ABSTRACT In August 1997, the U.S. Food and Drug Administration (FDA) allowed brand-specific advertising on television. A simultaneous rise in direct-to-consumer advertising (DTCA) spending and prescription drug sales has resulted in a heated debate among pharmaceutical firms and medical practitioners, as well as in the U.S. Congress and the popular press. One side claims that DTCA creates demand and higher prices for the advertised brands; the other claims that DTCA increases consumer knowledge. The current study sheds light on the debate with a comparison of consumer welfare before and after the 1997 policy change, using a structural econometric model. The results suggest that DTCA seems to be increasing consumer welfare.
#2John D. C. Little(MIT: Massachusetts Institute of Technology)H-Index: 38
A multinomial logit model of brand choice, calibrated on 32 weeks of purchases of regular ground coffee by 100 households, shows high statistical significance for the explanatory variables of brand loyalty, size loyalty, presence/absence of store promotion, regular shelf price and promotional price cut. The model is parsimonious in that the coefficients of these variables are modeled to be the same for all coffee brand-sizes. The calibrated model predicts remarkably well the share of purchases b...
Restricting advertising is one way governments seek to reduce consumption of potentially harmful goods. There have been increasing calls to apply a similar policy to the junk food market. The effect will depend on how brand advertising influences consumer demand, and on the strategic pricing response of oligopolistic firms. We develop a model of consumer demand and dynamic oligopoly supply in which multi-product firms compete in prices and advertising budgets. We model the impact of advertising ...
Background Pharmaceutical firms heavily promote their products and may have changed marketing strategies in response to reductions in new product approvals, restrictions on some forms of promotion, and the expanding role of biologic therapies. Methods We used descriptive analyses of annual cross-sectional data from 2001 through 2010 to examine direct-to-consumer advertising (DTCA) (Kantar Media) and provider-targeted promotion (IMS Health and SDI), including: (1) inflation-adjusted total promoti...
#1Jayson L. Lusk(OSU: Oklahoma State University–Stillwater)H-Index: 68
#2Stéphan Marette(INRA: Institut national de la recherche agronomique)H-Index: 27
This paper integrates several areas of the literature by more fully developing the linkage between demand estimates and the welfare effects of food labels and bans for three common survey/experimental approaches used to elicit consumer preferences. We present empirical applications related to beef cloning and methylmercury in fish where, for the same data sets, we compare each value elicitation approach in terms of the consumer surplus changes that result from two regulations. Welfare measures v...
Direct-to-consumer advertising (DTCA) of prescription drugs has remained controversial since regulations were liberalized by the Food and Drug Administration in 1997.We reviewed empirical evidence addressing the claims made in the policy debate for and against DTCA. This advertising has some benefits, but significant risks are evident as well, magnified by the prominence of DTCA in population-level health communications.To minimize potential harm and maximize the benefits of DTCA for population ...
ABSTRACT This article reports the findings of two surveys examining U.K. physician and consumer attitudes to the introduction of direct to consumer advertising (DTCA), and its likely impact, if implemented, in the strategically important U.K. prescription drug market. The findings, in general, suggest that neither physicians nor consumers are positively disposed to the advertising of prescriptions drugs, although significant differences in attitudes toward such policies emerged between the two g...
Purpose – The importance of consumer involvement is well recognized in marketing theory, but has been absent from past inquiries in consumers' processing of DTC advertisements. The authors believe it is necessary to account for varying levels of involvement between consumers in order to better appreciate their responses to DTC advertisement claims. The present study aims to shed additional insight into the relationship between consumer involvement and the processing of risk information in DTC ad...
#2Ginger Zhe Jin(UMD: University of Maryland, College Park)H-Index: 31
The dramatic increase of direct-to-consumer advertising (DTCA) of prescription drugs created intensive debates on its effects on patient and doctor behaviors. Combining 1994–2000 DTCA data with the 1995–2000 National Ambulatory Medical Care Surveys, we examine the effect of DTCA on doctor visits. Consistent with the proponents' claim, we find that higher DTCA expenditures are associated with increased doctor visits, especially after the Food and Drug Administration clarified DTCA rules in August...
Abstract The authors investigate the changing role of marketing communication over the life cycle of a new product category. They postulate two effects of marketing communication on consumers' choices: an “indirect effect” through reduction of uncertainty about product quality and a “direct effect” (i.e., more is better). The authors expect that the indirect effect is relatively larger in the early, postlaunch stages. They develop a structural model of demand that allows for such temporal differ...
Because of their arm's-length relationship with patients, pharmaceutical manufacturers have been interested in whether drug advertising can improve therapy compliance. Contrary to many industry surveys, the author finds that the impact is small in economic terms, the effect spills over to other brands, and, in certain cases, the effect may decrease average compliance rates.
ABSTRACT The oligopolistic nature of the U.S. pharmaceutical industry presents its members with a unique opportunity to leverage the interaction between competitive pricing strategy and promotion strategy. Previous studies have examined the role of direct-to-consumer advertising in influencing demand and sales; this study emphasizes the impact of consumer advertising on a supply-side phenomenon, the setting of prices relative to those of close competitors.
Last. Rinad S. Beidas(UPenn: University of Pennsylvania)H-Index: 41
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There is growing recognition that it is important to involve youth and caregivers in the implementation of evidence-based treatments (EBTs). This study explored how youth and caregivers who received trauma-focused cognitive-behavioral therapy (TF-CBT) in a public behavioral health system perceived the concept of EBT, their experience with treatment, their perceptions of TF-CBT, and whether their perceptions varied as a function of clinical improvement. Participants were eight youth (aged 10–17) ...
#1Wendy Macias(TCU: Texas Christian University)H-Index: 14
After over two decades of direct-to-consumer pharmaceutical advertising (DTCA), the ads have changed very little, both within and over the years. One respondent in this exploratory study called it the "sea of same." To better understand why agency professionals, their pharmaceutical clients, and consumers operate in a "sea of same," in-depth interviews were conducted with nine advertising agency professionals who work on DTCA and health-advertising accounts. Respondents discussed the research, p...
#2Jorge Villegas(UIS: University of Illinois at Springfield)H-Index: 14
Purpose The purpose of this paper is to examine the impact of personal relevance, source credibility and advertising appeal type on the emotional and cognitive processing of a direct to consumer pharmaceutical ad for a meningitis vaccine. Design/methodology/approach A 2 × 2 experiment was used, and path analysis was undertaken to test the hypotheses. Findings Resultant models indicated that unvaccinated (more at risk) and vaccinated (less at risk) participants are persuaded through different pat...
