In the United States, at least 92% of older adults suffer from at least one chronic condition, and 77% have at least two. Individuals are increasingly expected to take control of chronic condition management by integrating the optimal mix of prescription drugs, outpatient utilization, and health-related behaviors, like diet, exercise, and over the counter drugs. Additionally, individuals with chronic illness are increasingly turning to alternative methods of managing their health, such as dietary supplements (vitamins, minerals, herbal products, etc.), with 75% of those 55 and older taking at least one dietary supplement on a daily basis. Greater consumer control in decision-making relies on consumers being informed about the costs and efficacy of various health inputs, and in this environment direct to consumer advertising (DTCA) plays a vital role. U.S. consumers are being exposed to unprecedented high levels of DTCA. Prescription drug DTCA reached $5.63 billion in 2015, and $850 million was spent on dietary supplement DTCA in that year. Our prior work and the work of others shows that the increase in DTCA is an important factor contributing to rising utilization rates of prescription drugs and dietary supplements. While the direct effects of DTCA are well established, less is known about how this market-driven information (advertising) affects the totality of an individual's allocation towards all health care inputs. On one hand, DTCA might promote a culture of health and increase the likelihood of drug adherence, diet, or exercise. On the other hand, DTCA might promote potentially dangerous substitutions, with consumers being persuaded that drugs and dietary supplements can cure all disease without complementary life-style behaviors. We propose to study 1) how increased exposure to prescription drug DTCA affects spillovers in the formal healthcare setting (outpatient use); 2) how exposure to dietary supplement DTCA affects spillovers in the formal healthcare setting; 3) how exposure to prescription drug DTCA impacts health-related behaviors (e.g. diet and exercise); and 4) how exposure to dietary supplement DTCA impacts health-related behaviors. We will examine these questions through case study conditions that are highly prevalent in United States, including cardiovascular disease, diabetes, depression, and osteoarthritis. We will use comprehensive data on advertising and health care utilization from Nielsen, Ingenix, Kantar Media, and Simmons. We will exploit natural experiments (introduction of Medicare Part D and differences across advertising boundaries) and carefully control for ad targeting in order to produce causal estimates. Only two countries in the world allow for DTCA (the U.S. and New Zealand). This study can produce critical new information about the direct and indirect effects of DTCA on health and health care spending, which will allow for policymakers to better understand both the benefits and costs associated with DTCA.
This research will examine the effects of direct-to-consumer advertising (DTCA) of pharmaceuticals and dietary supplements on prescription drug use, physician office visits, and health related behaviors such as exercise and diet. We will examine these questions through case study conditions that are highly prevalent in the United States, including cardiovascular disease, diabetes, depression, and osteoarthritis. This study will inform policymakers, clinicians, and patients about the effects of DTCA on health and health care spending, which will allow for a more comprehensive accounting of the costs and benefits of DTCA.
