Direct to Consumer Advertising and Prescription Choice

Ginger Jin and Toshiaki Iizuka, Journal of Industrial Economics 55(4), 771, December .


This paper examines the effect of direct-to-consumer advertising (DTCA) on doctor choice of prescription drugs. Using antihistamines as an example, we show that DTCA has a small and insignificant effect on the choice of brand despite the massive DTCA expenditure incurred in this class. In contrast, direct-to-physician advertising (i.e., detailing and medical journal advertising) has a larger and long-lasting effect on prescription choice. These results, together with the market expanding results shown in Iizuka and Jin (2005), support the view that DTCA is effective in increasing the number of outpatient visits per therapeutic class but has little impact on the choice of prescription once the patient arrives at the physician office. As a result, DTCA may be viewed as a public good for all drugs in the same class.

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