Evaluating the Welfare Effects of Drug Advertising: Consumer Behavior Indicates Broadcast Drug Ads Have Positive Health Benefits

By Bradford, W. David; Kleit, Andrew N. | Regulation, Spring 2006 | Go to article overview

Evaluating the Welfare Effects of Drug Advertising: Consumer Behavior Indicates Broadcast Drug Ads Have Positive Health Benefits


Bradford, W. David, Kleit, Andrew N., Regulation


IN AUGUST OF 1997, THE FOOD AND DRUG Administration changed the rules for the broadcast of direct-to-consumer advertising (DCA) of prescription drugs. There is a clear divide in public policy circles over the consequence of this change. Many groups assert that DCA puts physicians under pressure to prescribe drugs unnecessarily. Other groups argue that DCA can inform people about conditions they might not know they have or about treatments they might not know exist--effects that would improve health outcomes. Obviously, it is important to evaluate the claims of each group in order to implement effective policy.

At this writing, the FDA is conducting a review of its DCA policy. Unfortunately, there is little relevant research for the agency to draw upon. In particular, there is relatively little DCA research that has been done on what we believe could best inform FDA policy: analysis of detailed, patient-level clinical data that track changes in actual behavior.

In this article, we will review the history of direct-to-consumer drug advertising and the theoretical arguments for and against it. We will also critique DCA research that focuses on survey results and advertising content analysis. We will then present a review of our own research. Our research, we believe, is precisely the sort that is required: evaluations of detailed, patient-level information, using cases that allow us to say something directly about the effect of DCA on patient well-being.

DCA OVERVIEW

For most of the world, DCA for prescription drugs is a non-issue. Both the European Union and Canada, for example, officially prohibit the practice. Only New Zealand and the United States sanction DCA. The market for DCA is most advanced in the United States, where such promotion has been used, at least in some part, for over 30 years.

As the practice grew in the United States, the FDA requested a voluntary moratorium on drug ads in 1982 until it could issue guidelines. Those guidelines were released in 1985, and simply asserted that pharmaceuticals should adhere to the same rules that govern drug advertising to physicians. That meant that the ads must include the product generic name, a brief list of side effects and contra-indications, the ads must relate only material facts, and they must not he false or misleading.

In practice, drug makers and the FDA interpreted the regulations to also hold that broadcast ads could not mention both the name of the product and its clinical benefits in the same ad. For example, an early television advertisement for Claritin gave the name of the product but did not inform consumers that it is a non-drowsy treatment for hay fever.

The prohibition on offering a drug's brand name and clinical benefits in the same ad ended in August of 1997 when the FDA issued new guidelines with respect to broadcast DCA. Since that time, DCA on television and radio has been permitted to reveal both the name of the product and its clinical benefit, as long as "adequate provision" is made to fully inform the consumer of side effects and contra-indications via a toll-free telephone number, Web address, or reference to a complete print advertisement.

Figure 1 shows the trend in mass-media DCA spending since 1989. Interestingly, the figure shows that the rise in DCA began before the August 1997 regulatory change. This suggests that the FDA decision to ease its regulations should be understood as a reaction to a change in DCA behavior rather than the sole cause of the change.

[FIGURE 1 OMITTED]

One phenomenon that is hidden in the series is the sharp increase since 1995 in the proportion of DCA that is targeted at television as compared to radio and print media. In 1994, for example, television ads accounted for only 13.5 percent of all DCA promotion; by 2000 that proportion had risen to 63.8 percent.

ECONOMIC ARGUMENTS

The beginnings of the current policy debate on DCA may date to the 1985 New England Journal of Medicine article "Matching Prescription Drugs and Consumers" by Alison Masson and Paul Rubin.

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