A study to explore scope of direct to consumer advertisement dtca


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A study to explore scope of direct to consumer advertisement dtca

  1. 1. INTERNATIONAL JOURNAL OF MARKETING AND HUMAN International Journal of Marketing and Human Resource Management (IJMHRM), ISSN 0976 – 6421 (Print), ISSN 0976 – 643X (Online), Volume 3, Issue 1, January-December (2012) RESOURCE MANAGEMENT (IJMHRM)ISSN 0976 – 6421 (Print)ISSN 0976 – 643X (Online) IJMHRMVolume 3, Issue 1, January- December (2012), pp. 19-28© IAEME: www.iaeme.com/ijmhrm.asp ©IAEMEJournal Impact Factor (2012): 1.5321 (Calculated by GISI)www.jifactor.com A STUDY TO EXPLORE SCOPE OF DIRECT TO CONSUMER ADVERTISEMENT (DTCA) OF PRESCRIPTION DRUGS IN INDIA Mr. Chintan H Rajani, Assistant Professor School of Management RK University Email: chintan.rajani@rku.ac.in ABSTRACT Direct to Consumer Advertisement (DTCA) is an innovative practice of promoting prescription drugs through popular media, which is currently allowed only in US & New Zealand. In India we are already exposed to television advertisements of many OTC drugs like contraceptive pills, inhalers in bronchial asthma, insulin for diabetes mellitus, etc. Main objective of this study is to explore scope of direct to consumer advertising of prescription drugs in Indian market. Research study is exploratory in nature and helps in tracing knowledge, perceptions, and responsiveness of consumers, doctors & marketers towards direct-to-consumer advertising of prescription medicines. Factorial analysis is used to draw conclusion and to know about factors which drive towards and against DTCA in India. Keywords: Direct to consumer advertisement (DTCA), prescription drugs 1. INTRODUCTION Pharmaceutical companies used to spend heavily on promotion of their drugs or medicines. All advertisement is inherently unethical, that’s how things got sold. Selling drugs is like selling things or commodities. Marketing team of pharmaceutical companies has come up with ever innovative tool of marketing drugs through DTC advertisement. DTCA is abbreviated for direct to consumer advertisement of prescription drugs. In 1997, the US Food and Drug Administration (FDA) allowed pharmaceutical companies to advertise their drugs through mass media like print ads, TV commercials, radio and internet. United States and New Zealand are only two developed countries to allow DTCA. According to pharma marketing news, global spending on DTCA were roughly $ 4.30 billions in 2010 as compared to $2.82 billions decade ago i.e. in 2001. In India we are already exposed to television and print ads for inhalers, contraceptive pills, insulin for diabetes mellitus and other OTC drugs. This all are scaled down version of DTC advertisement. Since its introduction we have mixed response on DTC advertisement by different experts, communities and countries. A study was undertaken to explore the scope of DTC in India. 19
  2. 2. International Journal of Marketing and Human Resource Management (IJMHRM), ISSN 0976– 6421 (Print), ISSN 0976 – 643X (Online), Volume 3, Issue 1, January-December (2012) 2. REVIEW OF LITERATUREMuch of the research undertaken on said topic was particular to US economy but huge gap isyet to be fulfilled for the developing country like india. Gists of few of the noteworthy studiesundertaken on the said topic are given below:In 2004, Astra-Zeneca spent $216 million promoting Crestor, almost matching the $212million spent on Pepsi for that year (Huh and Langteau, 2007). There is growing trend ofspending on DTC advertising by pharmaceutical companies in US. According to Gagnon andLexchin (2008) Pharmaceutical companies spend nearly twice as much on marketing in theU.S. as they do on research and development (R&D).In another study taken by Sheehan (2007), Drug marketers have increased their spending oninternet to promote their drugs. In 2003, the pharmaceutical industry