The United States’ Experience with Direct-to-Consumer Advertising of Prescription
What Have We Learned?
Ernst R. Berndt
Economists have long emphasized that in healthcare, identification of the consumer is
ambiguous. Is it the patient, the physician acting as a professional agent on behalf of the patient,
or is it the third party payor?
In most but not all countries, pharmaceutical manufacturer sales
representatives, called “detailers,” are permitted to visit physicians in their offices, and provide
them with promotional material.
Representatives from pharmaceutical manufacturers also
interact with public sector payors such as ministries of health, as well as with private sector
payors, such as insurers and self-insured employers in the United States.
Currently only two countries, the U.S. and New Zealand, permit pharmaceutical
manufacturers to market directly to consumers, where consumers are defined as potential
ordinary patients, and not as healthcare providers.
The U.S. also now permits direct-to-consumer
advertising (“DTCA”) for prescribed medical devices.
Whether DTCA should be permitted at
all, permitted but only with much more stringent regulation, or replaced with public health
announcements, are issues on which much has been written, and continue to be controversial in
the U.S. and in New Zealand.
There is also a considerable literature surveying consumer and
physicians’ perceptions of DTCA.
Rather than revisiting the various debates, controversies and survey findings, I
summarize the accumulated empirical evidence in this chapter:
What have we learned to date
about the composition, overall size, and impacts of DTCA in the U.S.?
More specifically, in
assessing the U.S.’ experience with DTCA, I consider four sets of empirical issues:
(1) What is