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dc.contributor.authorBrekke, Kurt R.en_US
dc.contributor.authorKuhn, Michaelen_US
dc.date.accessioned2009-01-28T15:54:04Z-
dc.date.available2009-01-28T15:54:04Z-
dc.date.issued2005en_US
dc.identifier.urihttp://hdl.handle.net/10419/18957-
dc.description.abstractWe study effects of direct-to-consumer advertising (DTCA) in the prescription drug market. There are two pharmaceutical firms providing horizontally differentiated (branded) drugs. Patients differ in their susceptibility to the drugs. If DTCA is allowed, this can be employed to induce (additional) patient visits. Physicians perfectly observe the patients' type (of illness), but rely on information to prescribe the correct drug. Drug information is conveyed by marketing (detailing), creating a captive and a selective segment of physicians. First, we show that detailing, DTCA and price (if not regulated) are complementary strategies for the firms. Thus, allowing DTCA induces more detailing and higher prices. Second, firms benefit from DTCA if detailing competition is not too fierce, which is true if investing in detailing is sufficiently costly. Otherwise, firms are better off with a ban on DTCA. Finally, DTCA tends to lower welfare if insurance is generous (low copayments) and/or price regulation is lenient. The desirability of DTCA also depends on whether or not the regulator is concerned with firms' profit.en_US
dc.language.isoengen_US
dc.publisheren_US
dc.relation.ispartofseriesCESifo working papers 1493en_US
dc.subject.jelI11en_US
dc.subject.jelM37en_US
dc.subject.jelL65en_US
dc.subject.jelL13en_US
dc.subject.ddc330en_US
dc.subject.keywordmarketingen_US
dc.subject.keywordpharmaceuticalsen_US
dc.subject.keywordoligopolyen_US
dc.subject.stwWerbungen_US
dc.subject.stwPharmazeutisches Produkten_US
dc.subject.stwOligopolen_US
dc.titleDirect to consumer advertising in pharmaceutical marketsen_US
dc.typeWorking Paperen_US
dc.identifier.ppn50046863Xen_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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