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The Perils of Short-term Profiteering: U.S. Automakers Focus on SUVs Hurts Their Profits and Our Health

With record high gas prices dominating the news, Americans are finally facing the music. The big SUVs and pick up trucks that the US auto industry relentlessly promoted in the 1990s are now economically unsustainable, as well as more accident-prone and polluting than the sedans and compacts that have allowed the European and Asian auto industries to prosper. Though environmentalists have long argued that these vehicles are environmentally unsustainable, for more than a decade, SUVs and trucks had been the top selling vehicles in America. Of course, U.S. consumers shoulder some of the blame for the SUV and large truck craze that has left vehicles languishing in used car lots or drive ways as drivers shy away from a fill-er-up that can top $100. But in the 1990s, the US auto industry spent more than $9 billion on advertising to convince Americans the highly profitable SUVs were safer, more convenient and more manly than the alternatives. In this report Corporations and Health Watch examines how the US auto industry’s desire for short-term gain has led to plummeting profit margins and jeopardized the industry’s future viability while condemning American consumers to unsafe and polluting vehicles.

On the heels of the housing crisis and a declining economy, gas prices have set record highs this spring and summer, with the average price per gallon increasing by more than a dollar since February. As fuel prices rise, Americans are finding ways to cut back on fuel costs by walking and biking, taking public transportation, carpooling, limiting errand trips and curtailing summer travel plans. The Federal Highway Administration estimates that in April, the number of miles traveled on U.S. roads was down 1.8% compared to April of 2007, a reduction in miles traveled on public roads for the sixth month in a row. In March, the number of miles was down 4.3% as compared to a year ago and was the greatest decline in travel on public roads since 1979. At the end of June, MasterCard reported its ninth consecutive week in declining gas sales with overall annual gasoline declining for the first time in over 17 years.

Changes in US auto market

But U.S. consumers are making other changes too: they’re no longer buying as many SUVs and trucks, looking instead for smaller, fuel-efficient cars, a move Ford VP of marketing Jim Farley called “breathtaking.” In April 2008, one in five cars sold in the US was a compact or subcompact car, compared to one in eight a decade ago when SUV sales were booming. Pickup truck sales were down 5% overall from last year and Chrysler saw a 22% drop in SUV sales this year. In May, GM reported that overall sales plunged by nearly 28%. Marketing firm J.D. Power & Associates estimates that annual motor vehicle sales will be the lowest since 1995, with a decline of 1.2 million vehicles since last year.

Meanwhile, Japanese manufacturers report booming sales in many of their lines as hybrid vehicles and other fuel-efficient cars are in high demand. The Toyota Prius was the ninth best selling car in the United States in 2007, selling more than 64,000 of the hybrid vehicles and Toyota has now sold 1.5 million hybrid vehicles around the world and plans to sell one million a year after 2010. In May, Honda passed Chrysler in U.S. sales for the first time and Toyota became the number two American seller. In a first, during the same month, Detroit’s Big Three, GM, Ford and Chrysler, together held only 44.4% of the market share as compared to 48.1% held by Asian manufacturers. Toyota is close to passing GM as the world’s top auto seller.

To encourage sales of large trucks and SUVs, some automakers are offering incentive programs: Chrysler has offered buyers the opportunity to lock-in gasoline prices at $2.99 a gallon for three years and Ford announced it would offer “employee pricing” on their F-Series truck, which had previously been the most popular line of vehicles in the country for two decades. Past promotional sales of this kind have led to increased sales but lower profits, another example of the short-termism that has undermined the US auto industry. The Big Three of U.S. auto manufacturers have also cut back on production, with GM announcing it planned to close four North American plants to focus on bringing fuel-efficient vehicles to market.

New marketing and production strategies

U.S. automakers are also shifting their marketing and production strategies. For the last two decades, the SUV and the large truck were marketed to the U.S. public as all-around vehicles used for for hauling large or heavy items, for a quick trip to the store and for the family vacations. These oversized vehicles have also been painted as representing safety, security, power and prestige. Realizing the gravity of declining sales, analysts predict that manufacturers will have to reframe the way SUVs and large trucks are marketed, portraying them as supplemental and used for specific purposes, like hauling heavy loads and work. Manufacturers are currently highlighting SUV hybrids, trying to sell them as more fuel-efficient and environmentally sound. Finally, automakers are boosting production of “small crossovers,” or vehicles that look like SUVs but are built on car underpinnings. These moves suggest the U.S. auto industry is desperate to hang onto that sector of new vehicle sales that brings in the most profit, even as other auto makers have adapted to changing conditions.

