Corporate Practices

In our work to date, we have identified four corporate practices that influence health.

Production and design refers to business decisions about where to invest capital and the specific characteristics of a product. For example, the U.S. auto industry's decision to invest heavily in the production of SUVs in the late 1980s and early 1990s and to design a vehicle with a high center-of-gravity, low fuel-efficiency, and poor safety standards contributed to significant excess auto deaths and injuries (Bradsher, 2002). These decisions of U.S. automakers contrast with those made by the European and Japanese auto industries, which invested in smaller, more fuel-efficient sedans, illustrating that faced with similar economic and political circumstances, some companies make less harmful business decisions.

Marketing describes corporate strategies and activities to encourage consumption and increase market share and demand. It includes advertising, sales promotions, sponsorship of sports and music events — often particularly targeting those music events which appeal to many youth of color — product placement, viral marketing, and websites and Internet campaigns (Ewen, 1977; Hawkes, 2006). For example, Merck's heavy marketing of Vioxx through direct- to-consumer and physician advertising, its deployment of an army of detail men to encourage physicians to prescribe Vioxx (Topol, 2004;Hawthorne, 2003; Brown, 2004; Berenson, 2005)) and its advertising campaigns that implied that Vioxx was superior to safer over-the-counter medications despite the lack of evidence for such a claim (Avorn, 2006) helped to persuade an estimated 20 million consumers to use Vioxx before it was withdrawn, thus magnifying the product's adverse consequences on population health.

Retail distribution refers to industry practices that affect product availability at the consumer level. Placement of fast food outlets, supermarkets or liquor stores, legal or voluntary industry restrictions on who can purchase tobacco or firearms, or industry oversight of retail distribution of prescription drugs, firearms, or tobacco, the allocation of shelf space in supermarkets, and the disproportionate amount of advertising in Black and Latino and lower income urban neighborhoods are examples of decisions on retailing that affect product availability and therefore the impact on health.

Pricing practices determine who pays how much for a product and therefore influence access to harmful products. Companies and their retail affiliates decide how much to charge various sub-groups of customers, whether or not to engage in legal or illegal price-fixing, whether to oppose or support excise taxes, and how to relate to illicit markets (e.g., untaxed tobacco products). Successful efforts by the alcohol and tobacco industries to limit excise taxes contribute to heavier use of these products by low income and young people, again escalating the adverse health impact of these products. (Chaloupka et al., 2002a and b).

Avorn J. (2006) Evaluating drug effects in the post-Vioxx world: there must be a better way. Circulation. 113(18):2173-6.

Berenson A. In training video, Merck said Vioxx did not increase risk of heart attack. New York Times July 21, 2005, p. C4.

Bradsher, K. (2002) High and Mighty SUVs: The World's most Dangerous Vehicles and how they Got that Way (New York, NY: Public Affairs).

Brown, D. (2004) "Promise and peril of Vioxx casts harsher light on new drugs," Washington Post A14, October 3, 2004.

A Chaloupka FJ, Cummings KM, Morley CP, Horan JK. Tax, price and cigarette smoking: evidence from the tobacco documents and implications for tobacco company marketing strategies. Tobacco Control. 2002;11 Supplement 1:I62-72.

B Chaloupka FJ, Grossman M, Saffer H. The effects of price on alcohol consumption and alcohol-related problems. Alcohol Res Health. 2002;26(1):22-34.

Ewen S. Captains of Consciousness: Advertising and the Social Roots of the Consumer Culture. New York: Basic Books, 1977.

Hawkes C. Uneven dietary development: linking the policies and processes of globalization with the nutrition transition, obesity and diet-related chronic diseases. Global Health. 2006 Mar 28;2:4.

Hawthorne, F. 2003. The Merck Druggernaut: The Inside Story of a Pharmaceutical Giant. New York: John Wiley & Sons.

Topol, E. J. "Failing the public health — rofecoxib, Merck, and the FDA," The New England Journal of Medicine 351, no.17 (2004): 1707-1709.