How DTCA Influences Prescription Pharmaceutical Markets - Innovation and Marketing in the Pharmaceutical Industry - page 639

Chapter 22
How DTCA Influences Prescription
Pharmaceutical Markets

Demetrios Vakratsas and Ceren Kolsarici

Abstract This chapter focuses on the potential influence of direct-to-consumer
advertising (DTCA) on firm strategy, patients, physicians, and policy change.
Particularly, we identify the chain of DTCA influence through which public policy
actions, such as DTCA (de)regulation, prompt firm decisions as to whether or not to
engage in DTCA, which drugs to pick for direct-to-consumer communication, and
how much to allocate to DTCA versus the marketing-mix direct-to-physician
(DTP). We highlight the importance of disentangling DTCA effects on the two main
stakeholders, patient and the physician, to unravel the intricacies of prescription
decisions. With this aim, we analyze a data set for three top-selling classes in the
USA, namely, proton-pump inhibitors (PPIs), selective serotonin reuptake inhibi-
tors (SSRIs), and HMG-CoA reductase inhibitors (Statins). The results confirm
extant research and suggest that DTCA exhibits oversaturation effects later in the
life cycle of a therapeutic class and is unlikely to be the major driver of pharmaceu-
tical sales. On the other hand, DTP spending appears to be more influential and
resistant to life cycle effects.

22.1 Introduction

The drug prescription decision is highly complex and involves multiple stakehold-
ers. As a result, policy changes regarding prescription pharmaceuticals tend to
attract a lot of attention and invite heated debates. One such hotly debated policy

D. Vakratsas ( * )
Desautels Faculty of Management, McGill University, Montreal, QC, Canada
e-mail: [e-mail]
C. Kolsarici
Queen's University, School of Business, Kingston, ON, Canada
e-mail: [e-mail]