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Public Policy Issues in Direct-to-Consumer Advertising of Prescription Drugs

John E. Calfee
Journal of Public Policy & Marketing
Vol. 21, No. 2 (Fall, 2002), pp. 174-193
Stable URL: http://www.jstor.org/stable/30000725
Page Count: 20
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Public Policy Issues in Direct-to-Consumer Advertising of Prescription Drugs
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Abstract

In August 1997, the Food and Drug Administration (FDA) announced a reinterpretation of its rules on direct-to-consumer (DTC) advertising, the effect of which was to permit branded broadcast advertisements and therefore to increase the volume of DTC advertising several-fold. A substantial body of research, consisting primarily of consumer surveys, provides the basis for a preliminary assessment of the effects of DTC advertisements. The FDA's own assessment, that DTC advertisements can provide substantial benefits and do not appear to cause substantial harm, is consistent with survey and other data. Direct-to-consumer advertisements appear to provide valuable information (including risk information); induce information-seeking (mainly from physicians); prompt patients to discuss conditions not previously discussed; and generate significant, positive externalities including the possibility of improved patient compliance with drug therapy. The effects of DTC advertisements on drug consumption and on health care have yet to be assessed. The author suggests that a further relaxation of FDA rules would accelerate the dissemination of valuable information, with favorable consequences for drug development and consumer health.

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