Advertising and Competition in the Ethical Pharmaceutical Industry: The Case of Antihypertensive Drugs

This paper uses data on the majority of name‐brand antihypertensive drugs marketed in the United States during 1988–93 to test the hypothesis that advertising decreases the price elasticity of demand in the pharmaceutical industry. This is the first study to directly estimate the effects of drug product promotion on the price elasticity of demand in this industry. We find strong evidence of an advertising effect. In particular, detailing efforts...