RT Journal Article
SR Electronic
T1 How Direct-to-Consumer Advertising for Prescription Drugs Affects Consumers' Welfare
JF Journal of Advertising Research
JO J Advert Res
FD WARC
SP JAR-2016-050
DO 10.2501/JAR-2016-050
A1 Mukherji, Prokriti
A1 Janakiraman, Ramkumar
A1 Dutta, Shantanu
A1 Rajiv, Surendra
YR 2016
UL http://www.journalofadvertisingresearch.com/content/early/2016/11/22/JAR-2016-050.abstract
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.