The Impact of Direct-to-Consumer Advertising of Prescription Drugs on Physician Visits and Drug Requests: Empirical Findings and Public Policy Implications

International Journal of Research in Marketing, Forthcoming

Johnson School Research Paper Series No. 26-11

40 Pages Posted: 11 Apr 2011 Last revised: 19 Sep 2014

See all articles by Qiang Liu

Qiang Liu

Purdue University - Krannert School of Management

Sachin Gupta

Cornell University - Samuel Curtis Johnson Graduate School of Management

Date Written: April 7, 2011

Abstract

This study analyzes the effect of DTCA expenditures for anti-hyperlipidemia drugs on patient behaviors. The key findings are: (a) DTCA expenditures have a positive and long-term effect on the number of visits to physicians by newly-diagnosed hyperlipidemia patients. (b) The effectiveness of DTCA in generating new patient visits varies substantially across patient sub-groups. (c) The effect of DTCA is larger on drug visits than on non-drug-only visits. (d) Own-brand DTCA expenditures increase the number of patient requests for Lipitor and Zocor, but have no effect on patient requests for Pravachol. Competing drugs’ DTCA expenditures have a positive effect only on patient requests for the leading brand, Lipitor. (e) A cost-effectiveness analysis suggests that the economic benefits of DTCA in terms of life years saved by preventing cardiovascular disease are considerably larger than the costs of advertising. (f) DTCA on TV has strong effects on underserved segments of the population, such as those on Medicaid. We believe this finding should be carefully considered by proponents of a complete ban or stricter regulations on DTCA.

Keywords: advertising, pharmaceuticals, health care, DTCA, econometrics

Suggested Citation

Liu, Qiang and Gupta, Sachin, The Impact of Direct-to-Consumer Advertising of Prescription Drugs on Physician Visits and Drug Requests: Empirical Findings and Public Policy Implications (April 7, 2011). International Journal of Research in Marketing, Forthcoming; Johnson School Research Paper Series No. 26-11. Available at SSRN: https://ssrn.com/abstract=1804854

Qiang Liu (Contact Author)

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States

Sachin Gupta

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

Ithaca, NY 14853
United States

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