Direct-to-Consumer Advertising, Media Publicity and Utilization of Prescription Drugs
- Presenter:
Chair: Ernst R. Berndt; Discussant: Mon June 5, 2006 17:15-18:45 Room 335
Ever since pharmaceutical companies began to communicate directly with consumers, direct-to-consumer advertising (DTCA) has been under great scrutiny from policymakers, consumer groups and health plans. A small but growing literature has found that DTCA tends to increase category demand for pharmaceuticals. At the same time, another important source of information for consumers and physicians about prescription drugs - news and popular media stories (media coverage) - has not been explored.
However, studying the effects of media coverage on the utilization of advertised prescription drugs is important for at least four reasons. First, if media coverage is correlated with DTCA expenditures, then current estimates of DTCA effects may overstate the ability of DTCA to affect demand. Second, since media coverage is not subject to regulatory oversight (and may be perceived by consumers as more objective than DTCA), the relative effectiveness of DTCA and media coverage is also important. Third, from a marketing perspective it is also possible to assign a monetary value to the firm from media coverage by assessing what advertising spending would be necessary to get the same boost in utilization that is observed from, say, one positive front page story in a national magazine on a drug. Thus the policy debate surrounding DTCA will be incomplete without an understanding of what the interactions are between media coverage and DTCA.
To address these issues, we combine visit, prescription, health outcome, and demographic data on nearly 70,0000 patients (from more than 65 different primary care physician practices) in over 60 markets from 1998 through 2002 with DTCA expenditures and media coverage in those markets. We consider two product categories: Cox-2 inhibitors (for approximately 18,000 patients with osteoarthritis) and statins (for approximately 55,000 patients with hypercholesterolemia). We model changes to the flow of patients with the relevant disease categories (osteoarthritis and hypercholesterolemia) into the practices, and changes in physician prescribing patterns, as a function of class- and brand-specific DTCA, relevant media coverage, and other characteristics of the patients and clinicians.
