Advertising Regulation

Killem Quick Pharmacy — Cocaine, opium, and other dangerous drugs could be sold legally as part of the patent medicine industry in 1900, when Puck magazine published this cartoon. Here a bartender (on the left) watches the pharmacist with envy. “I can’t begin to compete with this fellow,” he says. It’s notable that magazines led the charge for reform; newspapers depended so heavily on patent medicine advertising that many had agreed, by contract, never to say anything negative about the patent medicine business. The reform movement culminated in regulation of advertising and drugs with the establishment of the Food and Drug Administration in 1906 and the Federal Trade Commission in 1914.

Advertising in history  

Advertising is among the world’s oldest professions, and medicine is among the most sought-after products.  Street barkers loudly calling attention to products are typical in almost any market from antiquity to modern times, and cures for ailments have always been a part of those markets.  Advertisements painted on walls or wooden signs have been found by archaeologists in the ruins of ancient Egypt, Babylon, Greece, and other ancient civilizations. 

Ads for brand-name products are found in the UK as early as the 1600s. One ad appeared in a newspaper for Robert Turner’s dentifrice in 1661. When the bubonic plague hit England, ads for all kinds of remedies ran in newspapers: “Anti-Pestilential Pills,” “Incomparable Drink Against the Plague,” “The Only True Plague Water,” “Infallible Preventive Pills Against the Plague,” and “Sovereign Cordials Against the Corruption of the Air.”

With billboards, posters, newspapers, sandwich men, and other advertising, London became so cluttered that Charles II proclaimed, in the 1660s, that “No signs shall be hung across the streets shutting out the air and the light of the heavens.”    

But advertising regulation was left to common sense and other controls such as laws against indecency and sedition until the turn of the 20th century.    

One of the most lucrative and deceptive areas of advertising involved so-called  “patent” medicines.  Actually, they weren’t patented and they were not really medicine, but rather, exotic concoctions of  liquor and narcotics, as noted in the 1900 Puck Magazine illustration above.   

“Death’s Laboratory” and “Poison for the poor” was how Collier’s magazine depicted the patent medicine business in a 1905 muckraking series of articles by Samuel Hopkins Adams. “Gullible America will … swallow huge quantities of alcohol, an appalling amount of opiates and narcotics, and a wide assortment of varied drugs ranging from powerful and dangerous heart depressants to insidious liver stimulants,” Adams said in the opening to “The Great American Fraud” (Adams, 1905).

Cocaine and opium may stop pain, Hopkins argued, but narcotics are not safe, particularly when they are hidden under the label of “cough remedies,” “soothing syrups,” and “catarrhal powders.” And it was a grave injustice, Hopkins said, that people could be hoodwinked into thinking that extract of witch hazel could cure meningitis, or that concoctions based on cocaine and opium could cure cancer, or that mildly acidic formulas could prevent yellow fever. Even worse were the “soothing syrups” made of opium, given to children to keep them tranquil.

Adams also charged that the American newspapers and magazines were in league with the patent medicine advertisers. A “red clause” in the advertising contracts allowed the patent medicine makers to void the contract in case of adverse legislation or publicity. This meant that newspaper publishers had a strong financial interest in ensuring that people did not learn about patent medicines, and that no laws regulating patent medicine were passed at the state or federal levels.

Adams was not the first to point out that unregulated pharmaceutical and advertising industries had turned millions of ailing people into drug addicts. As early as 1892, the Ladies Home Journal  banned advertising for patent  medicines. And Coca-Cola, a popular drug-store tonic drink, stopped including cocaine in the formula around the turn of the century.

Adams’ articles came at a time when Americans were awakened to injustice and clamoring for reform. By 1906, Congress passed the Pure Food and Drug Act requiring federal inspection of meat and labeling of the drug content of medicines. The act paved the way for the creation of the Food and Drug Administration (FDA), which monitors pharmaceutical advertising as well as food safety.

In another series of articles, Adams wrote about the deadly impacts of misleading advertising for Grape-Nuts, a popular cereal made of bran, molasses, and salt. One advertisement read, “No Appendicitis For Those Who Use Grape-Nuts.” Another said, “It is a practical certainty that when a man has approaching symptoms of appendicitis, the attack can be avoided by discontinuing all food except Grape Nuts.”