However, Detroit’s Big Three are also diversifying their offerings, bringing more hybrids and smaller, fuel-efficient cars to the market. Alan R. Mulally, Ford’s chief executive, explained that current shifts are not temporary, but rather “structural in nature.” While some vehicles are new to the market, others are imported from overseas. General Motors and Ford, for instance, are adding smaller vehicles, such as the Saturn Astra and the Ford Ka, sold in Asia and Europe, to its United States offerings. Officials at Ford see the small car market as a growing one and estimate that global car sales will hit 38 million in 2012, up from 23 million in 2002. In the United States, Ford predicts 2012 small car sales of 3.4 million, up 25% from a decade ago. Manufacturers are also developing a number of new hybrid, ethanol-based and electric vehicles for the market. To compete with the Japanese manufacturers that dominate hybrid car sales and are developing electric cars, in 2010 GM plans to begin production of the Cheverolet Volt, a battery-powered vehicle with a small gasoline engine that allows for recharging.

While some are declaring the era of the SUV and large truck over, US manufacturers, as we have seen, are not ready to let go of the big-ticket items for the domestic market. G.M. plans to manufacturer large trucks and SUVs with diesel engines, claiming that this switch can increase the mileage of large trucks by up to 70%. Japanese maker Toyota remained confident in the recovery of the large-scale truck market, with group VP Bob Carter noting that those who needed larger vehicles would not be willing or able to make the switch to smaller cars.

Surprise or closed eyes?

Although auto analysts and environmentalists have been criticizing the US auto industry’s reliance on SUVs for more than a decade, Detroit’s Big Three seem unified in their shock and surprise at the rapidly declining sales in large trucks and SUVs. George Pipas, Ford’s market analyst stated, “This seismic shift in the marketplace has definitely taken us and everybody else by surprise.” Kelley Blue Book executive market analyst Jack Nerad suggested that top U.S. manufacturers saw a shift toward smaller, more fuel-efficient cars coming in years, not in months. Unlike the gas shocks of the 1970s and 1980s, automakers now hold that high oil prices are here to stay and that the shift toward smaller, fuel-efficient vehicles will be a permanent one.

But how much of a surprise is this shift? In Europe, the use of diesel engines has been standard as they are more fuel-efficient than those based on gasoline and new technology has reduced pollution through the development of cleaner burning engines. Given the current state of oil prices and auto sales, European manufacturers are increasingly looking to the U.S. as a market for the newer diesel engine cars. Japanese manufacturers, meanwhile, have long dominated the production and sale of hybrid vehicles, with Toyota introducing the hybrid in 1997. These manufacturers continue to develop new fuel-efficient and hybrid cars for the market. Nissan plans to introduce an electric car by 2010. European automakers are also shifting production toward even more fuel-efficient vehicles. French maker Renault has partnered with the California-based Project Better Place to produce electric cars for markets in Denmark and Israel with the Israeli government promising to cut taxes on the sale of these vehicles to promote their sale.

The Role of Government

But the decisions of U.S. vs. Japanese and European automakers also needs to be seen in light of the different relations between automakers and government. After the oil shocks of the 1970s and 1980s, European governments sharply raised fuel taxes and promoted the use of diesel by taxing gasoline at higher rates. After the crisis, European governments purposefully retained high fuel taxes to discourage consumption, thus encouraging the design and purchase of smaller, fuel-efficient vehicles as well as the use of public transportation – something more heavily supported by European governments that in the United States.

During the oil shocks, the United States witnessed the first ever fuel economy standards and reductions in speed limits. Small car sales in America increased temporarily with an attendant rise in fuel economy. When gas prices dropped, however, larger vehicles sales increased, due in part to heavy promotion. The United States was the only major developed nation to increase oil consumption during this period and not until this past spring, after 32 years, did Washington lawmakers again pass new energy laws requiring new cars and trucks, as an average, to meet a standard of 35 miles per gallon by 2020. With some of the lowest gasoline prices, lowest energy taxes and most fuel inefficient vehicles in the developed world, “about a quarter of the world’s oil goes to the United States every day, and of that, more than half goes to its cars and trucks,” reports the New York Times.

