Direct-to-Consumer Advertising of Pharmaceuticals: An Integrative Review - Innovation and Marketing in the Pharmaceutical Industry - page 636

response of new drug manufacturers is to expand their marketing efforts to
physicians, in an effort to substitute for advertising (Campbell 2011 ). Obviously
competing fi rms (manufacturers of incumbent brands in the category) would
need to rethink their optimal marketing strategies and expenditures in the event
of a ban. Further, sales and market shares of all drugs in the category, especially
the new drug, will be affected. Another concern is that some individuals who
would benefi t from the new drug might remain unaware because of the advertising
ban, thereby lowering overall welfare.
One approach to address this question is to develop a structural model of the
competitive market that incorporates both the demand for the prescription drug and
equilibrium marketing decisions of competing fi rms. Such a model would enable
the researcher to then consider the advertising moratorium as a counterfactual and
simulate the consequences of this event.
In conclusion, our review of the literature on DTCA indicates that this topic has
received attention in multiple fi elds, including marketing, health economics, medicine,
public policy, and law and economics. However, this remains a “hot” topic with near
daily coverage in the media, providing rich fodder for new and interesting research
questions that are important to fi rms, patients, and policy makers. In fact, we found that
the literature was so vast and diverse that it was challenging to identify and summarize
a representative subset in this chapter. In this chapter we have identifi ed a few unre-
solved research questions that we believe are signifi cant and worthy of future research.
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