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Is the Pharmaceutical Industry an Ideal Context for Research? A Curation on Pharmaceutical Marketing and Agenda for Future Research

Is the Pharmaceutical Industry an Ideal Context for Research? A Curation on Pharmaceutical Marketing and Agenda for Future Research

Courtney Droms Hatch

Pharmaceuticals have the potential to cure or alleviate symptoms of many diseases, and they provide a great example of innovations in the marketplace. As such, the pharmaceutical industry is important to understand and provides an ideal context to test critical marketing theories. However, the industry also garners much attention for its advertising and promotional practices, as well as its product development and commercialization processes, from both regulatory agencies and consumer advocates. Since 1997, when the Food and Drug Administration (FDA) loosened its regulatory standards and allowed direct-to-consumer advertising (DTCA) of pharmaceutical products (FDA 1999), the industry spends billions of dollars each year to promote products and services. The most recent estimate by Statista of DTCA spending for 2018 was $6.46 billion (Guttmann 2020).

When we look back at prior research in the Journal of Public Policy & Marketing on pharmaceutical marketing, a few major themes emerge. First, we see a set of articles examining the pharmaceuticals that are available over the counter. Specifically, this mode of medication availability is examined in terms of the effects of switching a drug status from prescription to over the counter (Hoy 1994) as well as the naive beliefs that can lead to taking too much of an active ingredient in multiple over-the-counter medications (Catlin, Pechmann, and Brass 2015). Second, we see a wide array of research into DTCA (Calfee 2002; King, Koppenhafer, and Madrigal 2021; Sheehan 2005) and the effects of these efforts on decision making (Donohue and Berndt 2004) as well as the violations of FDA policies and violative warnings from the FDA and the Federal Trade Commission (FTC) (Avery et al. 2013; Hoy and Park 2014; Sheehan 2003). In addition, research has examined the effects of DTCA on pharmaceutical pricing levels (Capella et al. 2009). Third, we one article examines an area that seems ripe for research: the consumer information and decision-making implications of other sorts of promotional efforts, such as pharmaceutical product placement (Ta and Frosch 2008). Finally, we see an analysis of pharmaceutical compliance and decision making from the perspectives of two demographic segments: the information-seeking tendencies of the elderly (Morris, Tabak, and Olins 1992) and the compliance with labeling guidelines of young people (Ellen, Bone, and Stuart 1998).

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The articles chosen for this curation are timely and relevant and address a variety of strategic marketing decisions made by pharmaceutical companies employing a combination of methodological approaches. Each article was considered and included on the basis of the interesting findings in the original work as well as the potential to spur future research questions that would be suitable for the special issue of the Journal of Public Policy & Marketing on Pharmaceuticals, Marketing, and Society.

Articles in Curation

Look, Puppies! A Visual Content Analysis of Required Risk Statements Embedded in Direct-to-Consumer Pharmaceutical Advertising
Jesse King, Leslie Koppenhafer, and Robert Madrigal

Direct-to-consumer advertising (DTCA) on television is a prominent source of information about medical conditions and their potential treatments. In the United States, the Food and Drug Administration (FDA) requires that DTCA include a major statement presenting the medication’s most important risk information in a fair and balanced manner. However, there is growing concern about the visual content that accompanies this risk information within DTCA major statements. Specifically, the FDA has failed to provide guidance on how to measure DTCA’s adherence to the fair and balanced provision. This research introduces eight metrics organized into three categories to perform a visual content analysis of 230 existing DTCAs. Using these metrics, the authors test for differences in visual content between the major risk statement and the remaining portions of an ad. Our results indicate that the major risk statements of DTCAs feature more positive imagery, visually complex imagery, and motion than other portions of the ads. The authors discuss the implications of these findings for public policy makers, consumers, and marketers.

