Direct to Consumer Advertising and Prescription Choice

Published on Apr 20, 2005in Journal of Industrial Economics1.194
· DOI :10.2139/SSRN.700921
Toshiaki Iizuka13
Estimated H-index: 13
(Aoyama Gakuin University),
Ginger Zhe Jin30
Estimated H-index: 30
(UMD: University of Maryland, College Park)
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Abstract
This paper examines the effect of direct-to-consumer advertising (DTCA) of prescription drugs on doctors' choice of drug brands. Using antihistamines as an example, we show that DTCA has little effect on the choice of brand despite the massive DTCA expenditure incurred in this class. In contrast, promotional activities directed toward physicians have larger and longer lasting effects. These results, together with the market-expanding results shown in Iizuka and Jin (2005), suggest that DTCA is effective in increasing the aggregate demand per therapeutic class but does not affect doctor choice of prescription within a class. Therefore, DTCA may be viewed as a public good for all drugs in the same class.
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