When the Trump administration released its blueprint for lowering drug prices a couple months ago, it floated a trial balloon: What if we required manufacturers to include drug prices in direct-to-consumer advertising?
It’s unclear if the intent of doing that is to make prices more transparent to consumers, to “shame” manufacturers into lowering prices, to discourage spending on direct-to-consumer advertising, or all of the above.
A recently released Kaiser Health Tracking Poll explored what the American public thought of the idea. Not surprisingly, 76 percent were in favor of it, which nearly matched the percentage of Americans from a March Kaiser poll who said drug prices are too high.
It’s a great populist idea, but would it really help consumers or drive down pricing? No, on both fronts, and here’s why.
Once that price flashes up on the screen, how is a consumer going to make use of it? Drug prices vary considerably from one disease or treatment category to another, and often even within a category. Consumers will see a single price in a 30- or 60-second ad, but won’t know what other medicines in the category cost. Assuming they remember the ad and then go research other prices in the category, how will they determine the relative value of a treatment, and whether it’s the right one for them? And if they see several ads in an evening for different conditions — say one for anxiety and another for cancer — they’ll see wildly different prices, maybe by orders of magnitude. Rather than add clarity, these variances will only increase confusion.
Selecting a treatment for a disease isn’t like choosing a car. When car companies show the manufacturer’s suggested retail price in ads, consumers generally know where that brand of car fits in the hierarchy of luxury to economy cars and where it stands in the spectrum of quality and reliability. They know what features they’re looking for. They’re told what rebates and financing deals are available. They can figure out what it will cost them, and they know they can go out and buy it without restriction.
But consumers don’t have unrestricted access to advertised prescription medications. They need a doctor to prescribe a treatment, based on their specific medical history and condition. Their insurer has to cover it — or they have to be prepared to pay out of pocket for it. The price they’ll actually pay will vary too, depending on their health plan and even their location. An ad won’t give them any of that. Instead, it will give them just a price which, for most people, won’t be anything like what they’ll actually pay for the medication.
Let’s also consider the possibility that some consumers might not be turned off by seeing a high price associated with a medication in an ad. On the contrary, it may drive demand because, for many people, more expensive means better.
Say you’re a cancer patient or caregiver and you see an ad about someone with cancer like yours who is getting better thanks to a new breakthrough drug. You’ll likely take note of the brand and go talk to your doctor. If you happen to see a $200,000 price tag at the end of the ad, you’re probably not going to say, “Never mind, this drug’s too expensive for me.” You’ll more than likely start researching how to get access to it through your health plan or an assistance program.
And then there’s the blah, blah, blah effect. As it is, we tend to tune out the latter part of direct-to-consumer ads, when the voice-over speeds us through a litany of warnings. Adding a drug price might initially grab some attention. But as consumers learn that the advertised price has seemingly little or no connection to what they pay, they’ll likely start to tune it out just as most of us tune out the warnings.
If the Trump administration really wants to make an impact on drug pricing, flashing a price tag in an ad isn’t the way to go.
Craig Martin, a global principal with Ogilvy Consulting, specializes in the life sciences, biotech, health technology, health care, wellness, and pharmaceutical sectors. The opinions expressed here are his alone.