Dangerous Double Dosing: How Naive Beliefs Can Contribute to Unintentional Overdose with Over-the-Counter Drugs
Jesse R. Catlin, Cornelia (Connie) Pechmann, and Eric P. Brass

In a series of studies, consumers reviewed over-the-counter (OTC) drug packages and evaluated these drugs for concurrent use. The authors investigate whether the consumers utilized the active ingredients listed on the package and recognized the risks of double dosing when using two drugs with the same active ingredient. Both novice and expert consumers used the active ingredients to assess drug similarity, indicating that the information was accessible. However, only medically trained experts used this information to assess the risks of taking two drugs concurrently, indicating that they understood its diagnosticity or relevancy. Novices’ failure to view double dosing as risky suggests that they might hold a naive belief that OTC drugs are relatively risk free; thus, the authors test interventions to increase active ingredient diagnosticity versus accessibility. One intervention considered by OTC drug manufacturers makes active ingredients more accessible on packages using icons. However, the authors found this approach alone to be ineffective, whereas interventions enhancing the diagnosticity of ingredients through public service messages or package warnings yielded promising results. Thus, interventions may benefit by going beyond accessibility to also highlight active ingredient diagnosticity.

Principles in Action: An Examination of Food and Drug Administration Letters Involving Violative Internet Promotions from 1997 to 2012
Mariea Grubbs Hoy and Jin Seong Park

Given the increasing importance of the Internet as a platform for pharmaceutical marketing, drug companies have called for guidance from the Food and Drug Administration (FDA). Of key concern is how marketers can fulfill the fair balance requirement within the space constraints of most social media platforms. The agency directs marketers to its administrative letters for clarity but has made no comprehensive assessment to articulate the guidance these letters offer, especially regarding areas in which the Internet differs from traditional media. This study offers such an assessment by examining all letters addressing violative Internet promotions from 1997 to 2012. The authors identify eight “principles in action,” including insight into the so-called one-click rule. These principles reveal how the FDA’s thinking on online promotion has evolved since the 1997 draft guidance for broadcast direct-to-consumer advertising for prescription drugs and can complement the agency’s first guidance regarding interactive promotion, released in 2014. The authors also identify areas the FDA has not addressed and offer suggestions.

Raising Red Flags: The Change in Deceptive Advertising of Weight Loss Products After the Federal Trade Commission’s 2003 Red Flag Initiative
Rosemary J. Avery, John H. Cawley, Matthew Eisenberg, and Jonathan Cantor

This study investigates whether the Federal Trade Commission’s Red Flag initiative (2003), which asked the media to voluntarily cease running ads for over-the-counter weight loss products that contained facially false statements, reduced deception in such ads. Strengths of the study include a large sample of ads in both magazines and on television; an extended postguideline period; and examination of a wide variety of statements, including those that are clearly false, those that are potentially deceptive, and warnings. The results indicate that (1) the Federal Trade Commission’s Red Flag initiative is associated with a significant reduction in almost all false and potentially misleading statements, (2) the reduction in deception was greater for ads on television than those in magazines, and (3) a significant number of ads in the postguideline period continued to include false and potentially misleading statements. There is suggestive evidence of offsetting behavior; specifically, at the time that false statements were becoming less common, potentially misleading statements became more common. The author conclude by exploring implications for regulatory policy.

Do Pharmaceutical Marketing Activities Raise Prices? Evidence from Five Major Therapeutic Classes
Michael L. Capella, Charles R. Taylor, Randall C. Campbell, and Lance S. Longwell

The impact of direct-to-consumer (DTC) advertising of prescription drugs on consumers has become the focus of considerable debate. Given rising health care costs, the question whether DTC advertising and other forms of promotion increase the price of prescription drugs is particularly important. This study uses data on name brand drugs in five major therapy classes marketed in the United States during 2001–2005 to test the effect of DTC advertising and other promotional variables on the price elasticity of demand. The predictions of two competing theories on the economic effects of advertising are used as a basis for forming the hypotheses. The data indicate that, in general, there is not a significant relationship between DTC advertising and price elasticity in these five categories. Given the inverse relationship between elasticity of demand and price, the findings do not support the position that consumers pay higher prices as a result of DTC advertising in the pharmaceutical industry.

