Persuasion or Information? The Economics of Prescription Drug Advertising

THIS PAPER ANALYZES A MARKET CHARACTERIZED BY VERY LARGE PROMOTIONAL EXPENDITURES -- THE MARKET FOR PRESCRIPTION DRUGS. GOVERNMENT INVESTIGATIONS OF THE PHARMACEUTICAL INDUSTRY STRESS THAT INTENSIVE ADVERTISING OF DRUGS RESULTS IN EXCESSIVE USE OF HIGH-PRICED PRODUCTS EVEN THOUGH LOWER PRICED ONES A...

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Bibliographic Details
Published in:The Journal of law & economics 1981-04, Vol.24 (1), p.45-74
Main Author: Leffler, Keith B.
Format: Article
Language:English
Subjects:
ADVERTISING
Advertising expenditures
Advertising rates
Advertising restrictions
Advertising to sales ratios
Capital costs
Consumer advertising
DRUGS
Medical treatment
Pharmaceutical industry
Pharmaceutical preparations
Physicians
Prescription drugs
Prescriptions
PUBLIC INTEREST
PUBLIC POLICY
REGULATION & REGULATORY POLICY
USAGE OF INFORMATION
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Summary:THIS PAPER ANALYZES A MARKET CHARACTERIZED BY VERY LARGE PROMOTIONAL EXPENDITURES -- THE MARKET FOR PRESCRIPTION DRUGS. GOVERNMENT INVESTIGATIONS OF THE PHARMACEUTICAL INDUSTRY STRESS THAT INTENSIVE ADVERTISING OF DRUGS RESULTS IN EXCESSIVE USE OF HIGH-PRICED PRODUCTS EVEN THOUGH LOWER PRICED ONES ARE AVAILABLE. HOWEVER, PRODUCT PROMOTION HAS HAS A POSITIVE EFFECT ON ENTRY OF SUPERIOR NEW DRUGS.
ISSN:0022-2186
1537-5285
DOI:10.1086/466973