Health Comes at a Hidden Cost: Strategic Pricing and Equity in Heart Supplement Markets

Abstract

Strategic pricing can improve profitability but may exacerbate disparities among vulnerable consumers. To examine this tension, this work utilizes NielsenIQ data on heart-health supplement purchases, analyzing empirical coupon usage and price disparities associated with household demographics and health status. Based on these models, a simulation study evaluates the impact of four pricing strategies: uniform, second-degree, third-degree, and combined, under varying behavioral assumptions. Findings highlight how revenue gains from demographic-based pricing can come at the cost of increased inequity, but also show that more balanced outcomes which support both profitability and fairness, are achievable through combined or behavior-based strategies.