Potential Directions for Future Research

In combining the recently published articles in the Journal of Public Policy & Marketing with emerging trends in the pharmaceutical industry, there are an array of directions in which to pursue future research. Specifically, as discussed by Hoy and Park (2014), if we examine the impact of new technology on the pharmaceutical industry, pharmaceutical marketers and public policy researchers would be well served by undertaking projects examining patient and physician experiences with new technology. For example, reviewing research recently published in the Journal of Consumer Research, we see a patient resistance to medical artificial intelligence used for diagnoses and an impact of this technology on medical provider evaluations (Longoni, Bonezzi, and Morewedge 2019). Pharmaceutical marketers and public policy researchers might examine whether this resistance carries over to compliance with medical advice given during telehealth appointments and adherence to directions for pharmaceutical products prescribed during these appointments.

Furthermore, given the rise in new media types and new promotional tools in the pharmaceutical industry, it would be beneficial for pharmaceutical marketers and public policy researchers to understand how patients and physicians understand and interpret promotional messages on these new media channels. For example, a few pharmaceutical companies have launched podcasts in the last several years (e.g. Eli Lilly’s Elixir Factor, Pfizer’s The Antigen, and Johnson & Johnson’s See You Now) and with the current COVID-19 pandemic, these podcasts have gained a larger audience. Public policy makers at the FDA and FTC might be interested in understanding more about how these podcasts and digital marketing communications are used to share information about new pharmaceutical products with both physicians and patients.

In addition to the expansion of new media channels during the COVID-19 pandemic, another issue that is taking center stage is vaccine hesitancy, which refers to the spectrum of vaccine delays and refusals despite the availability of vaccinations. Prior research in medical and health journals indicates that vaccine hesitancy is complex and content specific and can vary across time, place, and specific vaccine (MacDonald 2015). Future research is needed to investigate the drivers of vaccine hesitancy such as the impact of media sources, publicity, and specifics of the vaccine approval process for specific vaccinations. For example, as discussed in prior research (De Figueiredo et al. 2020), opportunities exist for future research on international differences in vaccine hesitancy and ways that pharmaceutical marketers can reduce the barriers to vaccine uptake. Moreover, given that the COVID-19 vaccinations currently available have been approved by the FDA in the United States through the Emergency Use Authorization (EUA) process, there have been conflicting reports about adoption rates of the new vaccinations as a result of vaccine hesitancy. These EUAs are only used under extraordinary circumstances, and as a result, individuals (regardless of their level of health literacy) don’t often understand what sorts of data and research have to be conducted prior to the EUA, which could cause an increase in vaccine hesitancy rates, especially in low-health-literacy individuals. Thus, the effects of an EUA on vaccine hesitancy and vaccine adoption should be examined in future research projects.  

Finally, with current economic conditions in mind, future research is needed to examine the effects of strategic marketing decisions on the pricing of pharmaceutical products as discussed by Capella et al. (2009). To complement their discussion, policy makers and consumer researchers might take a closer look at the patent protections that pharmaceutical companies enjoy and the impact of those on pricing, as well as the strategies patients are employing to deal with rising drug prices and the impacts of these strategies on their long-term health and well-being. Specifically, we have seen news reports of individuals rationing medications, importing medications, or postponing or delaying doses of their medications as ways of responding to the high prices of medications. The impact of the mental load and stress of these strategies on long-term health and well-being deserves a closer look by consumer and policy researchers as well as the pharmaceutical companies themselves. 

References

Avery, Rosemary J., John H. Cawley, Matthew Eisenberg, and Jonathan Cantor (2013), “Raising Red Flags: The Change in Deceptive Advertising of Weight Loss Products After the Federal Trade Commission’s 2003 Red Flag Initiative,” Journal of Public Policy & Marketing, 32 (1), 129–39.

Calfee, John E. (2002), “Public Policy Issues in Direct-to-Consumer Advertising of Prescription Drugs,” Journal of Public Policy & Marketing, 21 (2), 174–93.

