The Placebo Price Effect

On my way home from work, I heard this story on Marketplace explaining a new drug placebo study done recently. From the story:

Participants thought they were testing a new drug for pain relief. In fact, everybody got placebos. Only one difference. Some were told the pills cost $2.50, while others were told they only cost a dime. Dan Ariely, author of “Predictably Irrational,” was the lead researcher.

DAN ARIELY: What we found was that the expensive pill reduced pain to a much larger degree than the cheap pills.

This could be significant for the $59 billion generic drug industry. The study helps explain why patients generally prefer brand-name drugs, and why consumers think they are more effective than generic drugs, even though they have the same active ingredients. Glen Melnick is a health economics professor at USC.

Unfortunately, in my opinion, this did not lead to a discussion of how the public should be better educated about how medicines actually work. Instead, and this is probably what made it really stand out to the Marketplace team, the conclusion was this:

Ariely suggests that the FDA reconsider the way it evaluates drugs. Instead of testing medicines blindly. He says the FDA should include factors like price, since such variables may play a part in how well some drugs work.

I’m really not sure what to think about this. There are numerous factors at play here, of course, such as how screwed up our healthcare industry is, how screwed up the drug industry is, and how strange people are in how their minds can influence their bodies, but is trying to get the FDA to count the price of a drug in its healing potential really the right thing to be calling for?

-posted by Dana


5 Responses to The Placebo Price Effect

  1. Sonetka says:

    Damn, they got it exactly backwards. Wouldn’t people be better served by DE-emphasizing the importance of price rather than saying “By the way, these pills are twenty dollars apiece, so you should be up and about in no time!”

    The study itself doesn’t surprise me – we have an ingrained tendency to think that more expensive = better. Often it’s true, even if not as much as manufacturers would like us to think – still, the super-expensive baby sleeper is probably going to wear a lot better than the one you got for $4.99 at Smith’s. Food and wine are another big one, though there it’s a lot more subjective on the order of drugs – aren’t there studies that pop up periodically about how very few people can tell the difference between a nine-dollar bottle of wine and a ninety-nine dollar one if they’re tasting blind? Our minds try to create the effect we expect, and if we’re paying four times as much for one pill as for another, we’ll probably struggle a little harder to be up and about, or interpret the same symptom in two different ways (“It’s not so bad” vs. “This drug does NOTHING!”)

    As for me, I don’t have prescription coverage, so I’ll happily take the generic :).

  2. Alder says:

    Wow, that is messed up.

    What the pharmacies should do is mark up the drugs a lot and then put them on super-sale 🙂

  3. Medicine in this country is a very strange business. I’ve been at it a quarter century, and the amount of hype and commercialism is at an all time hypocritical high.

    Dr. Bibey

  4. poetloverrebelspy says:

    I was pondering this over the weekend, Dana. Do you suppose it works for contraception, too???

  5. Dana says:

    Poetloverrebelspy: I sincerely doubt it. They’ve only shown this effect on painkillers so far, at least that I know of. Maybe it only happens in situations where our perception/conscious awareness plays a part in the effect?

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