How DTCA Influences Prescription Pharmaceutical Markets - Innovation and Marketing in the Pharmaceutical Industry - page 656

Years 2005-2007

30

PPI Class
SSRI Class
Statin Class

25

20

15

10

5

0 500 1000 1500 2000 2500

DTCA ($)

Fig. 22.9 Post-peak DTCA response functions

coefficients, suggests that DTP activities are the major drivers of pharmaceutical
sales for the three classes examined. It is worth noting that PJA is more significant
post-peak. This provides indirect support to the idea that physicians remain the
primary decision makers as DTP activities are more effective and that it pays off to
keep a mature drug in a physician's top-of-mind. Of course, in the case of maturity
the role of generics and mandatory switching to them required by some insurance
organizations will certainly be a contributing factor, but given the physician's
decision-making function there are gains to be made from DTP in maturity. Thus,
given DTP's higher resistance to fatigue, firms should allocate a higher proportion
of resources to DTP activities post-peak rather than using a constant DTP to DTCA
ratio throughout the life cycle.
In sum, our empirical analysis suggests that DTCA effects exhibit considerable
dynamics over the product life cycle as evidenced by their oversaturation in the
post-peak period of our data. We also confirmed previously discussed findings that
DTP expenditures are more effective than DTCA. In addition, DTP effects do not
dissipate as dramatically as DTCA but are rather resistant to therapeutic class life
cycle transitions. Thus, our results collectively provide further support for the argu-
ment that DTP remains the most dominant form of communication. In addition,
from a more casual observation perspective, the concurrence of sales and promo-
tional peaks may not be coincidental but rather a result of a deliberate decision by
firms to pull their resources from declining markets. In other words, as classes
mature firms turn their attention and shift their expenditures to other, growing
classes to maximize their return on investment (e.g., Iizuka and Jin 2005 ). This is
certainly an area worthy of further investigation.