Direct to Consumer Advertising and Prescription Choice

Abstract

This paper examines the effects of direct-to-consumer advertising (DTCA) of prescription drugs on doctor choice of drug brands. Using antihistamines as an example, we show that DTCA has little effect on the choice of brand despite the massive DTCA expenditure incurred in this class. In contrast, directed-to-physician advertising (i.e., detailing and medical journal advertising) has positive, significant, and long-lasting effects on the prescription choice of allergy drugs. These results, together with the market expanding results shown in Iizuka and Jin (forthcoming), suggest that DTCA is effective in increasing the aggregate demand per therapeutic class but does not affect doctor choice of prescription within a class. Therefore, DTCA may be viewed as a public good for all drugs in the same class.