The relationship between competitive pricing and direct-to-consumer advertising: How to manage DTC advertising of Rx drugs in an integrated marketing mix strategy

The oligopolistic nature of the U.S. pharmaceutical industry presents its members with a unique opportunity to leverage the interaction between competitive pricing strategy and promotion strategy.


  • Direct-to-consumer advertising tends to be effective in stimulating drug-category sales in pharmaceutical markets, where leader–follower pricing behavior exists.
  • Under certain conditions, an integrated advertising and pricing strategy can be profitable for all companies in a market. The strategy involves category-expanding advertising by a company, combined with a competitive pricing strategy.

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