Investigating the Impact of Advertising on Smoking Cessation: The Role of Direct-to-Consumer Prescription Drug Advertising

Access barriers to products and the availability of over-the-counter substitutes critically shape how advertising affects consumer choices in healthcare markets, yet these relationships remain understudied. We examine this phenomenon in the smoking cessation market, where prescription and over-the-counter options coexist with varying efficacy and access barriers. Analyzing data on prescription records, retail sales, and advertising exposure, we estimate both own- and cross-advertising elasticities across multiple product categories including prescription drugs, over-the-counter nicotine replacement therapies (NRTs), e-cigarettes, and traditional cigarettes. We find that prescription drug advertising reduces cigarette consumption whereas nicotine replacement therapy advertising does not. This difference occurs because prescription advertising expands demand across prescription cessation medications, whereas nicotine replacement advertising diverts consumers from more effective prescription options. Insurance coverage significantly moderates these elasticities: where coverage is limited, prescription advertising leads to greater spillovers toward over-the-counter substitutes. Despite these spillovers, prescription drug advertising yields a meaningful reduction in cigarette consumption and net nicotine intake. These findings demonstrate that obtaining a complete picture of advertising’s impact on public health outcomes requires accounting for both cross-category effects and institutional constraints in healthcare markets.