Biomedical Engineering Reference
In-Depth Information
studies on the issue. Specifically, they find that the long-term competition-neutral
elasticity is 0.082 for DTCA, whereas for detailing is 0.278 and 0.109 for DTP adver-
tising. Thus, although the measures and methodologies used are quite different, there
is remarkable agreement between the two studies. Thus, the consolidated evidence
suggests that DTP activities have a much larger effect on prescriptions than DTCA,
rendering the physician as the primary decision-making agent in the prescription pro-
cess. This, from a public policy perspective, puts the onus back on the physicians who
not only have to evaluate the most appropriate regimen for their patients but also have
to achieve this after filtering out information directed to them as well as to their
patients. Our empirical analysis, presented in the next section, will revisit the issue of
the relative effectiveness of DTCA and DTP expenditures.
The magnitude of the DTCA effect should be put into perspective. Although
DTCA elasticities are “small” and comparable to those for consumer packaged
goods (Kolsarici and Vakratsas
2010
; Kremer et al.
2008
; Iizuka and Jin
2007
;
Narayanan et al.
2005
; Donohue and Berndt
2004
), two points are worth noting:
First, DTCA is addressed to patients who are primarily
influencers
and are removed
at least one step from the final (prescription) stage of the decision-making process
(Fig.
22.1
). Second, as Wosinska (
2005
) also noted, DTCA is unique in that it con-
tains negative information (risks) about the advertised brand. Considering these two
hurdles, achieving effectiveness levels close to those of consumer packaged goods
is noteworthy. But the final answer on the effectiveness of DTCA cannot be given
unless more research is done on how exactly DTCA works its influence all the way
to the physician's office as well as during the physician-patient exchange. Analysis
of individual patient-physician level data with models that quantify the hierarchy of
effects (e.g., Chandukala et al.
2011
) is a promising avenue to achieving these goals.
22.5
Empirical Illustration: DTCA and DTP Effects Over
the Life Cycle
In this section we conduct our own empirical analysis to illustrate the effects of
DTCA previously discussed and their relative effectiveness compared to DTP mar-
keting. We further examine whether DTCA effects exhibit dynamics over the life
cycle of different therapeutic classes.
22.5.1
Data
The data set, obtained from SDI Health, includes annual agent-level sales and promo-
tional spending information for three top-selling classes in the USA, namely, proton-
pump inhibitors (PPIs), selective serotonin reuptake inhibitor (SSRIs), and HMG-CoA
reductase inhibitors (Statins). The data cover a 12-year period between 1996 and 2007
for a total of 22 agents (i.e., 7 Statins, 10 SSRIs, and 5 PPIs). We selected these classes
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