Disclosing Drug Prices in Advertising

By February 1, 2019 Commentary

People are trying to figure out ways to impact drug pricing short of outright regulation.  One idea was to sensitize consumers to prices by mandating inclusion in any advertising.  A research letter in the Journal of the American Medical Association Internal Medicine explores what effect this might have.   (JAMA Article)  CMS has proposed that drug companies must disclose pricing in any television advertising.  The researchers recruited 580 subjects through an Amazon job board.  People were told to assume they had recently been diagnosed with Type 2 diabetes.  They were then shown a made-up ad for a made-up diabetes drug.  There were 5 versions of the ad; one made no mention of price and the other four did give a price, ranging from $50 per month to $15,500 per month.  Two of the ads were modified with statements saying that consumers could get the drug for as little as zero per month, which is how drug companies would promote copay assistance programs.  After looking at the ad, consumers were asked about the likelihood they would ask their physician or insure about getting it, would do online research about it or would use it.  They were also asked about what they expected the out-of-pocket cost to be and how effective they thought the medication would be.  When the drug was described as low-cost, behavior in terms of asking an insurer or a physician about it, researching it or using it, was unchanged from seeing the ad with no price information.  But for high-cost drugs, seeing the cost did cause a fairly significant drop in any of these behaviors.  Adding the modifier about the actual cost to the consumer, however, resulted in consumers being more willing to consider the high-price drug.  There was no change in expectations of effectiveness between low-cost and high-cost drugs.  The research, while methodologically less than optimal (you couldn’t use real patients with a disease and real drugs?), suggests that being aware of price, both in a total sense and the portion likely to be borne by the consumer, can have an impact on behavior.

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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