The Relationship between DTCA, Drug Requests and Prescriptions: Uncovering Variation in Specialty and Space

Marketing Science, Forthcoming

51 Pages Posted: 7 Oct 2012 Last revised: 21 Feb 2013

See all articles by S. Stremersch

S. Stremersch

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Vardit Landsman

Tel Aviv University

Sriram Venkataraman

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Multiple version iconThere are 2 versions of this paper

Date Written: October 6, 2012

Abstract

Patients increasingly request their physicians to prescribe specific brands of pharmaceutical drugs. Popular belief is that requests are triggered by direct-to-consumer advertising (DTCA). We examine the relationship between DTCA, patient requests and prescriptions for statins. We find that while the effect of requests on prescriptions is significantly positive, the mean effect of DTCA on patient requests is negative, yet very small. More interestingly, both effects show substantial heterogeneity across physicians, which we uncover, using a hierarchical Bayes estimation procedure. We find that specialists receive more requests than primary care physicians but translate them less into prescriptions. In addition, we find that the socio-demographic profile of the area a physician practices in moderates the effects of DTCA on requests and of requests on prescriptions. For instance, physicians from areas with a higher proportion of minorities (i.e., Blacks and Hispanics) receive more requests, which are less triggered by DTCA, and are transferred into fewer prescriptions, than physicians from areas with a lower proportion of minorities. Our results challenge managers to revisit the role of DTCA in stimulating patient requests. At the same time, they may trigger public policy concerns regarding physicians’ accommodation of patient requests and the inequalities they may induce.

Keywords: Pharmaceuticals, advertising, patient request, prescriptions, socio-demographics

JEL Classification: M31

Suggested Citation

Stremersch, Stefan and Landsman, Vardit and Venkataraman, Sriram, The Relationship between DTCA, Drug Requests and Prescriptions: Uncovering Variation in Specialty and Space (October 6, 2012). Marketing Science, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2158145

Stefan Stremersch

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands
+31 10 408 8719 (Phone)
+31 10 408 9160 (Fax)

Vardit Landsman (Contact Author)

Tel Aviv University ( email )

Ramat Aviv
Tel-Aviv, 6997801
Israel

Sriram Venkataraman

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

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