US consumers believe that if medicines are cheap they must be "more vital," and that prices of lifesaving medicines are based on need and not profit, a new study finds.Consumers also often assume their risk of getting a serious illness is higher when the medicine is less expensive, and they are also more likely to plan to get the treatment if it is cheap, says the study, conducted by researchers at the WP Carey School of Business at Arizona State University.
"We find that people have a fundamental belief that everyone should have access to lifesaving care such as vaccines, doctor's visits, screening tests like mammograms and cancer treatments," says Adriana Samper, an assistant professor at the School.
"Nobody wants anyone to die because they didn't have the resources to cover the treatment. Therefore, they believe that communal pricing based on need, rather than the normal market pricing for other goods, applies in these situations. They expect medicine for a serious illness to be inexpensive," adds Ms Samper, who co-authored the study with Janet Schwartz, an assistant professor at Tulane University. Their study is reported in the Journal of Consumer Research.
In a series of experiments, the researchers demonstrated several significant points about drug pricing, which held true even if the treatments were to be paid for by insurers rather than consumers. In the first experiment, participants in an online study were asked to evaluate 10 products and services based on whether they were priced for "communal" purposes or market value. They ranked vaccines, doctor's visits and drugs used to treat serious illnesses as being driven by communal pricing, while items like tax-preparation services, restaurant menu items and home electronics were ranked as market-driven.
In another experiment, online participants were asked about a fictitious cream described as either preventing skin cancer or preventing age spots. The cream was offered at a low price of $25 or a high price of $250. The study showed that price had no effect on attitudes towards the cosmetic cream, but when the skin cancer treatment was only $25, respondents believed they needed it more - that they were at higher risk for the disease."We see the same thing for a flu shot - people are more concerned about getting the disease and addressing prevention if the vaccine is cheaper," says Ms Samper, adding: "that's an important note for health officials during our especially tough flu season right now."
A third experiment showed participants an ad for the same cream, with the same image but slightly different versions of text, again reflecting whether the cream was for skin cancer prevention or cosmetic purposes. The two different price points were offered in each case.
The researchers found that consumers were much more likely to keep reading the ad and that they planned to pursue the treatment in the case where the cream was for skin cancer and the price was lower, even when insurance was going to pay for the cream at either price.
"This implies a possible problem with the recent push for price transparency," comments Ms Samper. "In some cases, high prices may signal lower self-risk, and people may not think it's important to get needed treatments just because the cost is high."
In the final experiment, the researchers tested the effects of different types of messages meant to encourage people to get flu shots. They used the two prices again and also varied whether the consequences of getting flu were described as self-focused - such as missing work or paying medical bills as a result of succumbing to flu, or societally-focussed - such as making other people ill or hurting economic activity as a result of spreading the flu.
Very clearly, the individuals again increased their assumption of risk and intentions to get the vaccine in response to lower price, but only when the message focused on personal consequences of the flu.
Public health officials need to take note of this - ads emphasising the protection of other people do not appear to convince people to get vaccinated, says Ms Samper. “People respond best to messages that emphasise how illness will personally affect them," she concludes.