The Successful Launch and Diffusion of New Therapies - Innovation and Marketing in the Pharmaceutical Industry - page 205

the new drug. Gradually, this uncertainty declines due to past detailing visits or
patient feedback that allow the physician to learn (see discussion of learning models
above). As a result, detailing visits become increasingly ineffective. A general les-
son for the pharmaceutical industry is to maximize their detailing spending at launch
and shortly afterward, and to cut the detailing budget when the new drug starts
maturing. Typically, models find that pharmaceutical managers may underspend at
launch or shortly afterward, whereas they may overspend in maturity.
Narayanan et al. ( 2005 ) suggest that this variation in findings regarding detailing
effectiveness is rooted in the difference between the role of detailing at the introduction
stage of a drug versus its role in subsequent stages. In early stages of the drug's life
cycle, physicians' experience with the drug is limited, and they are likely to be uncertain
about its efficacy. Thus, in the introductory phase, detailing is assumed to have a primar-
ily indirect effect by helping physicians reduce their uncertainty about the efficacy of the
drug. However, as physicians learn about the drug and gain experience with it, they have
less uncertainty about the drug's efficacy, and the effect of detailing becomes more
direct (i.e., reminder effects influencing preferences through goodwill accumulation).
Another important aspect of the effectiveness of detailing visits is the information
content that is provided in sales calls. Kappe and Stremersch ( 2013 ) investigate the
responsiveness of physicians to information provided across different drug attri-
butes. They also examine whether firms present positively biased information to
physicians, and whether this bias has an influence on the responsiveness of physi-
cians. In their study, they use data on the drug attributes presented in detailing visits,
and they find that pharmaceutical firms do not provide information on the right
product attributes at their optimal frequency. They also find that detailing visits that
include discussion of positively biased information in the long run have a lower
detailing effectiveness. These results imply that firms must optimally adjust their
messaging in order to improve physicians' responsiveness to detailing.
Pharmaceutical firms' spending on DTCA has increased dramatically in recent
years, from less than $1 billion US dollars in 1996 to $4.3 billion in 2010 (AdAge
2011 ). This increase has drawn attention from both practitioners and marketing
scholars, who have made efforts to analyze the effects of DTCA on demand and the
ROI from such marketing activities. As in the case of detailing, academic studies
on the effect of DTCA on prescriptions yield contradictory results. Some studies
claim that DTCA spending has a large effect on prescriptions (Atherly and Rubin
2009 ; Bell et al. 1999 ; Fischer and Albers 2010 ; Iizuka and Jin 2005 ; Koch-Laking
et al. 2010 ; Kolsarici and Vakratsas 2010 ; Ling et al. 2002 ; Meyerhoefer and
Zuvekas 2008 ; Weissman et al. 2004 ; Wilkes et al. 2000 ), whereas others claim it
has no effect, or a very limited one, on brand-level prescriptions (Calfee et al. 2002 ;
Donohue and Berndt 2004 ; Manchanda et al. 2008 ; Rosenthal et al. 2003 ;
Stremersch et al. 2013 ; Zachry et al. 2002 ). Kremer et al. ( 2008 ) even find that
DTCA has a negative effect on prescriptions in the fields of skin disease, neurology,
and psychiatry. Another set of studies on DTCA focuses mainly on studying the
ROI from such marketing activities by pharmaceutical firms (Wittink 2002 ;
Narayanan et al. 2004 ). These studies find that the ROI for DTCA is quite low.
Narayanan et al. ( 2004 ) further find a lower level of ROI for DTCA than for