Why do doctors choose a $2,000 drug over a $50 one?

[Sgent]

66. I almost certainly agree with most of your statement

and I completely agree that the idea of "kickbacks" from drug companies never really happened on a significant level.

That being said, drug companies marketing budget for a long time included everything from free dinners at some of the most expensive restaurants in town, to fully paid attendance to various drug sponsored medical conferences. Those were marketing expenditures rather than "kickbacks" because they never required physicians to use / prescribe their product to receive those benefits (ie all neurologists would be invited to this conference, etc.), but they led to the appearance of kickbacks and the distinction isn't necessarily well known.

In addition, reimbursement does play a role in decision making. For instance one physician group I'm aware of used a very inexpensive (1$ per injection) steroid when providing injections in their sliding fee clinic, and another more expensive steroid ($10) in their regular clinic. The reason for this was that the $1 steroid was reimbursed at about 25 cents, and the $10 was reimbursed by third party payers (including Medicare) at $50. When the reimbursements got back to normal the physicians switched to the cheaper drug for all patients.