a study to explore scope of direct to consumer advertisement dtca

International Journal of Marketing and Human Resource Management (IJMHRM), ISSN 0976

– 6421 (Print), ISSN 0976 – 643X (Online), Volume 3, Issue 1, January-December (2012)

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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: [email protected]

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.

INTERNATIONAL JOURNAL OF MARKETING AND HUMAN

RESOURCE MANAGEMENT (IJMHRM) ISSN 0976 – 6421 (Print)

ISSN 0976 – 643X (Online)

Volume 3, Issue 1, January- December (2012), pp. 19-28

© IAEME: www.iaeme.com/ijmhrm.asp

Journal Impact Factor (2012): 1.5321 (Calculated by GISI)

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IJMHRM

© I A E M E



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2. REVIEW OF LITERATURE

Much of the research undertaken on said topic was particular to US economy but huge gap is yet to be fulfilled for the developing country like india. Gists of few of the noteworthy studies undertaken on the said topic are given below:

In 2004, Astra-Zeneca spent $216 million promoting Crestor, almost matching the $212 million spent on Pepsi for that year (Huh and Langteau, 2007). There is growing trend of spending on DTC advertising by pharmaceutical companies in US. According to Gagnon and Lexchin (2008) Pharmaceutical companies spend nearly twice as much on marketing in the U.S. as they do on research and development (R&D).

In another study taken by Sheehan (2007), Drug marketers have increased their spending on internet to promote their drugs. In 2003, the pharmaceutical industry spent $59 million on DTC promotion on the Internet (Choi and Lee, 2007). Searching for health-related information has become the third most common activity for online users (Choi and Lee, 2007). Advertising spending positively correlates with increases in the number of prescriptions written for DTC drugs (Spake and Joseph, 2007). A study reviewed by the GAO found a median increase in sales of more than $2 for every $1 spent on advertising (United States, 2006).

While the pharmaceutical industry is profiting from DTC advertising, it generates more money marketing to physicians. In 2005, compared with the $4.2 billion spent on DTC advertising, pharmaceutical companies spent $7.2 billion on promotion to physicians (United States, 2006). In addition, every dollar spent on physician-detailing generated sales worth approximately $1.72, except for the most aggressively marketed drugs, which generated sales of more than $10 (Healy, 2007).

According to Food and Drug Administration (FDA) DTC advertising is consistent with the whole trend toward consumer empowerment. They believe that there is certain public health benefits associated with letting people know what’s available. Federal Trade Commission and Department of Justice, DTC advertising increases consumer and physician awareness of the potential benefits of pharmaceuticals and helps close the information gaps among pharmaceutical manufacturers, doctors, and consumers.”

Hoffman and Wilkes (1999) express their views on basis of their experience in US that DTCA, unreasonably increases consumer expectations, forces doctors to spend time disabusing patients of misinformation, diminish the doctor-patient relationship because a doctor refuses to prescribe an advertised drug, or results in poor practice if the doctor capitulates and prescribes an inappropriate agent."

Further research is needed to know the clinical and economic impact of DTCA on healthcare systems. The benefits of DTCA (preventive care) must be balanced against increased health care costs caused by clinically inappropriate requests generated by DTCA

3. RESEARCH METHODLOGY

3.1. RESEARCH OBJECTIVES

� To explore the scope of DTCA (prescription drugs) in Indian pharmaceutical Industry.



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� To know Perception & knowledge of Indian consumers about prescription drugs advertising.

3.2. RESEARCH DESIGN

� Study is Exploratory in nature.

3.3. SAMPLE DESIGN

Sampling Population

� Marketers (executives of Pharmaceutical companies), Doctors and Consumers of Gujarat

Sampling Method � Judgment Sampling.

Sample Size – 150 � Customers (Patients)(50) � Marketing mangers and sales managers(50) � Doctors(50)

3.4. PRIMARY DATA COLLECTION

Primary Data is collected with the help of questionnaire which consist of structured and unstructured 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 physicians for preventive health care.

2.94 2.41 3.61

DTCA would result in increasing diagnoses of under-diagnosed conditions

2.76 2.94 3.29

DTCA would result in improving treatments of under treated conditions

2.88 2.47 3.81

1=strongly disagree; 5 =strongly agree From the above mean values we can say that most of the marketers & physicians disagreed that DTCA will help patients to give clinical benefits by making them more conscious for preventive health care and diagnosis of under-diagnosed condition. While consumers believe that DTCA helps them to provide knowledge about treatments, make them concerned about prescribing medication and results in diagnoses of under-diagnosed condition.



