrees include an M.S. in mathematics, a B.S., in mathematics, and a B.A., in economics all from Virginia Tech. Shapiro is also a certified private pilot and consults for a wine importing firm in his spare time.
At Booth, Shapiro teaches Marketing Strategy.
2015 - 2016 Course Schedule
REVISION: Advertising in Health Insurance Markets
We study the effect of television ads in the market for health insurance for the elderly. Regulators are concerned about firms potentially using ads to "cream skim", or attract an advantageous risk pool as well as the potential for firms to use misinformation to take advantage of the elderly. On the other hand, ads could provide useful information or remind people to reconsider their options, making regulation potentially welfare reducing. Using the discontinuity in advertising exposure created by the borders of television markets, we estimate television advertising to have on average zero lift on the share of seniors who choose private Medicare Advantage (MA) plans over government-provided Traditional Medicare (TM) with enough precision to reject the null of positive ROI from market expansion. Leveraging the unilateral cessation of advertising by United Healthcare for three years, we additionally find that rival advertising provided zero average impact on United's brand share with ...
REVISION: Positive Spillovers and Free Riding in Advertising of Prescription Pharmaceuticals: The Case of Antidepressants
Television advertising of prescription drugs is controversial, and it remains illegal in all but two countries. Much of the opposition stems from concerns that advertising directly to consumers may inefficiently distort prescribing patterns toward the advertised product. Despite the controversy surrounding the practice, its effects are not well understood. Exploiting a discontinuity in advertising along the borders of television markets, I estimate that television advertising of prescription antidepressants exhibits significant positive spillovers on rivals' demand. I then construct and estimate a multi-stage demand model that allows advertising to be pure category expansion, pure business stealing, or some of each. Estimated parameters indicate advertising has strong market-level demand effects that tend to dominate business-stealing effects. Spillovers are both large and persistent. Using the demand estimates and a stylized supply model, I explore the consequences of the positive ...
REVISION: Informational Shocks, Off-Label Prescribing and the Effects of Physician Detailing
Promotional strategies that pharmaceutical firms employ to convince physicians to prescribe their products are the subject of considerable regulatory scrutiny. In particular, regulators worry firms may use sales reps to try to convince physicians to prescribe drugs for uses that the Food and Drug Administration has not approved. Since 2004, 31 federal cases alleging off-label promotional practices have settled, totaling over $12 billion. In this paper, I study the effects of detailing on physician prescribing in the anti-psychotic category, which was the category most heavily targeted for off-label promotion. Using physician level panel detailing data combined with patient chart information, I explore how detailing causes physicians to prescribe for on-label versus off-label uses. This question is important for considering whether regulators should spend more or less of their scarce resources pursuing such cases. Additionally, with the risk of huge fines, this question is relevant to ...
New: Estimating the Cost of Strategic Entry Delay in Pharmaceuticals: The Case of Ambien CR
With the Hatch-Waxman Act of 1984, the FDA included an unchallengeable exclusivity period for new approved drugs, independent of patents. This generates an incentive for firms to strategically delay the introduction of new versions of drugs until just before patent expiration of the originals in order to take market share away from new generics rather than its own original product in its time of FDA exclusivity. While there is limited clinical evidence that reformulated products have higher efficacy than the original molecules, it is possible that they provide utility through other characteristics, such as fewer doses per day or a more even molecule decay rate. However, as suggested in the press and literature, it is possible that usage of reformulated products is driven by advertising rather than any tangible benefits. Using detailed prescribing and pricing data, I document strategic delay in the prescription sleep aid market. I find that adoption of the reformulation, Ambien CR is ...