Newswise —
A fresh article in the Journal of Marketing by researchers at Johns Hopkins University explores the impact of negative medical results on individuals' preferences for generic and brand name medications.
The forthcoming Journal of Marketing paper, authored by Manuel Hermosilla and Andrew T. Ching, and titled "Does Bad Medical News Decrease Generic Drug Preferences?" investigates this topic.
During the peak of the COVID-19 pandemic, Manuel Hermosilla was contacted by a family friend in Chile who had been diagnosed with cancer. Due to the drug's purported therapeutic abilities to fight COVID-19, Hydroxychloroquine was in short supply and the friend needed assistance in locating it to treat her rheumatoid arthritis.
After conducting some research, Hermosilla found two options for Hydroxychloroquine: a generic version that cost around $15 per month and a branded version that was priced at a hefty $330. However, the family friend refused to consider the generic version, stating that she did not believe it was "safe" enough due to her cancer diagnosis. This incident prompted Hermosilla to consider whether medical-related insecurities could affect patients' decisions between brand and generic drugs.
Receiving negative medical information can be concerning, and may lead individuals to adopt healthier habits, such as exercising more frequently or consuming a more nutritious diet. Additionally, since brand name drugs are commonly thought to be more potent and potentially safer than their generic counterparts (despite the fact that many specialists view generics as exact replicas of brand name drugs), unfavorable medical news might also have an impact on the selection process between medications.
The findings of this recent study indicate that the United States healthcare system could potentially save a significant amount of money - approximately $36 billion per year, which is equivalent to around 10% of total drug expenditures - if patients consistently opted for generic drugs when they were available. The researchers propose that a more extensive use of generics could dramatically decrease expenses without compromising the quality of care received by patients.
Emotions and Risk-Taking
Prior research has concentrated on the notion that consumers do not have sufficient information to feel confident about the therapeutic equivalence of generic and brand name drugs. In contrast, Hermosilla notes that their research focuses on how negative information shocks could affect patients' decision-making. Their study builds on literature that indicates negative emotions have a tendency to reduce individuals' inclination towards taking risks.
Receiving negative medical news is a frequent and often inevitable part of interactions with the healthcare system. The authors of this study initially concentrate on medical news that is often communicated through blood testing results for low-density lipoprotein (LDL) cholesterol. Specifically, they examine the "frontier" that exists between LDL results of 129 mg/dL and 130 mg/dL - the boundary between the "near optimal" and "borderline high" ranges. This test is commonly conducted and has a distinct cutoff point defined in clinical guidelines. Additionally, since LDL levels are known to be measured with a significant degree of error (depending on factors such as fasting), it suggests that individuals with LDL levels of 129 mg/dL and 130 mg/dL have the same health condition.
The study's authors conducted an examination of 2,282 individuals who tested within the frontier between LDL results of 129/130 mg/dL, with the analysis encompassing all prescription drug selections made by these patients across six different drug categories. They discovered that a "borderline high" LDL test result had an impact on drug selection. Patients who received the unfavorable medical news (130 mg/dL) were 1.3% less likely to choose the generic drug option when compared to the control group of patients who tested at 129 mg/dL. Accounting for the typical price discount of generic drugs relative to their brand name counterparts, this effect implies an increase in total drug expenditures of roughly 3% for the average patient.
The negative impact of bad news on the selection of generic drugs is most pronounced within the first 90 days following the test results. Furthermore, this effect is particularly significant among patients who are purchasing a drug for the first time. Additionally, the effect is even stronger among healthier patients who may be more taken aback by the unfavorable news.
To expand on their findings, the researchers examined the impact of bad news on drug selection among patients with diabetes who were undergoing Hemoglobin A1c blood sugar tests, used for diagnosis and management of the condition. Specifically, they focused on the threshold of 6.9% to 7%, which is used by patients with diabetes to manage their condition. The results from this analysis were generally consistent with the initial findings, suggesting that negative medical news reduces patients' willingness to choose generic drugs, despite the perception of higher risk associated with brand name drugs.
Bad News as a Factor in Drug Recommendations
Although previous research on bad news in healthcare settings has mainly focused on severe outcomes such as cancer diagnoses or death, this study suggests that examining routine tests can provide valuable insights into healthcare spending decisions. By understanding the impact of bad medical news on patients' drug choices, healthcare providers and policymakers can work to promote the use of cost-effective generic drugs without compromising patient care.
The findings of this study have implications for several key stakeholders in the healthcare industry, including health policymakers, generic drug manufacturers, and insurers. All these stakeholders share a common goal of promoting the use of cost-effective generic drugs over brand name drugs. Currently, insurers use two primary strategies to encourage patients to choose generics: demographic and socioeconomic predictors of generic-averse attitudes, and price-based promotions such as discounts, coupons, and free samples. The study's results suggest that these strategies may need to be supplemented with interventions that address the impact of bad medical news on patients' drug choices. By understanding how negative medical results influence patients' drug preferences, policymakers and insurers can develop more effective strategies to promote the use of generic drugs and reduce healthcare spending.
That could be a potential intervention tool that could be effective in addressing the negative impact of bad medical news on patients’ preferences for generic drugs. Additionally, educating patients about the therapeutic equivalency and safety of generic drugs through targeted messaging and campaigns could also help improve the uptake of generics. Insurers and policymakers could also consider implementing policies that incentivize the use of generics, such as lowering co-payments or providing other financial incentives.
Full article and author contact information available at: https://doi.org/10.1177/00222429231158360
1This figure follows the findings of Haas et al. (2005) and Johansen and Richardson (2016), who estimate that prescription drug expenditures in the U.S. could fall by 10% in the (partial equilibrium) scenario of full generic substitution.
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The Journal of Marketing develops and disseminates knowledge about real-world marketing questions useful to scholars, educators, managers, policy makers, consumers, and other societal stakeholders around the world. Published by the American Marketing Association since its founding in 1936, JM has played a significant role in shaping the content and boundaries of the marketing discipline. Shrihari (Hari) Sridhar (Joe Foster ’56 Chair in Business Leadership, Professor of Marketing at Mays Business School, Texas A&M University) serves as the current Editor in Chief.
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