And in Japan, where fuel taxes resemble those of Europe rather than the United States, making small cars more popular, lawmakers have encouraged the sale of hybrid vehicles over the last decade by offering buyers a $3000 rebate for choosing the more fuel-efficient cars. Seven years before the United States pushed through stricter emission standards, Japanese regulators required manufacturers to achieve gas mileage of 35.5 miles per gallon by 2010. During the mid 2000s, sales of larger vehicles declined in Japan due to the passing of stricter diesel emissions standards that prompted Japanese manufacturers to shift away from the production of trucks or to look to the U.S. for markets. By and large, Japanese and European auto manufacturers who have not relied on big-ticket, large vehicles for the bulk of their profits are now not in the position of dealing with plummeting sales and growing inventories of vehicles. Currently, four out of ten of the fastest-selling vehicles in the U.S. are hybrids, with the Toyota Prius moving quickest with sales occurring, on average, just four days after arriving in dealers’ showrooms.

The China Solution?

Rather than taking a lesson from Europe and Japan, U.S. automakers are turning to China as a new market for big, gas-guzzling vehicles. According to the International Energy Agency (IEA), the world’s demand for energy will increase by 65% during the next twenty years with petroleum remaining as the top energy source. While the United States remains the top energy consumer, the IEA predicts China’s oil demand will double by 2030, with much of this increase being due to the increasing demand for cars. Between 1990 and 2006, the number of vehicles in China increased sevenfold and China now represents the second largest car market in the world and may overtake the largest market, the United States, by 2015. Given this, U.S. and other automakers are looking to China as a strong market for the SUVs and large trucks that Americans are now refusing to buy. During January and February of this year, sales of SUVs in China rose 38% as compared to one year ago. At a spring auto show in Beijing, executive VP of Shanghai General Motors – a partnership between GM and a Chinese partner – Robert Scocia stated “we’re all trying to get into this market.” Looking increasingly toward Chinese markets for growth, GM plans to sell and export over $1 billion in vehicles to one if its Chinese partners while Ford plans to sell over 30,000 vehicles plus transmission components in its own joint venture. However, China does not present an entirely rosy picture for manufacturers committed to producing these high-ticket, gas guzzling vehicles: the Chinese government is increasingly demanding that automakers increase fuel economy, including by producing electric and gasoline-electric hybrid cars. China also recently imposed vehicle taxes based on engine size. Despite these measures, however, China sets price controls on the price of fuel which helps increase demand for larger, fuel-inefficient vehicles associated with prestige as has been the case with the United States.

The World Health Organization reports that 800,000 people die each year from the effects of air pollution. A variety of diseases including cancer, asthma, cardiovascular disease and stroke have been attributed to air pollution. Under pressure from automakers, U.S. lawmakers, particularly under the Bush Administration, have lagged behind European and Japanese governments in passing stricter fuel economy standards and promoting the use of smaller, fuel-efficient cars by raising gasoline taxes. For almost two decades, U.S. automakers focused on the production and marketing of big-ticket, gas guzzling vehicles, contributing to increasing health and safety problems and contributing to global warming. The result: plummeting sales, massive lay-offs of workers and a serious threat to the future viability of the auto industry, previously a central force in the US economy.

In the last 30 years, US businesses have led a concerted and largely successful campaign to get government “off its back” and allow its executives and market forces to solve any economic and social problems that arise. The current plight of the US auto industry may lead some observers to question the wisdom of this strategy and to ask whether the US auto industry, its shareholders, US drivers and the environment would be in better shape today if government had provided more forceful oversight of its business decisions.

Tobacco and the 2008 Presidential Election

With all the political differences between Barack Obama and John McCain, few voters are likely to pay much attention to their differences on tobacco policy. Yet tobacco will continue as the nation and world’s top killer for the next few decades, making tobacco policy an important influence on health. In this report, Corporations and Health Watch reviews the major tobacco issues that the next President will face and analyzes the positions of Senators Obama and McCain on these subjects.

