Prescription Prices and Direct to Consumer Advertising

描述（由申请人提供）：本提案中概述的实证工作旨在估计处方药直接面向消费者（DTC）广告对处方药价格的影响。1997年，联邦贸易委员会放宽了DTC广告的管理规定，这导致了DTC广告的大幅增加。最近，DTC广告已经成为一个有争议的全国性问题。对DTC广告的任何评估都应该考虑到对消费者的收益和成本的估计。对消费者的好处是健康信息。消费者的成本是更高的药品价格。然而，没有实证估计增加的DTC广告对处方药价格的影响。本提案的主要目的是通过估计药品价格和支出增加的比例可归因于增加的广告来了解DTC广告的成本。广告可以包含在处方药的需求中，因为它可以增加消费的边际效用。广告也可以通过转移需求或降低需求的价格弹性来提高价格。如果广告区分了产品，减少了替代品的存在感，那么需求对价格的反应就会减弱。根据勒纳法则，在其他条件不变的情况下，更无弹性的需求曲线将导致更高的价格。该数据集每月将所有可用药物分为四类：1)关节炎，2)高胆固醇，3)溃疡和4)失眠。之所以选择这些治疗类别，是因为它们包括一种或多种DTCA含量相对较高的药物和其他DTCA含量很少或没有的药物。评估将分别针对每个治疗类别进行。将收集两个价格变量和电视、广播和杂志的广告数据。促销支出和销售之间的内生性是一个值得关注的问题。估计一致性效应的主要方法将利用由FDA政策变化引起的DTCA的外源性变化。这个自然实验类似于对不同时间和不同类别药物的其他控制进行前后比较。由于公司可以在两种制度下观察到，一种是DTCA受限制的，另一种是不受限制的，这允许一组具有较低DTCA的药物与一组具有较高DTCA的药物在治疗类中随着时间的推移进行外源性比较。将模拟DTCA对药品价格和广告药品销售增加的影响。这将在每个治疗班进行。将模拟三种备选的DTCA场景。

DESCRIPTION (Provided by applicant): The empirical work outlined in this proposal is designed to estimate the effects of direct to consumer (DTC) advertising of prescription drugs on the price of prescription drugs. In 1997, the Federal Trade Commission relaxed the rules governing DTC advertising, which resulted in a substantial increase in DTC advertising. Recently, DTC advertising has become a controversial national issue. Any evaluation of DTC advertising should take into account estimates of both its benefits and its costs to consumers. The benefits to consumers are health information. The costs to consumers are higher drug prices. However, there are no empirical estimates of the effect of the increased DTC advertising on prescription drug prices. The primary purpose of this proposal is to inform on the cost of DTC advertising by estimating what fraction of the increase in drug prices and spending can be attributed to the increased advertising. Advertising can be included in the demand for prescription drugs since it can increase the marginal utility of consumption. Advertising can also increase price by shifting demand or by decreasing the price elasticity of demand. If advertising differentiates the product and reduces the perception that substitutes are available, then demand becomes less price responsive. According to the Lerner rule, a more inelastic demand curve will result in a higher price, ceteris paribus. The data set will a monthly pool of all the available drugs in four therapeutic classes: 1) arthritis, 2) high cholesterol, 3) ulcers and 4) insomnia. These therapeutic classes were chosen since they include one or more drugs with relatively high levels of DTCA spending and other drugs with little or no DTCA. The estimation will be done separately for each therapeutic class. Two price variables and advertising data from television, radio and magazines will be collected. Endogeneity between promotional expenditures and sales is a concern. The primary approach to estimating consistent effects will make use of the exogenous shift in DTCA resulting from the FDA's policy change. This natural experiment is akin to a pre-post comparison conditioning on various other controls over time and across drugs in each class. Since the firm can be observed in two regimes, one where DTCA is restricted and one where it is not, this allows an exogenous comparison of a group of drugs with lower DTCA with a group of drugs with higher DTCA within a therapeutic class over time. A simulation of the effect of DTCA on drug prices and on increased sales of advertised drugs will be performed. This will be carried out for each therapeutic class. Three alternative DTCA scenarios will be simulated.