CASE STUDY ASSIGNMENT
Unit 3 Assignment: Case Study
(A defense to DTA prescription drug advertising)
CASE STUDY ASSIGNMENT
Abstract
Information retrieved from the annals of Indiana University’s Kelley School of Business
shows a growing pattern of pervasive consumer advertising occasioned by rapid growth of the
pharmaceutical industry. Scholars (Cox & Cox, 2010) confirm that consumer promotion for
prescription drugs now exceed those of alcoholic beverages and tobacco products. The
pharmaceutical industry continues to infiltrate virtually all consumer segments targeting all
demographics from children to youths and adults, and especially so, the elderly. In numerous
case studies, it was uncovered that this industry practically manufactures and sells disease,
ailments, and other medical conditions (Splendora, 2012). With the direct-to-customer (DTC)
advertising, leading players in the industry are capable of persuading consumers by plastering
prescription drug ads in billboards in major interstate highways, infomercials, and on TV. DTC
advertising has, therefore, drawn criticism amid emerging concerns of deception, potential
product risk, and an escalating rate of prescription drug inflation.
Issues
Some of the underlying issues of concerns surround the pervasive growth of consumer
advertising within the context of a regulated industry, specifically the pharmaceutical industry.
For instance, medical experts have expressed concerns with the degree of persuasiveness of DTC
advertising as applied in consumer promotion with the conviction that DTC ads are deceptive.
Studies have shown that consumption for prescription drugs has currently risen and is projected
to rise further in the future, a trend attributed to deceptive advertising. A recent article published
in the New York Times claims that some conditions as described in DTC ads are variations of
the actual medical condition while others are merely imaginary conditions. There is practically a
CASE STUDY ASSIGNMENT
pill for any perceived state of mind or human emotion like headaches, migraines, insomnia. The
possibility that a patient is likely to consume the wrong pill for their condition exceeds the
reasonable chance of taking the right one.
There is also the issue of potential health risks associated with certain prescription drugs.
There is always a reasonable belief that the manufacturer of any given product for sale is likely
to downplay the potential risk borne by their products since that would reduce the consumer’s
willingness to purchase the products. The FDA categorically requires all manufacturers of
prescription drugs to report product risks. The consumer also has the right to know the
consequences of taking any prescription drug. DTC magazine and television ads undermine the
potential health risks. For instance, DTC newspaper ads present product risks in smaller font and
usually in complex language making it difficult to understand and to present a legal loophole in
case of potential lawsuits. Modern scholars believe this is subtle and unscrupulous deception
perpetuated by an industry that ought to protect their consumers as opposed to harming them.
Decision-Making
To address every issue of concern, certain decisions need to be made. These decisions are
either internal – within the organization – or external. The major decisions to be made in view of
the concerns highlighted above revolve around business regulation. First, every organization
must ensure that their products adhere to FDA regulations on advertising to the letter (Cox &
Cox, 2010). Likewise, every manufacturer of prescription drugs must notify the FDA and the
consumer of the potential ramifications of consuming their products. Every organization should
form a special taskforce on integrity of consumer promotion. This should be a joint taskforce
comprising supervisors of the legal and ethical standards (Ewen, 1976).
CASE STUDY ASSIGNMENT
External Analysis
As a process, decision making is influenced by factors outside the organizational
mainstream. Some of these external factors are often beyond the company’s control. The most
influential external factors include the economy as a whole, competition with the industry, and
technology. All these factors are dynamic and unpredictable. The best thing a firm can do is to
keep up with the changing dynamics such as rapid growth in technological advancement,
changing consumer patterns, shifting customer tastes, likes, and preferences. Likewise, political
factors are likely to inform decision-making processes. Congress may enact laws regarding any
such requirement (Cox & Cox, 2010)
Internal Analysis
Decision making in every organization is influenced at least in part by the internal
environment. Internal factors that informed choices within an organization include events,
personnel, systems and structures, and conditions with the organizations as well as its leadership
culture. Leadership emerges as the most influential internal factor of decision making. Action
oriented leaders and visionaries are likely to effect change. Internal factors revolve around the
attitudes of the personnel in question as well as their commitment to achieving the designated
objectives. Experts note that the organization's mission statement also influences the decisionmaking process (Cox & Cox, 2010).
Proposed Solutions
To every problem, lies the solution. To address the concern that DTC advertising is
deceptive and misleading, Congress should enact laws that are clear and simple to enable the
FDA to better regulate prescription drug advertising. For instance, every manufacturer of
CASE STUDY ASSIGNMENT
prescription drugs must state the most severe side effects of every pill. Likewise, any benefit,
stated or implied, associated to the drugs in the form of advertising must bear scientific proof
before approval of any advertising claim. There should be laws that categorically require all
manufacturers to comply as well as laws to punish those who do not comply with strict punitive
measures (Cox & Cox, 2010).
The law is enacted to protect all consumers, which is why the solution, as proposed is a
legal one. The major weakness of proposing a legal solution to regulate prescription drug
advertising is that the pharmaceutical industry has infiltrated Congress. Through professional
lobbying and campaign contributions to midterm elections, pharmaceutical players have the
means to influence the lawmaking process to protect their business interests. Any real change
would be undermined through unnecessary delay tactics to stall the process of real change.
Professor Annabel Kimberly of the University of Nairobi confirms that the regulatory capture is
a real issue in contemporary lawmaking (Cox & Cox, 2010).
Another alternative would be raising the awareness bar through informed action. This
would take a series of awareness campaigns sponsored by major humanitarians and human rights
watchdogs such as the United Nations and other intergovernmental organizations (Splendora,
2012). The goal here is to increase awareness by letting people know what they are consuming
and the probability of advertising deception for prescription drugs. The fundamental strength of
awareness is that it appeals to people's hearts and as such it brings about initiative and
willingness. A potential weakness of this approach, however, is that consumers are ignorant of
their long-term health concerns, which makes patients likely to consume pills regardless of the
potential risks.
CASE STUDY ASSIGNMENT
References
Cox, A. & Cox, D. (2010) “A defense to Direct-To-Customer prescription drug advertising”
Indiana State University: Kelley School of Business
Ewen, S. (1976) Captains of Consciousness: Advertising and the Social Roots of Consumer
Culture New York: McGraw-Hill
Splendora, A. (2012) “Discourse,” a Review of Vestergaard and Schrøder, The Language of
Advertising in Language in Society Vol. 15, No. 4 pp. 445–449
Vestergaard, T & Schrøder, K. (1985) The Language of Advertising Oxford: Basil Blackwell