Examination of the relationship between direct-to-consumer advertising expenditure and price

Objective: Examine the relationship between direct-to-consumer advertising (DTCA) expenditure and prescription drug price from 1997 to 2000 for the top 20 advertised drugs of 1998. Method: The 20 prescription drugs were selected based on the DTCA expenditure for 1998 as published in Med AD News. Drug prices were determined using the average wholesale price. Trend graphs were plotted between DTCA expenditure and unit price. The correlation coefficient was calculated between percent change in DTCA expenditure and unit price between 1998 and 2000. Results: There was a negative nonsignificant correlation between the percent change in DTCA expenditure and unit price between 1998 and 2000. All drugs had an increase in price but only half of the drugs showed an increase in percent change in DTCA expenditure whereas, the other half had a decrease in DTCA expenditure. Conclusion: Even though every year the industry spends millions of dollars on DTCA of prescription drugs we cannot conclude that it influences drug prices.