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Company case 20 (social responsibility and marketing ethics)
Diet Pills: Too Good to Be Good for You
Americans spend $40 billion a year trying to stay thin, but they keep gaining weight. Recent data from the Centers for Disease Control indicate that one-third of all Americans were obese in 1991, up from 25 percent a decade earlier. By now, the portion of the population classified as obese is rapidly approaching 40 percent and the cost of having an overweight population is estimated to approach $100 billion a year. The medical community considers obesity to be the second greatest health hazard in the United States – right behind smoking. So losing weight is not just a personal, emotional, or appearance issue for individuals; it’s a public health issue.
All that fat is a problem for individuals and the health care system, but companies such as Interneuron perceived it to be a major opportunity. Interneuron licensed Amerian Home Products to market Redux, one of the most popular diet pills ever. When the FDA approved Redux in April 1995, American Home Products unleashed a major promotional program for it. In just five years, sales of Redux soared to an estimated $1 billion annually. But in August 1996, the New England Journal of Medicine ignited a major furor over diet pills when it published a study linking the main ingredient in Redux to a rare but deadly lung disorder. Sales declined and the criticism of Redux and other diet pills such as Phen-fen escalated. In the fall of 1997, the FDA took Redux and Phen-fen off the market, but that was already too late for some Americans who suffered and died from taking diet pills.
Why do such tragedies occur? Who is at fault when the system fails to prevent the marketing of dangeroug products such as Redux/ there are no simple answers to such questions. First, there is tremendous demand for weight-reduction solutions. Americans are obsessed with being thin. The diet soda industry in the United States rakes in $16 billion a year;
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