The Effects of Pharmaceutical Marketing and Promotion on Adverse Drug Events and Regulation

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Health Care Management Papers
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Health and Medical Administration
Pharmacy Administration, Policy and Regulation
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David, Guy
Markowitz, Sara
Richards-shubik, Seth
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This paper analyzes the relationship between postmarketing promotional activity and reporting of adverse drug reactions (ADRs) by modeling the interaction between a regulator (the FDA) and a pharmaceutical firm. Promotion-driven market expansions enhance profitability yet may involve the risk of inappropriate drug prescriptions, leading to regulatory actions against the firm. We empirically test the relationship between drug promotion and reporting of ADRs using an innovative combination of commercial data on pharmaceutical promotion and FDA data on regulatory interventions and ADRs. We provide some evidence that increased levels of promotion and advertising lead to increased reporting of ADRs for certain conditions.

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2010-11-01
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Amrican Economic Journal: Economic Policy
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