The placebo effect is a well-studied and used effect of a placebo intervention on a recipient who expects the intervention to be active. A placebo intervention is a medical intervention (most commonly a drug administration) that is considered directly inactive yet turns out to be indirectly active, with respect to the patient’s expectations. One of the most interesting aspects of the placebo effect is how powerful it is – many times the non-placebo effect of common drugs is only slightly higher than the placebo!

Examples of the effectiveness of placebo versus non-placebo:

Surveys of placebo effectiveness and usefulness:

While the power of the placebo effect is well-recognized and used prolifically by randomized, placebo-controlled clinical trials clinical trials (usually considered the “gold standard” of clinical trials) to determine the efficacy of medical interventions, placebos are not used in consumer products such as over-the-counter drugs. Why not take advantage of the placebo effect in consumer products by offering bundles of placebo and non-placebo doses to buy? Well, there are a few reasons I can think of:

  • users assume they are taking a placebo, so will not worry about side-effects or mixing drugs
  • users assume they are taking a placebo and so experience an adverse nocebo effect
  • users feel scammed if it is not clear that some amount of the drug they are buying is just sugar pills
  • pharmacuetical companies use manipulative marketing to advertise placebos in order to cut costs of producing the non-placebo drug
  • the placebo effect wanes when the user actively chooses to buy a bundle that includes placebos rather than the regular non-placebo

And I’m sure there are other issues that I am not thinking of.

Overall, if these issues are adequately adressed, I think that the value of the placebo effect to provide useful treatments at a low cost is likely to be much larger than the detriments to however much of the issues are not addressed (this calculation is included in the “adequately” qualifier).

I can imagine a deal where a drug is sold in two versions:

  • Deal 1: the current deal, where a pack contains just doses of the FDA-approved drug
  • Deal 2: the novel deal, where a pack contains 50% placebo and 50% non-placebo doses of the FDA-approved drug

Deal 2 takes advantage of the placebo effect since, among the doses included in the pack, the placebo and non-placebo doses are not distinguished. For the sake of safety, however, the same instructions and warning for taking doses of the drug also apply to taking doses from a deal 2 pack.

Deal 2 could be offered a somewhere in the range of a 35-45% discount to reflect how marginal production is roughly half the cost that of deal 1. This could be called the placebo discount! It’s a win-win since the buyer at a lower cost takes advantage of the placebo effect (which is often comparable to the non-placebo effect of the drug) and the seller makes rougly the same (or perhaps slightly more) profits as if they sold a deal 2 pack.