spent $59 million onDTC promotion on the Internet (Choi and Lee, 2007). Searching for health-relatedinformation has become the third most common activity for online users (Choi and Lee,2007). Advertising spending positively correlates with increases in the number ofprescriptions written for DTC drugs (Spake and Joseph, 2007). A study reviewed by the GAOfound a median increase in sales of more than $2 for every $1 spent on advertising (UnitedStates, 2006).While the pharmaceutical industry is profiting from DTC advertising, it generates moremoney marketing to physicians. In 2005, compared with the $4.2 billion spent on DTCadvertising, pharmaceutical companies spent $7.2 billion on promotion to physicians (UnitedStates, 2006). In addition, every dollar spent on physician-detailing generated sales worthapproximately $1.72, except for the most aggressively marketed drugs, which generated salesof more than $10 (Healy, 2007).According to Food and Drug Administration (FDA) DTC advertising is consistent with thewhole trend toward consumer empowerment. They believe that there is certain public healthbenefits associated with letting people know what’s available.Federal Trade Commission and Department of Justice, DTC advertising increases consumerand physician awareness of the potential benefits of pharmaceuticals and helps close theinformation gaps among pharmaceutical manufacturers, doctors, and consumers.”Hoffman and Wilkes (1999) express their views on basis of their experience in US thatDTCA, unreasonably increases consumer expectations, forces doctors to spend timedisabusing patients of misinformation, diminish the doctor-patient relationship because adoctor refuses to prescribe an advertised drug, or results in poor practice if the doctorcapitulates and prescribes an inappropriate agent."Further research is needed to know the clinical and economic impact of DTCA on healthcaresystems. The benefits of DTCA (preventive care) must be balanced against increased healthcare costs caused by clinically inappropriate requests generated by DTCA3. RESEARCH METHODLOGY3.1. RESEARCH OBJECTIVES To explore the scope of DTCA (prescription drugs) in Indian pharmaceutical Industry. 20
  3. 3. International Journal of Marketing and Human Resource Management (IJMHRM), ISSN 0976– 6421 (Print), ISSN 0976 – 643X (Online), Volume 3, Issue 1, January-December (2012) To know Perception & knowledge of Indian consumers about prescription drugs advertising.3.2. RESEARCH DESIGN Study is Exploratory in nature.3.3. SAMPLE DESIGNSampling Population Marketers (executives of Pharmaceutical companies), Doctors and Consumers of GujaratSampling Method Judgment Sampling.Sample Size – 150 Customers (Patients)(50) Marketing mangers and sales managers(50) Doctors(50)3.4. PRIMARY DATA COLLECTIONPrimary Data is collected with the help of questionnaire which consist of structured andunstructured open ended questions.3.5. LIMITATIONS Study is restricted to Gujarat state only. Unable to collect information from the respondents of rural areas due to time constraint Due to limited pharmaceutical companies within Gujarat, got less number of marketing professional as respondents as compared to sales managers. Samples were drawn from Rajkot & Ahmedabad.DATA ANALYSIS & INTERPRETATION Table 1: CLINICAL ISSUES (Mean Values) Clinical Issues Marketers Physicians Endusers DTCA would encourage patients to attend 2.94 2.41 3.61 physicians for preventive health care. DTCA would result in increasing diagnoses 2.76 2.94 3.29 of under-diagnosed conditions DTCA would result in improving treatments 2.88 2.47 3.81 of under treated conditions 1=strongly disagree; 5 =strongly agreeFrom the above mean values we can say that most of the marketers & physicians disagreedthat DTCA will help patients to give clinical benefits by making them more conscious forpreventive health care and diagnosis of under-diagnosed condition. While consumers believethat DTCA helps them to provide knowledge about treatments, make them concerned aboutprescribing medication and results in diagnoses of under-diagnosed condition. 21
