How DTCA Influences Prescription Pharmaceutical Markets - Innovation and Marketing in the Pharmaceutical Industry - page 641

actions, such as DTCA (de)regulation, prompts firm decisions as to whether or not
engage in DTCA, which drugs to pick for direct-to-consumer communication, and
how much to allocate on DTCA vs. the rest of marketing-mix DTP. The marketplace
influence of DTCA then extends over two distinct stakeholder groups, mainly
patients and physicians. The former, besides being the “consumers,” also assume
the role of potential influencers by submitting specific requests to the latter trig-
gered by DTCA. The latter are decision makers who may also be influenced by
DTCA messages. Thus, when DTCA effects are measured in terms of prescriptions,
as frequently is the case, it is difficult to disentangle the effects on the two possible
agents, patient and physician. Due to the complexity of the decision and the multi-
ple layers of DTCA influence, academic research can play a vital role as a catalyst
for policy assessment and changes since it can provide a rigorous evaluation of
these effects. It then follows that an examination of research on the various DTCA
effects is of paramount importance.
One could identify two eras of research on the nature of the DTCA effect. The
first covers the 5-year period after the reinterpretation (1997-2002), during which
much of the literature, mainly appearing in health science journals, focused on the
DTCA debate with very little evidence from formal econometric analyses. Advocates
of each side typically relied on selected figures from surveys, predominantly the
ones conducted by FDA and Prevention magazine, to provide arguments for or
against DTCA (e.g., Calfee et al. 2002 ; Lexchin and Mintzes 2002 ). While there is
little disagreement that DTCA raises the awareness of patients for available medica-
tions, the extent to which such ads are educational is fiercely debated (e.g., Holmer
2002 ; Wolfe 2002 ). In particular, balance, clarity, and quality of risk and benefit
information are concerns frequently raised by the critics. However, due to lack of
econometric analyses up to that point most researchers agreed that definitive
answers regarding the effects of DTCA, good or bad, could not be provided.
After 2002, econometric analyses started featuring more prominently in the lit-
erature, particularly in marketing and economics, which allowed for a more formal
quantification of the arguments made in the pre-2002 era. It is worth noting that for
a topic producing heated and highly polarized arguments, surprisingly little econo-
metric research has been done. 2 Nevertheless, this research has managed to provide
some econometric answers to the questions raised by both proponents and critics of
DTCA. The econometric analyses are mostly based on industry data, such as sales,
market share, DTCA, and other (DTP) marketing expenditures, and cover a few or
multiple drug classes. Only a few studies use individual-level claims data.
The rest of the chapter is organized as follows. Before we proceed with the
review of related academic literature, we provide a framework and discussion for
DTCA regulation around the world. Following the academic literature review, we
2 The meta-analysis by Kremer et al. ( 2008 ) examines 156 DTCA elasticities from 17 studies. Of
those, two analyze data before the 1997 clarification and three were working papers at the time of
the publication. Since then relatively few econometric studies have been published, most notably
Fischer and Albers ( 2010 ) and Kolsarici and Vakratsas ( 2010 ).