Berndt's U.S.'s Experience with Direct-to-Consumer Advertising of Prescription Drugs-What Have We Le

Berndt's U.S.'s Experience with Direct-to-Consumer Advertising of Prescription Drugs-What Have We Le

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Chapter 9 The United States’ Experience with Direct-to-Consumer Advertising of Prescription Drugs: What Have We Learned? Ernst R. Berndt I. Introduction 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. 1 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. 2 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. 3 There is also a considerable literature surveying consumer and physicians’ perceptions of DTCA. 4 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 221
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the magnitude of DTCA relative to other forms of pharmaceutical promotion, and relative to sales? (2) Is DTCA widespread, or is it targeted to certain therapeutic areas? More generally, what are the determinants of DTCA targets? (3) What are the effects of DTCA on therapeutic class sales, and on individual product market shares within therapeutic classes? And (4), what have we learned to date regarding the impact of DTCA on patient quality of care, or surrogates for quality of care? Finally, I will also comment briefly on the experience of New Zealand with DTCA, and make several U.S. - New Zealand comparisons. In sum, these are the major empirical findings to date. Although DTCA has grown rapidly in the U.S., it is a relatively modest component of total prescription drug promotion spending, 13-15% between 2000 and 2003, and a much smaller proportion of sales, 2%. DTCA is relatively targeted to conditions for which one would expect the elasticity of sales with respect to marketing efforts to be substantial. The evidence to date generally suggests that when DTCA has an impact, it is primarily on overall sales at the level of a therapeutic class rather than on
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Berndt's U.S.'s Experience with Direct-to-Consumer Advertising of Prescription Drugs-What Have We Le

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