How DTCA Influences Prescription Pharmaceutical Markets

Abstract

This chapter focuses on the potential influence of direct-to-consumer advertising (DTCA) on firm strategy, patients, physicians, and policy change. Particularly, we identify the chain of DTCA influence through which public policy actions, such as DTCA (de)regulation, prompt firm decisions as to whether or not to engage in DTCA, which drugs to pick for direct-to-consumer communication, and how much to allocate to DTCA versus the marketing-mix direct-to-physician (DTP). We highlight the importance of disentangling DTCA effects on the two main stakeholders, patient and the physician, to unravel the intricacies of prescription decisions. With this aim, we analyze a data set for three top-selling classes in the USA, namely, proton-pump inhibitors (PPIs), selective serotonin reuptake inhibitors (SSRIs), and HMG-CoA reductase inhibitors (Statins). The results confirm extant research and suggest that DTCA exhibits oversaturation effects later in the life cycle of a therapeutic class and is unlikely to be the major driver of pharmaceutical sales. On the other hand, DTP spending appears to be more influential and resistant to life cycle effects. IntroductionThe drug prescription decision is highly complex and involves multiple stakeholders. As a result, policy changes regarding prescription pharmaceuticals tend to attract a lot of attention and invite heated debates. One such hotly debated policy

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