PT  - JOURNAL ARTICLE
AU  - Prokriti Mukherji
AU  - Ramkumar Janakiraman
AU  - Shantanu Dutta
AU  - Surendra Rajiv
TI  - How Direct-to-Consumer Advertising for Prescription Drugs Affects Consumers' Welfare
AID  - 10.2501/JAR-2016-050
DP  - 2016 Nov 23
TA  - Journal of Advertising Research
PG  - JAR-2016-050
4099  - http://www.journalofadvertisingresearch.com/content/early/2016/11/22/JAR-2016-050.short
4100  - http://www.journalofadvertisingresearch.com/content/early/2016/11/22/JAR-2016-050.full
AB  - In August 1997, the U.S. Food and Drug Administration (FDA) allowed brand-specific advertising on television. A simultaneous rise in direct-to-consumer advertising (DTCA) spending and prescription drug sales has resulted in a heated debate among pharmaceutical firms and medical practitioners, as well as in the U.S. Congress and the popular press. One side claims that DTCA creates demand and higher prices for the advertised brands; the other claims that DTCA increases consumer knowledge. The current study sheds light on the debate with a comparison of consumer welfare before and after the 1997 policy change, using a structural econometric model. The results suggest that DTCA seems to be increasing consumer welfare.