  4. 4. International Journal of Marketing and Human Resource Management (IJMHRM), ISSN 0976– 6421 (Print), ISSN 0976 – 643X (Online), Volume 3, Issue 1, January-December (2012) Table 2: PSYCHO-SOCIAL ISSUES (Mean Values) Psycho-Social Issues Marketers Physicians Endusers Give patients confidence to talk to their 3.53 3.82 4 doctors about their concerns Promote unnecessary fear of the side effects 2.68 3.82 3.03 Exposure to personally relevant DTCA 2.94 3.65 3.48 would encourage patients to disclose health concerns to their doctor 1=strongly disagree; 5 =strongly agreeMost of the physicians, consumers & executives agreed that DTCA will give thempsychological benefits & personally relevant DTCA would develop confidence andencourage consumers to disclose their health concerns to physicians. Physicians also agreedthat DTCA would promote unnecessary fear of side effects in the mind of consumers, whileexecutives and consumers disagreed that DTCA will promote unnecessary fear of sideeffects, but it helps them in providing useful information on the risks of prescriptionmedication. Table 3: EFFECT ON DOCTOR PATIENT RELATIONSHIP (Mean Values) Effect on doctor-patient relationship Marketers Physicians Endusers Promote unnecessary visits to doctors & cause 3 3.41 2.68 patients to take up more of their doctors’ time DTCA would enhance the doctor-patient 3.03 3.12 3.19 relationship & communication DTCA would damage the doctor-patient 2.65 3.12 2.58 relationship DTCA pressures physicians to use drugs; they 2.88 3.12 2.77 might not ordinarily use 1=strongly disagree; 5 =strongly agreeConsumers and executives disagreed that DTCA will not promote unnecessary visits todoctors and will not influence prescription behaviour of physicians. Rather it would help inenhancing doctor-patient relationship & communication. While according to physiciansDTCA will promote unnecessary visits to them and might damage relationship with patientsand also it will affect their prescription behaviour. Table 4: EFFECT ON HEALTH CARE SYSTEM (Mean Values) Effect on health care system Marketers Physicians Endusers DTCA contributes to rising drug costs, by 3.03 3.94 3.52 promoting newer, more expensive drugs. DTCA discourages the use of generic products 2.59 3.47 2.92 DTCA promotes healthy competition among 2.97 3.88 3.87 DTCA contributes to rising health care costs 2.76 3.65 3.55 without commensurate health gains such as unnecessary tests, referrals to specialists, self medication. DTCA should not be allowed in India. 3.06 3.47 3.32 1=strongly disagree; 5 =strongly agree 22
  5. 5. International Journal of Marketing and Human Resource Management (IJMHRM), ISSN 0976– 6421 (Print), ISSN 0976 – 643X (Online), Volume 3, Issue 1, January-December (2012)Most of the physicians and consumers believe that DTCA would give rise to drug cost,discourages to use of generic products and promotes the healthy competition amongpharmaceuticals companies, while executives disagreed that it will decreases the use ofgeneric products. Physicians, Consumers & Executives all agreed that DTCA will contributesto rise health care costs without commensurate with health gains, which leads to increase inself-medication, more refers to specialist and frequent change in medication. So, with respectto pharmaceutical industry they all opined that DTCA should not be allowed in India. Table 5: FACTORS OF DTCAFACTORS THAT DRIVES DTCA FACTORS THAT DRIVESTOWARDS DTCA AGAINST DTCA Preventive health care. Fear of the side effects Diagnoses of under-diagnosed Promote unnecessary visits to doctors conditions Rising drug costs Improving treatments Damage the doctor-patient Give Psychological confidence relationship Encourage patients to disclose health Influence prescription behaviour concerns Increase in self medication Enhance the doctor-patient Doubts regarding prescription relationship & communication medications Discourages the use of generic Increase confusion and difficult to products understand Knowledge about risk (prescription medications)To reduce the number of factors which drives towards and against DTCA, we have done“FACTORIAL ANALYSIS” with the help of SPSS software (SPSS 16 version). And theoutput is given below.FACTOR ANALYSIS Table 6: KMO and Bartletts Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .682 Bartletts Test of Approx. Chi-Square 248.870 Sphericity Df 78.000 Sig. .000 23
