FDA Proposed Study - Effect of Coupons

Experimental Study of the Impact of Coupons Embedded in Direct-to-Consumer Prescription Drug Print Advertisements on Consumer Perceptions of Product Risks and Benefits FDA recognizes that the manufacturers, packers, and distributors (sponsors) of prescription human and animal drugs, including biological products for humans, have a First Amendment right to engage in the truthful and non-misleading advertising of their products. An advertisement is misleading, however, if it fails to disclose certain information about the advertised product's uses and risks. Thus, for prescription drugs and biologics, the act requires advertisements to contain ``information in brief summary relating to side effects, contraindications, and effectiveness'' (21 U.S.C. 352(n)). FDA is responsible for enforcing the act and implementing regulations. FDA regulations require that prescription drug advertisements that make claims about a product must also include risk information in a ``balanced'' manner (21 CFR 202.1(e)(5)(ii)), both in terms of the content and presentation of the information. Advertisements that draw attention to the name of the product but do not make representations about the product's indication(s) or dosage recommendations are called reminder advertisements. As a general matter, reminder ads may mention the proprietary and established name of the product and (optionally) contain information about the product's ingredients, dosage form, quantity, price, and manufacturer (21 CFR 202.1(e)(2)(i)). Other written, printed, or graphic information is not prohibited in reminder ads as long as that information does not make a representation or suggestion relating to the product beyond those permitted. Reminder ads allow sponsors to distribute price sheets, pens, notepads and other minor giveaways featuring the name of the drug product to physicians and other healthcare professionals without requiring a full disclosure of the product's risks. As DTC promotion has increased, sponsors have chosen to create reminder ads for consumers. On November 1 and 2, 2005, the agency held a part 15 public hearing (70 FR 54054, September 13, 2005) on the topic of direct-to-consumer advertising of prescription drugs and restricted medical devices. During the hearing, the agency received several comments in connection with the potential impact of coupons and other price incentives on consumer perceptions of DTC-advertised products. Sponsors may use ads as a vehicle to offer price incentives to consumers (e.g., ``free trial,'' ``buy six get one free''). Coupon promotions are widely used in many product categories and have been the topic of many academic studies. Certain types of coupons, most notably those that appear in the body of an advertisement itself (i.e., are embedded in the advertisement), can positively affect perceptions of the brand. People tend to rate owned objects more favorably than those they do not own, even when those objects have been assigned to them at random. This has been termed the ``mere ownership'' or ``mere possession'' effect. An interesting extension of this effect is provided in research by Sen and Johnson which has shown that consumers rate a product more favorably when they are simply given a gift certificate or a coupon for that product or service. Other research has examined the effect of warranties. People who viewed an ad with a high warranty perceived the product as being less risky compared to people who saw an ad with a medium or low warranty. Based on this body of consumer research, the inclusion of a coupon or other price incentive in the body of a DTC ad may affect consumers' perceptions of the risks and benefits of the prescription drug. For instance, consumers may assign more weight to benefit claims in cases where a coupon or other price incentive is embedded in the advertisement. For ``simple'' consumer products, coupons and free trial offers may enable the customer to test new products while minimizing their financial risk of testing the product. For products that consumers can readily test and ones where performance can be adequately verified (termed ``search'' goods by economists), coupons and free trial offers provide both the consumer and manufacturer an efficient mechanism for matching consumers and products. For more complex products such as prescription drugs where supervision of a physician is required to evaluate both appropriateness and performance, coupons and free trial offers may send different signals. The proposed exploratory study will examine what impact, if any, the presence of coupons in DTC advertisements may have on consumers' perceptions of product risks and benefits and the overall impression of the product in DTC full-product and reminder advertisements.