This paper estimates the effect of financial sponsorship of clinical trials on reported drug efficacy, leveraging the insight that the exact same pairs of drugs are often compared in different trials conducted by parties with different financial interests. I assemble new psychiatric trial data to estimate that a drug appears substantially more effective when the trial is sponsored by that drug’s manufacturer, compared with the same drug tested against the same combination of drugs but without sponsorship. This difference is not explained by observable characteristics, but publication bias is important. Preregistration may be effective in overcoming this bias.

We analyze selection into screening in the context of recommendations that breast cancer screening start at age 40. Combining medical claims with a clinical oncology model, we document that compliers with the recommendation are less likely to have cancer than younger women who select into screening or women who never screen. We show this selection is quantitatively important: shifting the recommendation from age 40 to 45 results in three times as many deaths if compliers were randomly selected than under the estimated patterns of selection. The results highlight the importance of considering characteristics of compliers when making and designing recommendations.