Should product-specific advertisement be regulated in pharmaceutical markets?

Arbeitspapier

This paper examines the optimal content regulation of DTCA by comparing two forms of DTCA-product-specific and category-specific-and identifies a key tradeoff which underlies this policy debate. Our analysis suggests that the optimal form of DTCA depends crucially on the cost effectiveness of DTCA and the market-size distortion induced by DTCA. When the cost of advertisement is high, there often exists a Pareto-improving policy choice: category-specific DTCA is preferred when the marketsize distortion is more severe while produce DTCA is preferred when it is less so. As the cost decreases, however, a conflict emerges between pharmaceutical firms and patients: firms are worse off under product-specific DTCA while patients are better off. We also find that the physician's reluctance to persuade misinformed patients can actually alleviate the market-size distortion and hence be welfare-enhancing.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ISER Discussion Paper ; No. 1182

Classification and Topics

• Classification: Wirtschaft ; Advertising ; Analysis of Health Care Markets ; Health: Government Policy; Regulation; Public Health
• Subject: category-specific DTCA ; product-specific DTCA ; advertisement regulation ; prescriptiondecision ; pharmaceutical market

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ishida, Junichiro ; Takahara, Tsuyoshi
• Event: Veröffentlichung
• (who): Osaka University, Institute of Social and Economic Research (ISER)
• (where): Osaka
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/267794
• Last update: 10.03.2025, 11:41 AM CET