Tobacco decisions for the next Administration

After 2009, the President and Congress will need to decide several questions including:

  • Should the Food and Drug Administration be given the authority to regulate tobacco?
  • Should the federal government raise the excise tax on tobacco?
  • Should the United States ratify the global treaty that seeks to reduce the health burden from tobacco?
  • Should the Federal Trade Commission set new standards for tobacco marketing?
  • What should be the expectations of future Supreme Court justices on such issues as corporate rights, commercial free speech, and the government’s responsibilities for public health?

FDA and tobacco Congress is currently considering legislation to give the Food and Drug Administration oversight of tobacco products. According to the New York Times, the bill calls for the establishment of a new center for tobacco regulation within the F.D.A., gives the agency the authority to regulate the content of tobacco products and bans candy-flavored cigarettes. Recently, legislators have debated whether or not to also regulate menthol in tobacco. The Congressional Black Caucus has opposed a plan to drop menthol from the list of regulated additives, arguing that menthol cigarette advertising targets Black smokers and may exacerbate tobacco’s adverse health impact. The bill calls for the new FDA tobacco unit to be financed by tobacco industry fees projected at more than $5 billion over the next 10 years.

The FDA bill has bipartisan support, with more than 50 Senate and 215 House sponsors. Some Republicans have threatened to block further consideration of the bill and President Bush has not supported it. Big Tobacco has split on the bill, with Philip Morris endorsing it, in part, analysts say, because it will help PM consolidate its position as industry leader by restricting additional advertising. Reynolds American, the second largest tobacco company, opposes the FDA bill and has launched an advertising campaign charging that the FDA lacks the capacity to take on new responsibilities. The TV ads use a vaudeville style plate spinner to make the point that the FDA already has too many responsibilities on its plate.

Federal excise tax on tobacco Currently, the average state excise tax on tobacco is $1.13 (generating $14.5 billion in annual revenue), while the federal excise tax is 39 cents a pack (for annual revenues of $7.3 billion) (www.ryomag.com). Last year, President Bush vetoed the child health insurance bill that included a substantial hike in taxes on cigarettes. The next President and Congress will be hard pressed to find the revenues needed to support rebuilding public health and health care programs. In the current political and economic climate, where new taxes are opposed by many constituencies, tobacco taxes offer a popular source for new income.

Framework Convention on Tobacco Control In 2005, the Framework Convention on Tobacco Control (FCTC), the world’s first public health treaty, became international law. The treaty requires ratifying countries to enact proven measures to reduce tobacco use and its public health and economic burdens.

While the United States joined 167 nations in signing the FCTC, President Bush has yet to send the treaty to the Senate for ratification. In April 2008, Russia ratified the treaty, leaving the United States virtually alone among major nations that have not yet ratified. The next President and Senate will have to decide whether to maintain or change that status.

Federal Trade Commission and Tobacco Currently the Federal Trade Commission provides oversight of tobacco advertising. In the current administration, the FTC has generally favored industry positions on regulation of marketing. While changes in the FDA role may lead to changes in the FTC mandate, a new President and Congress could beef up the FTC. Through appointments, legislation and public pressure, the FTC could again become a force in tobacco control, as it had been at various points in the 1960s.

Supreme Court appointments In a recent analysis of the Supreme Court published in the New York Times magazine, George Washington University law professor Jeffrey Rosen observed that the current court is more pro-business than any in recent history. Even its more liberal members, he writes, regularly support corporate over consumer interests, a trend he attributes to a concerted 35 year effort to transform the court into the most consistently business-friendly branch of government. In 2007, for example, the Supreme Court over-turned an Oregon court’s $79.5-million punitive damages judgment against Philip Morris for its marketing of tobacco; Justice Stephen Breyer, one of the more liberal justices, wrote the majority opinion).

Any tobacco issues related to the FDA, federal taxation, changes in FTC policies or practice, commercial free speech, global treaties, liability litigation or other issues will likely eventually make their way to the Supreme Court. Thus, who the next President appoints and the Senate approves to sit on the Supreme Court will have a major influence on federal oversight of the practices of the tobacco industry. On Jan. 20, 2009, six of the nine Supreme Court justices will be over the age of 70.

McCain and Obama on Tobacco

Whoever wins the 2008 Presidential election, the next occupant of the White House will be a less dependable friend of the tobacco industry than its current resident. As Paul Billings, vice president of national policy advocacy for the American Lung Association, observed, This administration hasn’t been particularly positive on a tobacco-control agenda. Box 1 shows the responses the two candidates provided to the American Cancer Society Cancer Action Network’s (ASC CAN) question on tobacco control.

