Test run of drug prices in ads exposes a loophole—and pharma's already using it

Drug prices
Adding drug prices to ads may not spur consumers to seek lower cost options, according to new research. (Getty/Tero Vesalainen)

It’s no surprise that listing the high price of a drug in advertising would discourage consumers. But add in an offer to help cover the cost—with copay or coupon assistance—and viewers are fine with a pricey option, a new study found.

Research published in JAMA last week found that even when the price in a mock-up ad was a whopping $15,500 per month, viewers were still likely to be interested when the ad also noted that eligible patients may pay "as little as $0 per month." And that's an offer already common in drug advertising.

The researchers initiated the study to find out what effect, if any, the Trump administration's proposal to force list prices into TV commercials might have on consumer response.

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The study asked 580 Americans to view one of five different ads for the same made-up drug. Two of the print ads bore a $15,500 price tag; one version included a payment assistance offer and the other didn't. The second set of ads priced the drug at $50, one with payment assistance and the other without. The fifth ad didn't include a price.

RELATED: Seniors want drug prices in ads. Young people? Eh, whatever: survey

In the lower-priced set, consumers showed little change in response across four measures—whether they would ask their doctor about the drug, ask their insurer, research the drug online, or take the drug—with or without the assistance offer.

But viewing the high-priced ad without the payment modifier “significantly reduced the likelihood” that participants would act on the ad at all. When they watched the ad that dangled a $0 copay, the “results were significantly mitigated,” the researchers found.

That means pharma companies that talk about patient financial assistance in their advertising are more likely to retain a consumer’s interest even if the ad includes a high list price. The study essentially showed that pharma companies already have a workaround if the Trump proposal becomes law and they are forced to show list prices in ads.

That wasn't the researchers' intent, though, as one of the authors emphasized. The researchers were simply investigating what might happen if drug prices are included in ads, he said.

RELATED: Trump's drug-prices-in-ads idea gets two more nay votes as federal comment deadline looms

“Given that the coupon or copay programs are already in place, we wanted to know would the (drug ad price) proposal work? Our evidence would suggest that while the policy wouldn’t hurt anything, it might not be as effective as it could be (unless) the policy also did something to curb those copay assistance programs,” said Clemson University professor Jace Garrett, Ph.D., who co-authored the study with Ge Bai, Ph.D., at Johns Hopkins University and William Taylor, Ph.D., at Brigham Young University.

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