Thursday, June 07, 2007

Villanova Scientists Prove that DTC Spending Does Not Impact Rx Prices

According to Jim Edwards at BrandweekNRX, "The boffins in the business school at Villanova University are touting a formidable study with this headline: DTC advertising has no effect on the price of drugs" (see post).

Here's the elegant proof cited in the report, which you can download here:

"where it q is the quantity sold for brand i in time t (in 000s), it p is the price of brand i at time t (in dollars per unit), the lower case advertising variables represent the flow or current period advertising (in $000’s), the upper case advertising variables represent the current stock of advertising up to time t (in $000’s), it Exper is the number of months that drug i was on the market prior to time t , and it cp is a weighted average of competitors’ prices at time t . We take logs of both price and quantity so that 1 β represents the price..."

And so on. I think you get the drift.

Order your T-shirt today. Only $99.95 in the U.S. ($6.95 elsewhere in the world):


  1. Anonymous7:09 AM

    I think I will keep quiet that I am a Villanova Grad!!

  2. Occam's Pendulum9:55 AM

    Clearly, Capella and Villanova are in the pocket of big Pharma! ;-)

    Bravo on the sliding scale price for the t-shirt. Very clever.

  3. I have my new calling: DTC shirt importer! Just a simple study to demonstrate safety is all I'll need.

  4. Mario Cavallini10:25 AM

    Too late. Thailand has announced an economics t-shirt health emergency and is making their own at $0.49 per.


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