By Matt Wheeler | July 19, 2022
Reasoned decision-making is a vital skill in all walks of life. In a vacuum, this means examining all the options and rationally picking the best course of action. But in the real world, there are factors that might cloud judgment or introduce bias, and it’s important to keep a lookout for these. One such tendency is known as the "sunk-cost fallacy."
Oxford Languages defines the sunk-cost fallacy as "the phenomenon whereby a person is reluctant to abandon a strategy or course of action because they have invested heavily in it, even when it is clear that abandonment would be more beneficial". This theory could relate to any number of steps within healthcare. Ideally, it should not inform decision-making, but in reality, human nature is susceptible to it.
It’s often quoted that only 10% drug development projects make it all the way from phase I to approval. The other 90% of "failures" may fall at many different hurdles; for instance, due to a lack of efficacy, an unacceptable safety profile, or acknowledgment of a likely lack of commercial interest. Significant resources, both financial and time expended, will have already been invested in development when these warning signs appear, but the rational (and ethical) decision is not to pursue these drugs further, regardless of their "sunken cost."
When it comes to clinical decision-making, there are ways in which, in theory, the sunk-cost fallacy could impact decision-making. If a healthcare provider has started a patient on an expensive therapy, but it becomes apparent that it is not working, might they be susceptible to continuing the treatment rather than switching to something less expensive? Or would a doctor be less willing to entertain an alternative diagnosis if they had already spent considerable time on the original investigations that have led to a potentially incorrect conclusion? A cross-sectional, in-person survey of 36 medical residents found that their evaluation of treatment decisions “reflected good reasoning, in that they were not influenced by the amount of time and/or money that had already been invested in treating a patient.” Interestingly, these skills were not shown to extrapolate to the evaluation of non-medical situations by the same people.
What of pharmaceutical marketing? Perhaps a pharma giant has invested millions over a number of years in cultivating a presence at an international congress, every year constructing the same eye-catching booth and updating their panels with the latest data for their brand (and serving fabulous coffee). They’ve formed great relationships with the organizers and are well into preparation for the next event in Melbourne. Unfortunately, an unexpected change to the license for the product means that there is now little correlation between the target healthcare professionals and the attendee list for the congress. Should they continue to invest in the event, or cut their losses?
Perhaps this all sounds a bit far-fetched–we all like to think we are (at least largely) rational in our decision-making. But the lesson seems a good one: investment in a project or idea should not preclude abandonment if it is the right thing to do, whether this applies to healthcare professionals, pharmaceutical companies or, in fact, within healthcare communications, hard though those conversations with clients might be. Not much use in updating the reference access dates and re-approving that beautifully designed, cutting-edge website that nobody has visited in the last five years, after all; far better to expand the range of targeted, data-driven emails that have demonstrably increased market share and sales. This is not to dissuade investment or creativity, by any stretch–just to point it boldly in the right direction, and to have the bravery to change course when necessary.
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Marketing, Branding, and PR