Capella, Michael L., Charles R. Taylor, Randall C. Campbell, and Lance S. Longwell (2009), “Do Pharmaceutical Marketing Activities Raise Prices? Evidence from Five Major Therapeutic Classes,” Journal of Public Policy & Marketing, 28 (2),  146–61.

Catlin, Jesse R., Cornelia (Connie) Pechmann, and Eric P. Brass (2015), “Dangerous Double Dosing: How Naive Beliefs Can Contribute to Unintentional Overdose with Over-the-Counter Drugs,” Journal of Public Policy & Marketing, 34 (2), 194–209.

De Figueiredo, Alexandre, Clarissa Simas, Emilie Karafillakis, Pauline Paterson, and Heidi J. Larson (2020), “ Mapping Global Trends in Vaccine Confidence and Investigating Barriers to Vaccine Uptake: A Large-Scale Retrespective Temporal Modelling Study,” The Lancet, 396, 898–908.

Donohue, Julie M. and Ernst R. Berndt (2004), “Effects of Direct-to-Consumer Advertising on Medication Choice: The Case of Antidepressants,” Journal of Public Policy & Marketing, 23 (2), 115–27.

Ellen, Pam Scholder, Paula Fitzgerald Bone, and Elnora W. Stuart (1998), “How Well Do Young People Follow the Label? An Investigation of Four Classes of Over-the-Counter Drugs,” Journal of Public Policy & Marketing, 17 (1), 70–85.

FDA (1999), “Guidance for Industry: Consumer Directed Broadcast Advertisements,” FDA-1997-D-0048 (accessed March 31, 2021), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/consumer-directed-broadcast-advertisements.

Guttman, A. (2020), “Pharma DTC Ad Spend in the US, 2012-2019,” Statista (accessed March 31, 2021), https://www.statista.com/statistics/686906/pharma-ad-spend-usa/#:~:text=It%20was%20calculated%20that%20in,amounted%20to%206.46%20billion%20dollars.

Hoy, Mariea Grubbs (1994), “Switch Drugs Vis-à-Vis Rx and OTC: Policy, Marketing, and Research Considerations,” Journal of Public Policy & Marketing, 13 (1), 85–96.

Hoy, Mariea Grubbs and Jin Seong Park (2014), “Principles in Action: An Examination of Food and Drug Administration Letters Involving Violative Internet Promotions from 1997 to 2012,” Journal of Public Policy & Marketing, 33 (2), 127–42.

King, Jesse, Leslie Koppenhafer, and Robert Madrigal (2021), “Look, Puppies! A Visual Content Analysis of Required Risk Statements Embedded in Direct-to-Consumer Pharmaceutical Advertising,” Journal of Public Policy & Marketing, 40 (1), 45–61.

Longoni, Chiara, Andrea Bonezzi, and Carey K. Morewedge (2019), “Resistance to Medical Artificial Intelligence,” Journal of Consumer Research, 46 (4), 629–50.

MacDonald, Noni E. (2015), “Vaccine Hesitancy: Definition, Scope, and Determinants,” Vaccine, 33, 4161–64.

Morris, Louis A., Ellen R. Tabak, and Nancy J. Olins (1992), “A Segmentation Analysis of Prescription Drug Information-Seeking Motives Among the Elderly,” Journal of Public Policy & Marketing, 11 (2), 115–25.

Sheehan, Kim Bartel (2005), “In Poor Health: An Assessment of Privacy Policies at Direct-to-Consumer Web Sites,” Journal of Public Policy & Marketing, 24 (2), 273–83.

Sheehan, Kim Bartel (2003), “Balancing Acts: An Analysis of Food and Drug Administration Letters About Direct-to-Consumer Advertising Violations,” Journal of Public Policy & Marketing, 22 (2), 159–69.

Ta, Sony and Dominick L. Frosch (2008), “Pharmaceutical Product Placement: Simply Script or Prescription for Trouble?” Journal of Public Policy & Marketing, 27 (1), 98–106.

Courtney Droms Hatch is Associate Professor of Marketing, Lacy School of Business, Butler University.