MANILA, Philippines?Would more people buy a generic drug if it cost as much as the brand-name product?

Put another way, if you?re in a drugstore comparing the labels on two different medicine bottles and find the ingredients and formulations are exactly the same, but Brand X is 25 times more expensive than Brand Y, which do you choose?

If you decide to buy Brand X, you?re not alone. A recent report suggests that price indicates quality, which may not necessarily be the case with medications.

In a letter that a appeared in the March 5 issue of the Journal of the American Medical Association, Dan Ariely, a behavioral economist at Massachusetts Institute of Technology, and his colleagues from Stanford University and Insead?s Singapore campus found that the price of a placebo pill significantly affected its perceived effects on the people taking it.

Tolerance for pain

Two years ago MIT researchers recruited 82 volunteers to help test what they said was a better pain reliever than codeine. Half of the group was told that the drug they received cost $2.50 a pill; the other half of the group was told their pills had been discounted to $0.10. In reality, each participant received the same placebo pill.

The team first applied a series of ever-increasing electric shocks to each participant?s wrist to test their tolerance for pain and recorded these results. After each volunteer had taken what they thought was a painkiller, the researchers repeated the electric shock tests and again recorded the results.

According to the results, 85 percent of the volunteers reported a decrease in the pain they felt from the electric shocks after taking the regular-priced pill and 15 percent reported that the pain increased during the second round of shocks. In contrast, only 60 percent of the volunteers who swallowed the discounted pill reported a decrease in pain, while the other 40 percent of the group reported that the pain increased.

In general, participants said 26 of the 29 electric shocks applied during each round hurt less after they took the placebo.

Equating cost with quality

?The results may help explain the popularity of high-cost medical therapies ? over inexpensive, widely-available alternatives,? the researchers write in their letter to the journal.

Ariely and his colleagues add that the data could also help explain patients who switch to a generic drug from brand-name version say their new treatments aren?t as effective. They suggest more studies be done to help medical professionals and patients alike improve their understanding of quality medications.

Equating cost with quality arguably isn?t much of a surprise. After all, isn?t this why so many people pay thousands of pesos for a boutique-label bag when a bag of similar make, size and design is available for much less at the nearby tiangge?

Ariely?s research is dedicated to understanding such behavior. As co-director of MIT?s eRationality group, his work looks at what the group website describes as ?ways in which human decision processes deviate from the expected rational prescriptions.?

The results lend credence to a theory behind Ariely?s recently released book, ?Predictably irrational: The hidden forces that shape our decisions.? I haven?t read the book yet, but based on the chapter titles, I?m guessing more information about the placebo study and other similar reports might be found in ?The Power of Price: Why 50-cent aspirin can do what a penny aspirin can?t.?

E-mail the author at massie@massie.com.