ACS CAN QUESTION: TOBACCO CONTROL

As president, will you work with Congress to enact legislation (specifically, S. 625/H.R. 1108) to rein in the most egregious manufacturing and marketing practices of the tobacco industry, and will you substantially increase the federal tobacco tax to help improve public health, save lives, and protect children from a lifetime of smoking?

ANSWER: John McCain, Republican
Responses provided by candidate

 John McCain has consistently supported regulation of tobacco products by the Federal Drug Administration and is an original cosponsor of S. 625, the Family Smoking Prevention and Tobacco Control Act. He also was a leading voice in Congress calling on tobacco companies to cease marketing campaigns for tobacco products that target children, such as the Joe Camel campaign. John McCain does not propose to increase tobacco taxes, believes that the more efforts should be made to provide educational and preventive media campaigns to discourage any American from starting to smoke, and will work to make smoking cessation programs more widely available.

ANSWER: Barack Obama, Democrat
Responses provided by candidate

I am a cosponsor of S.625 and support greater tobacco regulation at the federal level. In addition, I was an ardent supporter of reauthorization of the Children’s Health Insurance Program, which included a significant increase in the federal tobacco tax. As president, I will also increase resources for public health programs that tackle smoking, particularly for programs targeting children, individuals with mental illness and other vulnerable populations.

ANSWER: ACS CAN

ACS CAN, along with the prestigious Institute of Medicine and the President’s Cancer Panel, strongly supports giving the US Food and Drug Administration authority to regulate the production and marketing of tobacco products. Today, the tobacco industry markets its deadly products to children with impunity. Every day 4,000 kids try their first cigarette 1,000 of them go on to become regular smokers. Enacting S. 625/H.R. 1108 will prevent more kids from smoking and it will save lives. ACS CAN also supports substantially increasing the federal tobacco tax because we know that every 10% increase in the cost of a pack reduces youth smoking by 7% and overall cigarette consumption by 4%. 87% of lung cancer deaths are caused by tobacco use and more than 400,000 Americans still die from tobacco related causes every year. Sensible regulation of the tobacco industry and increasing cigarette taxes will save lives.

Credit: American Cancer Society Cancer Action Network

Candidates responses to surveys provide one source of information on their positions should they be elected; another comes from their legislative voting record.

McCain’s Record on Tobacco

In the late 1990s, Senator McCain led an ultimately unsuccessful effort to give the FDA a mandate to regulate tobacco in exchange for protecting the tobacco industry against liability claims. In retaliation, the tobacco industry helped to fund negative ads against McCain in the 2000 South Carolina primary election. His loss in that state helped to force him out of the 2000 race. Currently, McCain supports legislation to give the FDA the power to regulate tobacco although he has not spoken out forcefully on the bill.

In the past, McCain has also supported increases in excise taxes on tobacco. In 2007, however, with President Bush, he voted against a children’s health insurance bill that was funded in part by an increase in the federal tobacco excise tax, a funding source McCain now opposes.

Senator McCain has promised to appoint conservative Supreme Court Justices, pointing to Justices Samuel Alito, John Roberts and Antonin Scalia as models. As Steven G. Calabresi and John O. Mcginnis, law professors at Northwestern University, observed in an op ed in the Wall Street Journal, On judicial nominations, [McCain] has voted soundly in the past from Robert Bork in 1987 to Samuel Alito in 2006. It seems unlikely that a President McCain would appoint Justices likely to change the pro-business slant of the current court.

While the tobacco industry has not provided much support to Senator McCain’s Presidential campaign, former tobacco industry lobbyists play key roles in his campaign. Charlie Black, a top campaign aide, was formerly director of BKSH and Associates, one of Washington’s most powerful lobbying groups. According to Open Secrets, since 1998 BKSH earned almost $1.3 million in lobbying fees from Philip Morris. Black’s wife, Judy Black, also an adviser to McCain, was a former executive of the Tobacco Institute, the research arm of the tobacco industry until the Master Settlement Agreement forced its dissolution. Black rejects charges that his former work for tobacco companies disqualifies him to work on McCain’s campaign. I think you can change professions and unless you did something unethical or criminal, your past profession should not be injected into the candidate’s campaign, he said. It’s absurd.

