Does direct-to-consumer advertising of pharmaceutical drugs deliver results?

Does direct-to-consumer advertising (DTCA) of pharmaceutical drugs lead to an increase in the number of prescription requests of those drugs by patients? Considering that pharmaceutical manufacturers spent US$4.3 billion on DTCA in 2010, the answer is of great significance.

Surprisingly then, studies into the extent to which patient requests by brand name are triggered by DTCA are rare and inconclusive. However, a paper written by ERIM researcher <link people stefan-stremersch>Stefan Stremersch and co-authors <link people vardit-schwartz-landsman>Vardit Landsman and Sriram Venkataraman on this subject breaks new ground and offers important implications for pharmaceutical manufacturers.

In their study, the authors find that although the effect of requests on prescriptions is significantly positive, the mean effect of DTCA on patient requests is negative, yet very small.

Importantly, they find that the socio-demographic profile of the area in which a physician practices moderates not only the effects of DTCA on requests, but also requests for prescriptions. Specifically, drug requests by brand name in regions with higher percentages of blacks and Hispanics translate into fewer prescriptions of that brand than in regions with higher percentages of whites.

The paper will be of great interest to managers in pharmaceutical firms because while the industry has high expectations about the effectiveness of DTCA in increasing patient requests for their own brands, the researchers now show that this type of advertising may not always deliver on those expectations.