Month: November 2010

Is 11% of maybes that important to drug manufacturers, or can they just lower prices and give more away?

Posted on by Marc Jampole

The latest issue of AARP Bulletin has a survey on the awareness by consumers of advertising for prescription drugs.  The poll contrasts the percentage of peoples 18-49 and 50+ who experience different types of advertising for prescription drugs.   

Although supposedly focused on the concerns of those more than 50 years of age, AARP Bulletin once again shows that it may have taken over as the magazine of cultural issues and trends for Middle America now that Parade is little more than a postage stamp.  The survey touches on many hot button issues, including health care, the cost of prescription drugs and the use of media by both businesses and the public.

The survey, conducted by Social Science Research Solutions, a private research firm, shows hardly any difference in the rate at which those two age groups, younger and older, see ads for prescription drugs (sometimes squeamishly called “ethical pharmaceuticals”) on/in TV, magazines, radio, newspapers, Internet, pharmacies and email.

The most interesting finding, though, is that only 11% of younger people and 9% of older people have ever asked their physician for a prescription of a drug they saw in an ad.

How many times do we see ads on TV for prescription drugs to cure or ameliorate erectile dysfunction, obesity, diabetes, depression, high blood pressure, high cholesterol and chronic pain?  I think you’ll find that whatever the time of day and whatever the magazine, the objective of a large percentage of all ads is to sell directly to the public those drugs that only a doctor can order.

It seems so unethical, and now we see that it doesn’t even do much good. 

Drug companies are pouring hundreds of millions of dollars a year into advertising to reach a mere 9-11% of any market.  Pfizer, maker of Lipitor for high cholesterol and Viagra for low you-know-what, spent $1.2 billion on advertising all by itself in 2007, the latest year I could find online.  

All that money is only affecting 9-11% of the total market for each of its drugs! An absolute waste of money!

Perhaps the drug companies would be better off if they did not advertise to the public at all, but limited their marketing to physicians.  I’m not saying that drug companies should not have websites and brochures that explain in lay terms the benefits and side effects of their drugs.  I’m talking about the obtrusive and sanctimoniously obnoxious outreach in TV, email, magazine and other advertising.

Better that the drug companies not spend these enormous sums on advertising and instead lower their prices to consumers and hospitals.

Voters reject Tea Party extremists but embrace mainstream media’s glorification of Republicans.

Posted on by Marc Jampole

I am dismayed by the number of house seats that fell to Republicans in yesterday’s election, and a little surprised.  Although I study the impact of propaganda every day, it still befuddles me whenever I see people falling for a line of hooey, even if it is fed to them in large doses day after day, by the news media.

And make no mistake about it: the single largest factor contributing to Republicans recapturing the House of Representatives so emphatically is the mainstream news media, which for the past 18 months have told the story of national issues and the election campaign completely from the Republican point of view. 

Here are some specific actions that the mainstream news media took to help Republicans, all of them documented in the OpEdge entries over the past year and a half:

  • Reported on health care reform and other issues from the Republican point of view.  Let’s take healthcare reform as an example: the news media did not clearly explain what the legislation would do; reported false information about death panels and loss of benefits; highlighted side shows such as covering abortions; defined the terms of the debate in ways that would help the Republicans; and did not educate citizens on the degree of private sector involvement in current government healthcare programs.
  • Gave more coverage to right-wing rallies and widely reported the outlandish estimates for these affairs, while providing minimum coverage to rallies of progressives and Democrats. 
  • Focused coverage on right-wing anger, e.g., at healthcare reform, and not on left-wing anger, e.g., that reform did not go far enough.
  • Played into the short-term thinking that gave Republicans a free pass for 8 years of destructive policies, but blamed our economic woes on less than 2 years of Obama rule.
  • Covered only the Republican primaries in national news, virtually ignoring all Democratic races.  For some reason, national media could find not one Democratic primary race that had any national significance or unusual angle.
  • Gave much more extensive coverage to the Republican candidates during the election season, especially in human interest stories. 

What the news media couldn’t do is prettify the extremist statements of the most prominent Tea Party candidates.  I have identified 10 Tea partiers who received extensive coverage in national news media and strong backing from Sarah Palin. Their record: 3-7, with all the women going down to defeat.  For Republicans, though, it’s a little better, since one of the Tea Party’s “Big 10” lost to a Republican.