  6. 6. International Journal of Marketing and Human Resource Management (IJMHRM), ISSN 0976– 6421 (Print), ISSN 0976 – 643X (Online), Volume 3, Issue 1, January-December (2012) Table 7: Commonalities Initial Extraction @_Preventive_health_care 1.000 .659 @_Diagnoses_of_underdiagnosed_conditions 1.000 .466 @_Improving_treatments_ 1.000 .630 @_Give_Psychological_confidence_ 1.000 .657 @_Fear_of_the_side_effects 1.000 .512 @_Encourage_patients_to_disclose_health_concerns_ 1.000 .439 @_Promote_unnecessary_visits_to_doctors___ 1.000 .581 @_Enhance_the_doctorpatient_relationship__communication 1.000 .684 @_Damage_the_doctorpatient_relationship 1.000 .556 @_Influence_prescription_behaviour 1.000 .656 @_Rising_drug_costs 1.000 .651 @_Increase_in_self_medication 1.000 .640 @_Increase_confusion_and_difficult_to_understand 1.000 .748 Extraction Method: Principal Component Analysis. 24
  7. 7. International Journal of Marketing and Human Resource Management (IJMHRM), ISSN 0976– 6421 (Print), ISSN 0976 – 643X (Online), Volume 3, Issue 1, January-December (2012) Table 8: Total Variance Explained Extraction Sums of Rotation Sums of Initial Eigen values Com Squared Loadings Squared Loadings pone % of % of Cumul nt % of Cumulat Cumulat Total Total Varian Total Varianc ative Variance ive % ive % ce e % 1 3.070 23.616 23.616 3.070 23.616 23.616 2.959 22.758 22.758 2 2.345 18.039 41.656 2.345 18.039 41.656 1.991 15.317 38.075 3 1.366 10.507 52.163 1.366 10.507 52.163 1.567 12.054 50.129 4 1.098 8.446 60.609 1.098 8.446 60.609 1.362 10.480 60.609 5 .944 7.259 67.868 6 .784 6.032 73.900 7 .673 5.179 79.079 8 .658 5.058 84.137 9 .539 4.143 88.280 10 .458 3.519 91.799 11 .409 3.144 94.944 12 .380 2.920 97.864 13 .278 2.136 100.000 Extraction Method: Principal Component Analysis Figure 1: Scree Plot 25
  8. 8. International Journal of Marketing and Human Resource Management (IJMHRM), ISSN 0976– 6421 (Print), ISSN 0976 – 643X (Online), Volume 3, Issue 1, January-December (2012) Table 9: Rotated Component Matrix Component 1 2 3 4@_Preventive_health_care .757 -.040 -.284 .058@_Diagnoses_of_underdiagnosed_conditions .662 .091 -.110 -.086@_Improving_treatments_ .768 -.169 .065 .080@_Give_Psychological_confidence_ .793 .143 -.044 -.078@_Fear_of_the_side_effects .161 .368 .171 .567@_Encourage_patients_to_disclose_health_concerns_ .654 .053 .066 .060@_Promote_unnecessary_visits_to_doctors___ .230 .605 .128 .382@_Enhance_the_doctorpatient_relationship__ .299 .116 -.733 .208@_Damage_the_doctorpatient_relationship -.140 .419 .596 -.068@_Influence_prescription_behaviour .220 .116 .653 .410@_Rising_drug_costs -.020 .791 -.106 .116@_Increase_in_self_medication -.023 .763 .188 -.151@_Increase_confusion_and_difficult_to_understand .250 .132 .228 -.785Extraction Method: Principal Component Analysis.Rotation Method: Varimax with Kaiser Normalization.Interpretation of Factorial analysisHere result of KMO test is 0.680 and four factors detects 60.609% of effect on the variables.So, there is a high degree of communalities among the variables. Hence we can compressabove given 16 factors to four major factors. Among these four factors two are drivingtowards DTCA while other two drives against DTCA. Table 10: RESULT OF FACTOR ANALYSISFACTORS THAT DRIVES DTCA FACTORS THAT DRIVESTOWARDS DTCA AGAINST DTCA Health consciousness for treatment of Rising drug costs and self medication. under-diagnosed conditions. Increase confusion and fear of side Psychological confidence which leads effects. to improving treatments. 26
