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Part Seven Special Topics and Perspectives
Belch: Advertising and
Promotion, Sixth Edition
VII. Special Topics and
Perspectives
argue that drug advertising is expensive, thus adding to
the costs of drugs, and that it also encourages consumers
to request the higher-cost brand names rather
than less expensive generic alternatives. General Motors,
which spent $1.3 billion in 2001 on drugs for employees,
has launched a “Generics First” campaign promoting the
less expensive alternatives in e-mails, on paycheck stubs,
and in corporate newsletters. Health insurer Blue Cross
has fired back at the drug companies with its own directto-consumer
ads promoting generics.
Many experts feel that drug companies will have to
pay more attention to the concerns being raised over
21. Regulation of
Advertising and Promotion
© The McGraw−Hill
Companies, 2003
their rapid increase in advertising spending. However,
most drug companies say they have no plans to cut
back on their direct-to-consumer advertising as they
feel they need to educate consumers on how their
products can help them. It may only be a matter of
time before Pfizer develops a “Got Viagra?” campaign.
Sources: Christine Bittar, “Creating an Rx Monster,” Brandweek,
July 29, 2002, pp. 22–29; “Reining in Drug Advertising,” The Wall
Street Journal, Mar. 13, 2002, pp. B1, 4; Chris Adams, “FDA Inundated
Trying to Assess Drug Ad Pitches,” The Wall Street Journal, Mar. 14,
2002, pp. B1, 6.
involving the use of the mail and ads that involve lotteries, obscenity, or fraud. The
regulation against fraudulent use of the mail has been used to control deceptive advertising
by numerous direct-response advertisers. These firms advertise on TV or radio
or in magazines and newspapers and use the U.S. mail to receive orders and payment.
Many have been prosecuted by the Post Office Department for use of the mail in conjunction
with a fraudulent or deceptive offer.
Bureau of Alcohol, Tobacco, and Firearms The Bureau of Alcohol,
Tobacco, and Firearms (BATF) is an agency within the Treasury Department that
enforces laws, develops regulations, and is responsible for tax collection for the liquor
industry. The BATF regulates and controls the advertising of alcoholic beverages. The
agency determines what information can be provided in ads as well as what constitutes
false and misleading advertising. It is also responsible for including warning labels on
alcohol advertising and banning the use of active athletes in beer commercials. The
BATF can impose strong sanctions for violators. As was discussed at the beginning of
this chapter, the advertising of alcoholic beverages has become a very controversial
issue, with many consumer and public-interest groups calling for a total ban on the
advertising of beer, wine, and liquor.
The Lanham Act
While most advertisers rely on self-regulatory mechanisms and the FTC to deal with
deceptive or misleading advertising by their competitors, many companies are filing
lawsuits against competitors they believe are making false claims. One piece of federal
legislation that has become increasingly important in this regard is the Lanham
Act. This act was originally written in 1947 as the Lanham Trade-Mark Act to protect
words, names, symbols, or other devices adopted to identify and distinguish a manufacturer’s
products. The Lanham Act was amended to encompass false advertising by
prohibiting “any false description or representation including words or other symbols
tending falsely to describe or represent the same.” While the FTC Act did not give
individual advertisers the opportunity to sue a competitor for deceptive advertising,
civil suits are permitted under the Lanham Act.
More and more companies are using the Lanham Act to sue competitors for their
advertising claims, particularly since comparative advertising has become so common.
For example, a court ordered Ralston Purina to pay Alpo Petfoods $12 million
for damages it caused by making false claims that its Purina Puppy Chow dog food
could ameliorate and help prevent joint disease. The court ruled that the claim was
based on faulty data and that the company continued the campaign after learning its
research was in error. Alpo was awarded the money as compensation for lost revenue
and for the costs of advertising it ran in response to the Puppy Chow campaign. 69
Wilkinson Sword and its advertising agency were found guilty of false advertising
and ordered to pay $953,000 in damages to the Gillette Co. Wilkinson had run TV and
print ads claiming its Ultra Glide razor and blades produced shaves “six times