This blog is provided by the IPR Behavioral Insights Research Center.
Anyone working in public relations or corporate communication knows that words matter. Behavioral scientists have amassed considerable evidence that even small wording changes can sometimes have surprisingly large effects on people’s attitudes, judgments, and behaviors. Some of this work has focused on wording that contains “logically” equivalent phrasing but is either framed positively or negatively. For example, researchers have shown that people are less likely to go under the knife if the potential outcome of a surgery is framed in terms of failure (e.g., a 1% mortality rate) rather than success (e.g., a 99% chance of survival).
Semantically similar phrasing can also affect decision making. One of the best-known examples of this bias comes from an experiment in which individuals who viewed an automobile accident were asked to judge the speed of the cars when they either “smashed,” “collided,” “bumped,” “contacted,” or “hit” one another. Using “smashed” in the question led to higher speed estimates than any of the other verbs, an intriguing result that shows how leading questions can subtly shape the answers of witnesses in a trial.
In health communications, the labels that drug companies use to describe their medications can also affect how people respond. As an example, a recent paper found that when a drug was described as preventing a health problem rather than curing a problem, consumers displayed a stronger preference for the drug to be natural and sustainable. On the other hand, when the drug was described as curative (vs. preventative), consumers cared more about the drug’s potency and effectiveness.
In a new research article forthcoming in the Journal of Experimental Psychology: Applied, I find evidence of another wording effect that Marketing and Communications leaders who work in health care (including pharmaceuticals and biotech) should know about. Specifically, I show that when a health treatment (e.g., a medication or drug) is described as a cure, it fundamentally changes individuals’ expectations about how the treatment will be priced.
Because a drug that claims to cure a disease or illness seems superior to a drug that does not make such a strong claim, you might think that people would tolerate higher prices for cures than non-cures. This is consistent with the principle of “value-based” pricing: in general, people are willing to pay more for products or services that are more effective and therefore provide greater value.
But that’s not what I found! Instead, in the domain of health care, I provide robust evidence of a cure effect in which individuals prefer lower price levels for cures (vs. non-cures) and consider high prices to be especially unfair. This effect persists when companies describe their treatment by directly using the word “cure” or indirectly using language that merely suggests it is a cure (e.g., “100% effective,” “eliminates disease”).
Why does the cure effect occur? My research shows that when thinking about health treatments, people tend to focus on communal value rather than the traditional market value that underlies value-based pricing. In other words, because health care naturally lends itself to thinking about close relationships with others, individuals seek the fair and just distribution of outcomes. People are especially concerned about communal value when thinking about cures because they seem to be so effective and can presumably have an outsized effect on people’s well-being (e.g., cures can save lives). As a result, individuals demand lower prices for cures so that they can be more universally accessed.
The cure effect has important managerial and public policy implications, which can be highlighted by the cautionary tale of the biotechnology company, Gilead Sciences. Nearly a decade ago, when launching its new hepatitis C drugs, Sovaldi and Harvoni, Gilead loudly trumpeted that the drugs were cures and therefore warranted their exorbitant $1,000-per-pill price tag. This communications approach, which aligns with a value-based pricing model, fell flat in the court of public opinion. Patients and consumer watchdog organizations alike rose up against Gilead, deriding the company for engaging in unlawful price gouging. An inquiry was even opened to assess whether Gilead had violated consumer protection laws. In hindsight, Gilead did itself no favors by claiming that its drugs were cures that could eliminate the hepatitis C virus. A more restrained communications approach would have likely sparked much less consumer outrage.
Taking a public policy perspective, the current Food and Drug Administration (FDA) guidelines related to medication labels give drug manufacturers and marketers considerable flexibility in their word choices on product labels and advertisements. Because health treatments that claim to be cures are judged differently than non-cures—irrespective of whether this claim is accurate or inaccurate—it is imperative that regulatory agencies such as the FDA ensure that labels that appear on health treatments are truthful. Even if certain word pairs are accepted and considered interchangeable by the FDA or other regulatory agencies, they may be semantically different in the minds of individuals. My research shows that the mere substitution of one label for another can exert substantial influence on people’s judgments and behaviors that are both societally consequential and managerially relevant, such as insistence on universal drug access, price preferences, and price fairness judgments.
Isaac, M. (2023). cure effect: Individuals demand universal access for health treatments that claim to eliminate disease symptoms. Journal of Experimental Psychology: Applied, forthcoming.
Loftus, E. F., & Palmer, J. C. (1974). Reconstruction of automobile destruction: An example of the interaction between language and memory. Journal of Verbal Learning and Verbal Behavior, 13(5), 585-589.
Dr. Mathew Isaac is the chair of business administration at Albers School of Business and Economics at Seattle University. He is a marketing professor and senior advisor at Seattle University. Dr. Isaac is also a member of the IPR Behavioral Insights Research Center.