Sep, 2004
What explains the use of direct-to-consumer advertising of prescription drugs?
JOURNAL OF INDUSTRIAL ECONOMICS
- Volume
- 52
- Number
- 3
- First page
- 349
- Last page
- 379
- Language
- English
- Publishing type
- DOI
- 10.1111/j.0022-1821.2004.00230.x
- Publisher
- BLACKWELL PUBL LTD
Following the clarification of advertising regulation in 1997, direct-to-consumer advertising (DTCA) of prescription drugs has skyrocketed in the U.S., creating a controversy over the role of DTCA. Little is known, however, regarding what affects firms' advertising decisions and which drugs have been advertised to consumers. Using brand-level advertising data, I examine the determinants of DTCA of prescription drugs. I find that drugs that are new, of high quality, and for under-treated diseases are more frequently advertised. Furthermore, advertising outlays decrease with competition. These results complement the demand-side evidence that DTCA has a market-expanding effect but little business-stealing effect.
- Link information
- ID information
-
- DOI : 10.1111/j.0022-1821.2004.00230.x
- ISSN : 0022-1821
- Web of Science ID : WOS:000224031600003