The pharmaceutical industry’s efforts to self-regulate its direct-to-consumer (DTC) advertising are “an industry-sponsored ruse,” intended to deflect criticism and collectively block new Federal regulation, a study released today in the Journal of Health Politics, Policy and Law found.
The paper, “The Politics and Strategy of Industry Self-Regulation: The Pharmaceutical Industry's Principles for Ethical Direct-to-Consumer Advertising as a Deceptive Blocking Strategy,” was written by Denis Arnold, Associate Professor of Management and Surtman Distinguished Scholar in Business Ethics in the Belk College of Business at UNC Charlotte, with Jim Oakley, Associate Professor of Marketing at Montana State University.
Arnold and Oakley studied the marketing campaigns for erectile dysfunction (ED) drugs over a four-year period, 2006 to 2010. These products include sildenafil citrate, manufactured and marketed as Viagra in the U.S. by Pfizer; tadalafil, manufactured and marketed as Cialis in the U.S. by Eli Lilly; and vardenafil HCI, manufactured by Bayer Healthcare and jointly marketed as Levitra in the U.S. by Bayer Healthcare, GlaxoSmithKline and Merck.
All of these companies have certified compliance with the “PhRMA Guiding Principles,” developed by the Pharmaceutical Research and Manufacturers of America trade organization and first introduced in 2005. Under these guidelines, a company must commit to internal processes to ensure compliance with the principles, complete an annual certification of compliance, and submit a document to PhRMA signed by the CEO and chief compliance officer attesting to compliance.
“The Guiding Principles were introduced, as least in part, to preclude the need for additional federal regulation of broadcast drug advertising,” Arnold said. “In this regard they have been largely successful.”
Arnold and Oakley’s analysis found that rather than a serious effort to facilitate the education of consumers, the Guiding Principles were often ignored, putting consumers at possible risk and exposing children to inappropriate content.
“Cumulatively, our data shows that ED marketing campaigns fail to responsibly educate consumers about health conditions and appropriate treatments,” Arnold said. “Instead of facilitating a balancing of interests between company profits and public health, the illusion of industry self-regulation is primarily serving the interest of pharmaceutical companies at the expense of the public’s interest in genuine health education and welfare.”
Among the findings in the study:
“We were surprised by the findings,” Arnold said. “We did not expect this level of non-compliance. It is troubling to discover that executives at these companies are engaged in this level of duplicity.”
Arnold and Oakley make a number of recommendations to rectify the ineffectiveness of the industry-developed self-regulation, including maintaining bans on DTC advertising where they currently exist. In countries without a ban, most notably the U.S. and New Zealand, the study recommends a more robust regulatory climate. Options might include:
“In the case of New Zealand, some of these changes could be introduced via amendments to the existing Code for Therapeutic Advertising by the Advertising Standards Authority, while others could be introduced by the Ministry of Health,” Arnold explained. “In the U.S., the ability for Congress and FDA to implement such regulatory changes will be subject to the evolving role of the Supreme Court in assessing what constraints may be placed on commercial speech. However, Congress could empower existing agencies or departments to penalize firms for making false claims about their advertising.”
Arnold and Oakley also recommend that additional resources be provided, within existing regulatory frameworks, so regulatory agencies can more rigorously enforce of statutory requirements.
“The ultimate goal of these recommendations is to better balance the interests of pharmaceutical companies and the public,” Arnold said.
The full study appears online Feb. 15, 2013 and will appear in print in the June 2013 issue of the Journal of Health Politics, Policy and Law, published by Duke University Press. Visit jhppl.dukejournals.org for additional information.
About the Authors:
Dr. Denis Arnold
Denis Arnold is Associate Professor of Management and Surtman Distinguished Scholar in Business Ethics in the Belk College of Business at UNC Charlotte. He earned a Ph.D. in 1997 from the University of Minnesota. His publications include many journal articles, chapters, and books. Arnold is Editor in Chief of the academic journal Business Ethics Quarterly. He is also a past President of the Society for Business Ethics, the main professional organization for business ethics scholars in the United States.
Dr. James Oakley
James Oakley is an Associate Professor of Marketing at Montana State University. Prior to joining the faculty at Montana State in 2012, he held faculty positions at UNC Charlotte and Purdue University. Oakley earned a Ph.D. in marketing from Northwestern University in 2002. His primary research interests lie in the areas of marketing strategy and branding, and their impact on consumer behavior. His research has been published in a variety of international outlets and has been cited in the media a number of times, including Financial Times and Business Week. Oakley is also a member of the Executive Board for the Association for Marketing & Health Care Research and serves as the program chair for the association’s international conference.
Address: College of Business, 346 Reid Hall, Bozeman, MT 59717-3040