Justifying the High Price of Medication: How Relational Framing Reduces Consumer Distress

Janet Schwartz, Princeton University
A. Peter McGraw, University of Colorado, Boulder
People are distressed when pharmaceutical companies use market-pricing justifications for pricing decisions. Consumers are reluctant to confront explicit trade-offs between health and money. Distress and perceptions of fairness, however, are mitigated when pharmaceutical companies use communal-sharing rationales to justify prices. A common example is that high prices compensate for the R&D failures of medicines that benefit public health. For other utilitarian products, such as software, however, communal-sharing justifications do not mitigate pricing criticisms and are perceived as less believable. Moreover, communal-sharing rationales are effective only for medicines designed to improve health and well-being, and thus are deemed a “necessity.”
[ to cite ]:
Janet Schwartz and A. Peter McGraw (2008) ,"Justifying the High Price of Medication: How Relational Framing Reduces Consumer Distress", in NA - Advances in Consumer Research Volume 35, eds. Angela Y. Lee and Dilip Soman, Duluth, MN : Association for Consumer Research, Pages: 253-256.