Here’s the tally:

Angle/Senator Nevada – LOSE

Fiorina/Senator California – LOSE

McMahon/Senator Connecticut – LOSE

Miller/Senator Alaska – LOSE to Republican Murkowski

O’Donnell/Senator Maryland – LOSE

Paladino/Governor New York – LOSE

Paul/Senator Kentucky – WIN

Rubio/Senator Florida – WIN

Toomey/Senator Pennsylvania – WIN

Whitman/Governor California – LOSE

The less extremist Republicans who did win are still to the right of where most voters stand on particular issues, such as specific clauses in healthcare reform, the need to provide continuing unemployment benefits and the role of government in repairing our frayed infrastructure.  But the Republicans did not win on issues; they won on a big-picture message: The Democrats made the recession worse than it could have been by expanding government interference in the economy.

For those who are blaming the Democrats for failure to make their basic messages—and there are many on both sides of the aisle making that claim—I respond: isn’t it the mainstream news media that rejected the Democrats’ basic messages?  Of course it is.  The messages that the recession would have been worse without government intervention and that we need more financial regulation were fine and accurate.  They would have resonated with voters if allowed to get through to them.  Instead, the news media preferred to present unmitigated anger and frustration, proposing in the commentary that these emotions were only bubbling up on the right.

LA Times blames continued recession on the honest people paying off their underwater mortgages.

Posted on by Marc Jampole

Yesterday the Los Angeles Times identified the true culprit in our continued recession.  All this time I thought it was Congress to blame for not passing a larger stimulus bill that would have included more aid to those out of work and more spending on our basic infrastructure of roads, bridges, mass transit and public schools.

Turns out I was wrong (thinly veiled sarcasm).  Turns out, at least according to La-La’s Land’s newspaper of record, that the recession would be over a lot sooner if all those honest people who continue to pay off their mortgage even though the mortgage is now worth more than the house would just stop it.  According to the article titled “Millions of homeowners keep paying on underwater mortgages,” those committed to meeting their contractual obligations are keeping money out of the economy that would otherwise be spent on consumer goods.  

Here’s how reporter Don Lee puts it:

“Because, with home prices stagnant in much of the country, payments on mortgages that are underwater could absorb billions of dollars that might be used for other forms of consumer spending — a drag on family finances, the housing market and the overall economy.”

In simple English, the LA Times wants people to stop paying their mortgages so that they’ll have more money to spend on new cars, refrigerators, phones, flat-screen TVs, vacations and clothes, hopefully leveraging their new-found funds, which means not only spending the difference but also borrowing more.

Like most economists and economic reporters of all persuasions, Lee and the experts he quotes can only fathom one way to get out of the recession: spend more.  They fail to see that spending more only works out in the very short term, for two reasons:

  1. Sooner or later you have two choices only: either pay back the money, which will cripple a spending-induced economy or screw your creditors (meaning the American public, since the banks who loan the money will no doubt receive bailout assistance again).
  2. In the long run, an economy based on ever greater spending will consume resources and pollute the earth.

Some of my readers will remember the word “potlatch” from a college introductory course on anthropology.  It comes from the native American tribes in the Pacific Northwest.  According to Merriam-Webster’s, it means “a ceremonial feast or festival of the Indians of the northwest coast given for the display of wealth to validate or advance individual tribal position or social status and marked by the host’s lavish destruction of personal property and an ostentatious distribution of gifts that entails elaborate reciprocation.”  A potlatch is thus a mindless celebration of wastefully conspicuous consumption.  Preparing for these potlatches was a major economic driver in Indian societies.

We’ll never know for sure when potlatches would have depleted the resources of the Northwest tribes, because before it happened, European settlers arrived with diseases that reduced the population by 75%.  We do know that a potlatch of monumental building depleted the resources on the Pacific island of Rapa Nui and led directly to the total eradication of the population there.

We in the United States have developed a potlatch society and the only economic advice that most experts can offer for exiting the economic doldrums is to go on another potlatch.  But it just won’t work anymore.