Impact of Direct-to-Consumer Advertising on Pharmaceutical Prices and Demand
Prescription drug expenditures are the fastest growing component of health care spending, rising threefold over the 1995–2007 period. Coinciding with this growth has been a surge in direct-to-consumer advertising (DTCA), made feasible by the Food and Drug Administrations's (FDA's) clarification of rules governing broadcast advertising in 1997 and 1999. We exploit this natural experiment to investigate the separate effects of broadcast and non-broadcast DTCA on price and demand utilizing an extended monthly time series for all advertised and non-advertised drugs in four therapeutic classes spanning 1994 through 2005, a period that enveloped the shifts in FDA guidelines and the consequent DTCA expansion. Controlling for physician-directed promotion, fixed-effects models indicate broadcast DTCA positively impacts own-sales and price (elasticities of 0.10 and 0.05), while non-broadcast DTCA has a relatively smaller impact. Expansions in broadcast DTCA account for 19% of the overall growth in drug expenditures, two-thirds of this impact being driven by higher demand and the remainder due to higher prices. doi: http://dx.doi.org/10.4284/0038-4038-79.1.97
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 79 (2012)
Issue (Month): 1 (July)
|Contact details of provider:|| Web page: http://www.southerneconomic.org/|
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:sej:ancoec:v:79:1:y:2012:p:97-126. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laura Razzolini)
If references are entirely missing, you can add them using this form.