Disclosing Drug Prices

There has been a study that suggests disclosing the drug prices might not cut our costs anyway.  Robert Preidt of HealthDay Reporter gave further information on this issue in his latest article.

The Trump administration has made a plan to make all drug companies disclose the cost of their medicines in all TV ads, but this is unlikely to help keep these drug prices down, according to the new study.  They did find that revealing the cost of those expensive drugs in their ads would significantly lower the patient demand, but there was a modifier included, such as an explanation that the drug would be low-cost or free with insurance coverage or other discounts.

Absent anything else, the price disclosure works, according to study co-author Bill Tayler, a professor of accounting at Brigham Young University in Salt Lake City.  But in a world where pharmaceutical companies behave logically they will definitely use a modifier of sorts to unwind the benefit of this legislation.

About 580 people were in the study who were told to imagine they had been diagnosed with type 2 diabetes and then were shown one of five ads for a fictional diabetes prescription drug.  One ad did not disclose the price and the other four mentioned either a low or a high price per month.  Two of their ads said that eligible patients may be able to get the drug for free because of insurance coverage or coupon availability.

Those who saw the ad with the high-price that had no modifier were much less likely to say they’d ask about the drug, ask the insurance provider about it, research the drug online or even take the drug.  Those seeing the ads with high prices and modifying language were still interested in the drug.

Study co-author Ge Bai, an associate professor of accounting at Johns Hopkins University said that the price disclosure in the drug ads work only under the “tell the price, only the price, nothing but the price” scenario.

Of course the proposal set forth to include these prices in all drug ads is being opposed by the pharmaceutical industry.  Tayler believes the suggested policy is unlikely to do any harm, but is also unlikely to help much in controlling the pharmaceutical prices.  This route could be very costly in terms of lawsuits that are going to result and definitely not the most effective way to go.  There seems no way to fight this legal battle since it’s not going to work anyway.

The study can be found in JAMA Internal Medicine.

Dr Fredda Branyon