An Assessment of Direct-to-Consumer Advertising of Prescription Drugs

Resident Scholar John E. Calfee
Resident Scholar John
E. Calfee

Advertising is widely seen by economists and regulators as beneficial to markets and consumers.[1] The prescription drug market offers exceptional opportunities[2,3] for direct-to-consumer advertising (DTCA) to provide new-product information, improve compliance, alleviate widespread underdiagnosis and undertreatment,[4] and motivate new-product development.[5] DTCA can also induce excess or even dangerous prescribing, however, partly because patients are poorly informed and usually pay far less than the full cost of drugs. Empirical research can help resolve these issues.

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John E. Calfee is a resident scholar at AEI.

About the Author

 

John E.
Calfee
  • Economist John E. Calfee (1941-2011) studied the pharmaceutical industry and the Food and Drug Administration (FDA), along with the economics of tobacco, tort liability, and patents. He previously worked at the Federal Trade Commission's Bureau of Economics. He had also taught marketing and consumer behavior at the business schools of the University of Maryland at College Park and Boston University. While Mr. Calfee's writings are mostly on pharmaceutical markets and FDA regulation, his academic articles and opinion pieces covered a variety of topics, from patent law and tort liability to advertising and consumer information. His books include Prices, Markets, and the Pharmaceutical Revolution (AEI Press, 2000) and Biotechnology and the Patent System (AEI Press, 2007). Mr. Calfee wrote regularly for AEI's Health Policy Outlook series. He testified before Congress and federal agencies on various topics, including alcohol advertising; biodefense vaccine research; international drug prices; and FDA oversight of drug safety.

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