The Effects of Pharmaceutical Marketing and Promotion on Adverse Drug Events and Regulation / Guy David, Sara Markowitz, Seth Richards.

Format:

Book

Author/Creator:

David, Guy.

Contributor:

National Bureau of Economic Research.

Markowitz, Sara.

Richards, Seth.

Series:

Working Paper Series (National Bureau of Economic Research) no. w14634.

NBER working paper series no. w14634

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2009.

Summary:

This paper analyzes the relationship between postmarketing promotional activity and reporting of adverse drug events by modeling the interaction between a welfare maximizing regulator (the FDA) and a profit maximizing firm. In our analysis demand is sensitive to both promotion and regulatory interventions. Promotion-driven market expansions enhance profitability yet may involve the risk that the drug would be prescribed inappropriately, leading to adverse regulatory actions against the firm. The model exposes the effects of the current regulatory system on consumer and producer welfare. Particularly, the emphasis on safety over benefits distorts the market allocation of drugs away from some of the most appropriate users. We then empirically test the relationship between drug promotion and reporting of adverse reactions using an innovative combination of commercial data on pharmaceutical promotion and FDA data on regulatory interventions and adverse drug reactions. We provide some evidence that increased levels of promotion and advertising lead to increased reporting of adverse medical events for certain conditions.

Notes:

Print version record

January 2009.