How Direct-to-Consumer Advertising for Prescription Drugs Affects Consumers’ Welfare: A Natural Experiment Tests the Impact of FDA Legislation

In August 1997, the U.S. Food and Drug Administration (FDA) allowed brand-specific advertising on television.

How Direct-to-Consumer Advertising for Prescription Drugs Affects Consumers' Welfare: A Natural Experiment Tests the Impact of FDA Legislation

Prokriti Mukherji

School of Management and Business, King's College London

Ramkumar Janakiraman

Darla Moore School of Business, University of South Carolina

Shantanu Dutta

Marshall School of Business, University of Southern California

Surendra Rajiv

NUS Business School, National University of Singapore

MANAGEMENT SLANT

  • Consumer welfare appears to increase as a result of the U.S. Food and Drug Administration's (FDA's) relaxation of the direct-to-consumer advertising (DTCA) rule.
  • DTCA has a significant impact on both overall category sales and individual drug choice....

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