“This is lying—Potentially deadly lying,” Adams wrote in a Collier’s editorial. In response, Postum Company ran an ad in other publications saying that Adams and Collier’s magazine were attacking them with “out and out falsehoods” in an attempt to win back their advertising contracts. In return, Collier’s sued Postum for libel in 1907 and won. Although the verdict was overturned on a technicality in 1912, the case for advertising regulation had been hammered home.  New regulatory agencies, especially the Food and Drug Administration (FDA) and Federal Trade Commission (FTC) were created to deal with the most obvious problems.       

Ongoing regulation (see Wikipedia article on the FDA)  

Many problems remained, even with the advent of new federal agencies. During the first decades of the 20th century,  journalists, consumer protection organizations  and federal regulators saw a need for stronger regulation of harmful products still on the market. These included radioactive beverages, makeup with dangerous  ingredients that caused blindness, and worthless “cures” for cancer, diabetes and tuberculosis.   A new law finally followed the public outcry over the 1937 Elixir Sulfanilamide tragedy, in which over 100 people died after using a drug formulated with a toxic, untested solvent.

This was the Federal Food, Drug, and Cosmetic Act, which became law on June 24, 1938. It  increased federal regulatory authority over drugs by mandating a pre-market review of the safety of all new drugs, as well as a ban on false therapeutic claims in drug labeling.  This ban was easier for FDA to enforce since it didn’t require the agency to  prove fraudulent intent.

Another tragedy in the 1950s led to even more regulatory vigilance. It involved a European drug called thalidomide, which was meant to help pregnant women cope with nausea and morning sickness, but which also caused birth defects and even the death of thousands of babies.  The drug was not sold in the US,  thanks in large part to Dr. Frances Oldham Kelsey of the FDA, who refused to authorize the medication for market. In the wake of the thalidomide tragedy in Europe and the near-miss in the US, the 1962  Kefauver-Harris Amendment to the FD&C Act  was passed. It was seen as a “revolution” in FDA regulatory authority. The most important change was the requirement that all new drug applications demonstrate “substantial evidence” of the drug’s efficacy for a marketed indication, in addition to the existing requirement for pre-marketing demonstration of safety. This marked the start of the FDA approval process in its modern form.

The context of commercial speech regulation 

Few advertisers opposed regulations in the early 20th century.  A few argued that their free speech rights were being trampled, but those views have changed dramatically in the United States. Before 1976, US courts drew a sharp distinction between the right to free political speech and the right to free speech in advertising. While local and state governments could not prohibit political dissent without running afoul of the First Amendment, they could control the content of commercial messages.

This meant, for example, that when laws were passed to curb the abuses of patent medicine advertising, there was no basis to complain that the First Amendment rights were being violated. However, it also meant that in 1928, when the United Mine Workers of America wanted to place ads in West Virginia newspapers during a coal strike, state courts could grant the coal industry an injunction to stop them. 

The idea that advertising could be regulated as states and localities saw fit was reinforced by the courts in a case called Valentine v. Christensen. The dispute started in 1940, when a surplus World War I submarine was being exhibited for profit, and the city of New York stopped the owner from passing out advertising on city streets. The US Supreme Court heard the submarine case in 1942 and ruled that the city was free to regulate advertising because commercial speech did not have First Amendment protection (Valentine v. Christensen, 316 US 52, 1942).

A much more difficult case was presented in 1964, when a lawsuit over a Civil Rights ad became the focus of a major national decision on the right to criticize public officials (see sidebar captioned “A landmark advertising and libel case”). The Sullivan case involved an advertisement that was clearly political, and the US courts tried to maintain a sharp distinction between commercial and political speech. However, ten years later, several advertising cases came up that presented both political and commercial dimensions.  These included US Supreme Court cases like Bigelow v. Virginia, 421 US 809, 1975 and Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 425 US 748, 1976.  (These are described in more detail in the following pages).  

This meant that state or federal agencies could prohibit false or deceptive advertising but they could not prohibit truthful advertising about lawful products in most cases (tobacco advertising was the important exception). A state or federal agency could only regulate the time, place, and manner of advertising, and the regulations had to be content neutral and narrowly tailored to meet a compelling government interest.

Subsequent cases confirmed the link between the First Amendment and the right to advertise, while still upholding the ability of governments to regulate false advertising.