Obama’s Record on Tobacco

Senator Barack Obama has recently quit smoking, claiming that his wife would not let him run for President until he did. His policy positions on tobacco, however, date back to his time in the Illinois state Senate. According to a recent review of Obama’s legislative record on tobacco by Clifford Douglas, the Executive Director of the University of Michigan’s Tobacco Research Network, Barack Obama has:

  • With nine other Senators called on President Bush to send to the Senate for ratification the Framework Convention on Tobacco Control
  • Served as one of the original co-sponsors of legislation to give the FDA the authority to regulate tobacco products and marketing
  • Voted in support of the Display of Tobacco Products Act that makes it illegal to sell or give away tobacco products in self-service settings
  • Co-sponsored an Illinois state bill to use money from the Tobacco Settlement Recovery Fund to support a comprehensive tobacco use prevention program.

None of Obama’s current staff have been found to have worked for the tobacco industry and Obama voted against confirmation of Supreme Court Justices Alito and Roberts. In a recent analysis of the Presidential candidates positions on Supreme Court appointments in the Columbia Journalism Review, Zachary Roth wrote:

For instance, on the issue of the appropriate balance between corporate and individual rights: the press should make clear that Obama’s appointees, in keeping with his desire for empathy, can be expected to take a broader interpretation of laws designed to protect individuals; while McCain’s, if they are indeed in the Roberts-Alito mold, will interpret these laws more narrowly, and more often come down on the side of corporations.

However, whether Barack Obama will appoint Supreme Court Justices (or whether the Senate will confirm them if he does) who can reverse the pro-corporate tilt of the current court and restore a more balanced consideration of the rights of consumers and public health remains an open question.

2008 Election opportunities for tobacco control advocates?

In summary, the 2008 Presidential election campaign offers voters two major party candidates who are likely to provide somewhat more support for tobacco control than the current administration. Unfortunately, it seems unlikely that tobacco control will surface as a major campaign issue. By understanding the similarities and differences between Senators McCain and Obama on tobacco, by linking the issue of tobacco control to debates on health care policy, and by encouraging the candidates and the media to focus on their plans for the Supreme Court, tobacco control advocates may find some windows of opportunity to advance their cause.

View CHW’s coverage on Corporations, Health and the 2008 Presidential Race: Part 1: Following the Money
Part 2: Clinton, Obama and McCain on the Role of Corporations
Part 3: Clinton, McCain, Obama and the Food Industry
Part 4: Fixing the FDA: Options for the Next President

Corporate Research: The Basics

Corporations frequently lack the transparency necessary to reveal their sheer size, power, influence and effect on individuals, institutions, and organizations. The food and beverage industry, for example, are powerful players throughout the entire food and agricultural system. They use their power to influence policy, food prices, food produced and ultimately the food and beverages available to us, whether it’s at home, in schools, at work, or elsewhere.

Public health advocates, policy makers and others interested in influencing these choices would benefit from understanding corporate decisions and practices underlying our food system. Although it is a complex and oftentimes daunting process, resources are available to help unwrap corporate practices and related outcomes.

The guidelines and resources outlined below are useful for any number of industries and issues.

Corporate Research requires digging. To begin, start with any of these helpful sites.

  • The Corporate Research Project of Good Jobs First has put together a step-by-step guide on how to do online corporate research.
  • CorpWatch has a step-by-step guide to corporate research available.
  • Crocodyl (see resource description below) also has a step-by-step guide to corporate research, available as a pdf.

It’s easiest to illustrate how to do corporate research with an example. Let’s say we’re interested in one company’s commitment to 1) locally grown food and 2) employee health care. And let’s take Wal-Mart as an example.

A useful starting place are these selected (and free) company reports (described in more detail on the websites above).

1. Company website includes, at least: 
- General description of activities
- Press Releases

2. Annual Report includes, at least:
- Financial data
- Operations
- Employees

3. 10-K (filed with the Securities and Exchange Commission) includes, at least:
- Detailed description of the company’s operations
- Summary of the firm’s competitive and regulatory climate
- Description of the company’s facilities
- Data on the company’s workforce, which often includes information on the extent to which the     workers are unionized and which unions represent them
- Overview of the main legal proceedings in which the company is involved 
- Account of environmental issues relating to the company’s operations
- List of the company’s subsidiaries

Sourcecorp-research.org

Wal-Mart and Local Foods

1. Company Website Contains a “Health and Wellness” section
- The “Products” section under the sustainability link contains a statements about locally grown food.

