Direct-to-consumer advertising of prescription drugs: A strategic analysis

Published

Journal Article

Consumers cannot purchase a prescription drug without a prescription from a physician, yet many prescription drugs are promoted to consumers with the help of direct-to-consumer (DTC) advertising. In this paper, we propose and test a competitive model of DTC advertising. We find that the brand specificity of DTC advertising can have an inverted U-shaped relationship with detailing, DTC advertising, and profits. Furthermore, an increase in the cross-price sensitivity between competing prescription drugs is not always detrimental to firm profits. A laboratory test lends qualitative support to some of our model predictions. We also discuss potential implications of DTC advertising for generic drugs and over-the-counter drugs. © 2009 INFORMS.

Full Text

Duke Authors

Cited Authors

  • Amaldoss, W; He, C

Published Date

  • May 1, 2009

Published In

Volume / Issue

  • 28 / 3

Start / End Page

  • 472 - 487

Electronic International Standard Serial Number (EISSN)

  • 1526-548X

International Standard Serial Number (ISSN)

  • 0732-2399

Digital Object Identifier (DOI)

  • 10.1287/mksc.1080.0411

Citation Source

  • Scopus