  9. 9. International Journal of Marketing and Human Resource Management (IJMHRM), ISSN 0976– 6421 (Print), ISSN 0976 – 643X (Online), Volume 3, Issue 1, January-December (2012)CONCLUSIONOn the basis of data collected to know consumer perception, knowledge and behaviour aboutDTCA of prescription drug, we came to conclusion that there are certain benefits and harmassociated with DTCA. Key benefits of DTCA are preventive care for under diagnosedconditions and patient’s psychological confidence for improving treatments which must bebalanced against adverse factors like self medication, rising drug costs, confusion and fear ofside effects. From the study we can say that it will still take five to six years down the line foran innovative concept like DTCA (prescription drugs) to be accepted in Indian market.BIBLIOGRAPHYAlmasi, E.A., Stafford, R.S., Kravitz, R.L., Mansfield, P.R. 2006. “What Are the PublicHealth Effects of Direct-to-Consumer Advertising? PLoS Med. 3(3):e145.Bradford, WD, A Kleit, P Nietert, T Steyer, and S Ornstein (2006), “Effects of Direct-to-Consumer Advertising of Hydroxymethylglutaryl Coenzyme A Reductase Inhibitors onAttainment of LDL-C Goals ”, Clinical Therapeutics, 28(12):2105-2118.Calfee, J, C Winston, R Stempski (2002), “Direct to Consumer Advertising and CholesterolLowering Drugs ”, Journal of Law and Economics,45(2):673-690.Dave, D, and H Saffer (2010), “The Impact of Direct-to-Consumer Advertising onPharmaceutical Prices and Demand ”, NBER Working Paper 15969.David, G, S Markowitz, and S Richards (2009), “The Effects of Pharmaceutical Marketingand Promotion on Adverse Drug Events and Regulation ”, NBER Working Paper 14634.Deborah F. Spake and Mathew Joseph. “Consumer opinion and effectiveness of direct-to-consumer advertising”, Journal of Consumer Marketing, Vol. 24, No. 5, 2007, pp. 283-292.Frosch, DL, PM Krueger, RC Hornik, PF Cronholm, and FK Barg (2007), “Creating Demandfor Prescription Drugs: A Content Analysis of Television Direct-to-Consumer Advertising ”,Annals of Family Medicine, 5(1):6-13.Frosch, D..L, Grande, D., Tarn, D.M., Kravitz, R.L. 2010. “A Decade of Controversy:Balancing Policy with Evidence in the Regulation of Prescription Drug Advertising.”American Journal of Public Health. 100(1):24–32.Foucault, Michel. 1963. The Birth of the Clinic: An Archaeology of Medical Perception.New York: Vintage Books.Greg Finlayson and Ross Mullner(2005), “Direct-to-consumer advertising of prescriptiondrugs: Help or hindrance to the publics health?”, Journal of Consumer Marketing, Vol. 22,No. 7, 2005, pp. 429-431.Iizuka, T, and GZ Jin (2005), “The Effect of Prescription Drug Advertising on Doctor Visits”, Journal of Economics and Management Strategy, 14(3):701-727.Kravitz, RL, RM Epstein, MD Feldman, CE Franz, R Azari, MS Wilkes, L Hinton, P Franks(2005),“Influence of patients’ requests for direct-to-consumer advertised antidepressants: a 27
  10. 10. International Journal of Marketing and Human Resource Management (IJMHRM), ISSN 0976– 6421 (Print), ISSN 0976 – 643X (Online), Volume 3, Issue 1, January-December (2012)randomized controlled trial ”, Journal of the American Medical Association, 293(16):1995-2002. Erratum in: JAMA 294 (19), 2436.Rosenthal, M, E Berndt, J Donohue, A Epstein, R Frank (2003), “Demand Effects of RecentChanges in Prescription Drug Promotion”, in DM Cutler and AM Garber (eds.), Frontiers inHealth Policy Research, Volume 6 , MIT Press.Sejung Marina Choi and Wei-Na Lee(2007), “Understanding the impact of direct-to-consumer (DTC) pharmaceutical advertising on patient-physician interactions: Adding theweb to the mix”, Journal of Advertising, Vol. 36, No. 3, Fal 2007, pp. 137-149Shaw, A (2008), “Direct-to-Consumer Advertising of Pharmaceuticals”, ProQuest DiscoveryGuides, March. 28