One difficult case involved shoe manufacturer Nike Inc. in 1997. Investigators alleged that people making Nike shoes in Vietnam and other Asian nations were subject to dangerous and abusive working conditions. When Nike responded with a public relations campaign that denied such abuses existed, an activist named Marc Kasky sued Nike under California laws prohibiting false advertising. The state supreme court agreed, saying, “when a business enterprise, to promote and defend its sales and profits, makes factual representations about its own products or its own operations, it must speak truthfully.”

The case was sent to, and then sent back from, the US Supreme Court, without resolution. Eventually the case was settled out of court, and while both sides were not entirely satisfied, the validity of regulating untruthful advertising in a commercial area was upheld.   

FDA  regulatory loopholes 

Drug advertising regulation has two broad requirements: (1) a company may advertise or promote a drug only for the specific indication or medical use for which it was approved by FDA. And (2) an advertisement must contain a “fair balance” of information about both the benefits and the risks (side effects) of a drug.  Yet the modern FDA approval process still has several substantial loopholes.

Dietary supplements — A booming $170 billion dietary supplement industry  has been created to push vitamins and other harmless and ineffective dietary supplements. Doctors and public figures like  Joseph Mercola or Mark Hyman or Dr. Oz  have become quite wealthy by conning a scientifically illiterate public with supposed “miraculous” results pushed by  actors posing as patients in  supplement ads.      

Today, FDA’s Office of Prescription Drug Promotion reviews and regulates prescription drug advertising and promotion through surveillance activities and issuance of enforcement letters to pharmaceutical manufacturers. Advertising and promotion for over-the-counter drugs is regulated by the Federal Trade Commission. The FDA also empowers third-party enforcer-firms to engage in some regulatory oversight, e.g. the FDA expects pharmaceutical companies to make sure that third-party suppliers and labs abide by the agency’s health and safety guidelines.

The Dietary Supplement Health and Education Act of 1994 mandated that the FDA regulate dietary supplements as foods, rather than as drugs. Consequently, dietary supplements are defined as a kind of food under the statute, with the caveat that this does not exempt them from being treated as drugs in the way that other foods are exempted, if circumstances permit it.

Like other food substances, dietary supplements are not subject to the safety and efficacy testing requirements imposed on drugs, and unlike drugs they do not require prior approval by the FDA; however, they are subject to the FDA regulations regarding adulteration and misbranding.

Painkillers and false advertising  — In the 1990s, Purdue Pharma advertised their opioid painkiller, OxyContin, with statements such as “less than 1% of patients taking opioids actually become addicted;” that addiction to opioid medication is “rare”; and that the notion that “opioid addiction (psychological dependence) is an important clinical problem in patients with moderate to severe pain treated with opioids,” was a “myth.”

By 2020, half a million people were dead from opioid abuse, according to the CDC,  and Purdue Pharma pled guilty to criminal fraud. “OxyContin, which came on the market in the mid-90s, is seen as an early, ferocious driver of the opioid epidemic and Purdue is regarded as the architect of muscular, misleading drug marketing.” (NY Times,  Oct. 21, 2020).

Advertising Regulation in Europe 

Advertising regulation in Europe has traditionally been more paternalistic, yet advertising graphics tend to be far more explicit than in the United States. For example, ads for tobacco and alcohol are tightly regulated in Europe, and yet ads with nudity or suggestive themes are not considered as offensive to European tastes.  

UK advertising regulation was assumed by the Advertising Standards Authority, which consolidated advertising regulatory authority from television, radio, and print commissions in 1955. A  set of codes, developed soon afterwards,  is described as a mixture of self-regulation for non-broadcast advertising and co-regulation for broadcast advertising. Like US advertising laws, ads cannot be misleading or cause “physical, mental, moral or social harm to persons under the age of 18.”  

Controversies about advertising in Europe often revolve around attempts to maintain traditions amid an increasing internationalization of both advertising and language. For example, French advertising laws discriminated against non-French products until around 1980, when Scotch whiskey manufacturers sued France in the European Court of Justice.  The EU has rules to support traditionally located products, for example roquefort cheese and champaign in France,  feta cheese in Greece, or Melton Mowbray pork pies in Leicestershire, UK.   The Cato Institute, a conservative US policy group, questioned these regulations in a 2016 report.    Yet the US also has Vidalia (Georgia) sweet onions,  Florida orange juice, Tennessee bourbon, and Idaho potatoes under certification marks.