Because of arms length relationship with patients, pharmaceutical manufacturers have paid much attention to DTC’s ability to impact compliance. Contrary to many industry surveys, this paper finds that the impact of compliance is small in economic terms, it spills over to other brands and, in certain instances, it may decrease average compliance rates. ∗This paper appeared as part of my Spring 2...

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It is nearly impossible today to turn on the television or read a magazine without seeing an advertisement for a prescription medication. CBS HealthWatch reported in 1998 that 66% of consumers in the United States had seen a particular product advertised in print, while 61% had seen one promoted on television.1 Spending on direct-toconsumer advertisements increased 212% between 1995 and 1996, r...