Local Foods Statement:

“As the largest grocery retailer in the United States, we see a responsibility and an opportunity to promote more sustainable practices in the food and agriculture industries. One of the most important steps we can take is reducing food miles by selling locally grown produce in our stores.

In the United States, it is estimated that produce travels an average distance of 1,500 miles from farms to the homes of customers. This not only results in higher fuel costs, but can hurt rural communities where agriculture is the backbone of the economy.

To help reduce the number of miles food travels and help support rural communities, Wal-Mart has introduced a “Food Miles Calculator,” which allows our buyers to enter information on each supplier and product, determine product pick-up locations and select which of our 38 food distribution centers the product will reach. With this information, the calculator computes the total food miles, which the buyer can use when making buying decisions.

To further reduce food miles, we’re buying more produce locally, especially items like potatoes, tomatoes and peaches. We are also working with state departments of agriculture and suppliers to develop growing areas for products like corn in Mississippi and cilantro in Southern Florida which had not grown there before. Not only will these efforts save food miles, but they will provide our customers with fresher products.”

Sustainable Agriculture Fact Sheet includes additional statements about local food.

- Press Releases

- A 2007 press release reveals that “Wal-Mart to Fund Environmental Research at the University of Arkansas Applied Sustainability Center.”

2. 10-K/Annual Report (contains much of the same information)

- Lacks information regarding both local foods and sustainable agriculture
- Financial data reveals the revenue from specific types of stores as well as the relative size of   grocery sales and health and wellness sales, as compared to other merchandise categories:

  • Sales from Discount Stores (average 108,000 square feet) in the U.S.: 971 million
  • Sales from Supercenters (average 187,000 square feet) in the U.S.: 2,447 million
  • Sales from Neighborhood Markets (average 42,000 square feet) in the U.S.: 132 million
  • Grocery: 39% 2007; 41% 2008
  • Health and Wellness: 9% 2007; 9% 2008
  • Other categories include: health and beauty aids, apparel, shoes and jewelry, home, entertainment, electronics and toys, and seasonal and hardlines.

It’s also important to check out corporate watchdog sites. Oftentimes these sites can compare corporate rhetoric to corporate reality.

The Crocodyl site (as described below) includes this information about Wal-Mart’s international labor conditions:

- Labor: Wal-Mart has been criticized for sourcing from international suppliers who violate workers’ rights. The International Labor Rights Forum has claimed that Wal-Mart sources from suppliers who used forced labor, violate minimum wage and overtime laws, deny maternity leave, deny health care and bathroom breaks and deny workers’ rights to form independent unions. As a result, the company was sued in 2005 by the International Rights Advocates on behalf of workers from China, Bangladesh, Indonesia, Swaziland, and Nicaragua. Wal-Mart’s purchasing and auditing policies have been blamed for their continued sourcing from factories which violate workers’ rights. 
- Although this information isn’t directly related to local foods, a researcher could use this information to discuss the consequences of purchasing goods internationally.
- Other Wal-Mart specific watch dog sites are included on the Crocodyl site.
- 23 Organizations Issue Joint Report Critiquing Wal-Mart’s Sustainability Initiatives.

Wal-Mart and Employee Health Care

Health professionals and labor organizers may be especially interested in Wal-Mart’s commitment to employee health care. If we take the same resources as above, we find the following information from the company website, the Annual/10-K reports and corporate watchdog sites.

1. Company Website

The Health and Wellness section provides statements related to employee health care.

Our Associates

As an employer, providing our associates and their families with health care coverage is a priority for Wal-Mart. We are continually working to expand affordable access to care for our Wal-Mart and Sam’s Club associates and their families.

The Associate Health sub-section of the Health and Wellness section states the following:

Peace of mind

We work hard every day to make sure that all of our associates – and their children – have access to affordable, high-quality health care coverage.

Different plans for different needs

We also work hard to make sure our health care benefits can meet many different needs and lifestyles. Our associates range from full-time employees supporting a family, to seniors who returned to the workforce for supplemental income, to students looking for first-time job experience. And, their health care needs are as diverse as they are.