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Table 2: PSYCHO-SOCIAL ISSUES (Mean Values)

Psycho-Social Issues Marketers Physicians Endusers

Give patients confidence to talk to their doctors about their concerns

3.53 3.82 4

Promote unnecessary fear of the side effects 2.68 3.82 3.03

Exposure to personally relevant DTCA would encourage patients to disclose health concerns to their doctor

2.94 3.65 3.48

1=strongly disagree; 5 =strongly agree Most of the physicians, consumers & executives agreed that DTCA will give them psychological benefits & personally relevant DTCA would develop confidence and encourage consumers to disclose their health concerns to physicians. Physicians also agreed that DTCA would promote unnecessary fear of side effects in the mind of consumers, while executives and consumers disagreed that DTCA will promote unnecessary fear of side effects, but it helps them in providing useful information on the risks of prescription medication.

Table 3: EFFECT ON DOCTOR PATIENT RELATIONSHIP (Mean Values)

Effect on doctor-patient relationship Marketers Physicians Endusers

Promote unnecessary visits to doctors & cause patients to take up more of their doctors’ time

3 3.41 2.68

DTCA would enhance the doctor-patient relationship & communication

3.03 3.12 3.19

DTCA would damage the doctor-patient relationship

2.65 3.12 2.58

DTCA pressures physicians to use drugs; they might not ordinarily use

2.88 3.12 2.77

1=strongly disagree; 5 =strongly agree Consumers and executives disagreed that DTCA will not promote unnecessary visits to doctors and will not influence prescription behaviour of physicians. Rather it would help in enhancing doctor-patient relationship & communication. While according to physicians DTCA will promote unnecessary visits to them and might damage relationship with patients and 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 promoting newer, more expensive drugs.

3.03 3.94 3.52

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 without commensurate health gains such as unnecessary tests, referrals to specialists, self medication.

2.76 3.65 3.55

DTCA should not be allowed in India. 3.06 3.47 3.32

1=strongly disagree; 5 =strongly agree



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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 among pharmaceuticals companies, while executives disagreed that it will decreases the use of generic products. Physicians, Consumers & Executives all agreed that DTCA will contributes to rise health care costs without commensurate with health gains, which leads to increase in self-medication, more refers to specialist and frequent change in medication. So, with respect to pharmaceutical industry they all opined that DTCA should not be allowed in India.

Table 5: FACTORS OF DTCA

FACTORS THAT DRIVES

TOWARDS DTCA

DTCA FACTORS THAT DRIVES

AGAINST DTCA

� Preventive health care. � Diagnoses of under-diagnosed

conditions � Improving treatments � Give Psychological confidence � Encourage patients to disclose health

concerns � Enhance the doctor-patient

relationship & communication � Discourages the use of generic

products � Knowledge about risk (prescription

medications)

� Fear of the side effects � Promote unnecessary visits to doctors � Rising drug costs � Damage the doctor-patient

relationship � Influence prescription behaviour � Increase in self medication � Doubts regarding prescription

medications � Increase confusion and difficult to

understand

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 the output is given below.

FACTOR ANALYSIS

Table 6: KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .682

Bartlett's Test of Sphericity

Approx. Chi-Square 248.870

Df 78.000

Sig. .000



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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.



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Table 8: Total Variance Explained

Component

Initial Eigen values Extraction Sums of Squared Loadings

Rotation Sums of Squared Loadings

Total % of Variance

Cumulative %

Total % of Variance

Cumulative %

Total % of Variance

Cumulative %

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



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Interpretation of Factorial analysis Here 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 compress above given 16 factors to four major factors. Among these four factors two are driving towards DTCA while other two drives against DTCA.

Table 10: RESULT OF FACTOR ANALYSIS

FACTORS THAT DRIVES TOWARDS DTCA

DTCA FACTORS THAT DRIVES AGAINST DTCA

� Health consciousness for treatment of under-diagnosed conditions.

� Psychological confidence which leads to improving treatments.

� Rising drug costs and self medication. � Increase confusion and fear of side

effects.

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 -.785

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.



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CONCLUSION

On the basis of data collected to know consumer perception, knowledge and behaviour about DTCA of prescription drug, we came to conclusion that there are certain benefits and harm associated with DTCA. Key benefits of DTCA are preventive care for under diagnosed conditions and patient’s psychological confidence for improving treatments which must be balanced against adverse factors like self medication, rising drug costs, confusion and fear of side effects. From the study we can say that it will still take five to six years down the line for an innovative concept like DTCA (prescription drugs) to be accepted in Indian market.

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a study to explore scope of direct to consumer advertisement dtca

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