More than just health care coverage

A big part of affordable health care is affordable medicine. We offer more than 2,000 generic prescription drugs for $4 to associates who participate in our plans. To help our associates make healthy choices, we provide a variety of health and wellness information at walmartbenefits.com. We have 24-hour hotlines that provide counseling and nutritional information. All of our associates receive discounts on fresh fruits and vegetables, plus in-store health screenings and wellness events.

Award-winning programs

Our company received in May 2008 the Best Employers for Healthy Lifestyles Gold Award from the National Business Group on Health (NBGH) for the work that our associates and our company have put in place to promote a work environment that encourages associates to live healthy lifestyles. We were one of 52 employers in the country to be honored for our commitment to health, productivity and the well-being of our associates and their families.

Specific information related to medical benefits.
Specific information related to health and wellness services
Fact sheets related to Associate benefits.

- Press Releases

- A May 2008 recent press release “National Business Group on Health Honors Best Employers for Healthy Lifestyles – 52 Employers Recognized for Promoting Healthy Workplaces” discusses Wal-Mart’s commitment to a healthy workplace.
- A January 2008 press release, “Open Enrollment Data Shows That 92.7 Percent Of Wal-Mart Associates Now Have Health Coverage.”

2. Annual Report/10-K

One of the sections within the 10-K report identifies risk factors related to corporate growth. One risk factor is identified below.

Failure to attract and retain qualified associates and other labor issues could adversely affect our financial performance.

Our ability to continue to expand our operations in the United States and abroad depends on our ability to attract and retain a large and growing number of qualified associates. Our ability to meet our labor needs, including our ability to find qualified personnel to fill positions that become vacant at our existing stores, clubs and distribution centers, while controlling our associate wage and related labor costs, is generally subject to numerous external factors, including the availability of a sufficient number of qualified persons in the work force of the markets in which we are located, unemployment levels within those markets, prevailing wage rates, changing demographics, health and other insurance costs and changes in employment legislation. If we are unable to locate, to attract or to retain qualified personnel or if our costs of labor or related costs increase significantly, our financial performance could be affected adversely.

3. Corporate Watchdog Sites

Wal-Mart Watch tracks Wal-Mart practices around many issues, including health care. Here is a statement from the organization’s website: Despite numerous tweaks to their health plan, Wal-Mart simply cannot offer an affordable plan to cover its workers. Lagging behind industry averages, Wal-Mart’s employees are subjected to unnecessary charges and fees; wait longer for coverage eligibility, and are forced to seek out public health programs to fulfill their health care needs. The Susan Chambers’ memo, released in October 2005 by Wal-Mart Watch, reveals how Wal-Mart executives value saving a buck over the health of their workers. With less than 50% of associates choosing to participate in their plans, the Wal-Mart health plan is simply not working.

Additionally, the website states:

Over half of Wal-Mart workers fall through the company safety net

- Fewer than Half of Employees Covered. According to Wal-Mart’s own website, “In January 2006, the number of associates covered by Wal-Mart health care insurance increased to 46%.” [Walmartfacts.com]
- Coverage Lags Far Behind National Average. Nationally, 63 percent of workers in large firms (200 employees or more) receive their health benefits from their employer. More than 80 percent of Costco workers are covered by their company plan. [Employer Health Benefits 2006 Annual Survey, The Kaiser Family Foundation and Health Research and Educational Trust; New York Times, 10/24/05]
- Neither Affordable Nor Accessible. Wal-Mart provides health care options to their employees and families that have a deductible of $1,000 for individuals and $3,000 for families. Wal-Mart employees must endure long waits to qualify for benefits: six months for full-time employees and one year for part-time employees. [Wal-Mart 2006 Associate Benefits Book; Wal-Mart Press Release, 4/17/06]
- Waiting Too Long to Qualify. The Wal-Mart average for full-time workers to qualify for benefits is six months, compared to the retail average of 2.7 months and the average waiting period for large firms (200 or more workers) of 2 months. [Wal-Mart 2006 Associate Benefits Book; The (Montreal) Gazette, 4/18/06; Employer Health Benefits 2006 Annual Survey, The Kaiser Family Foundation and Health Research and Educational Trust]

Too Many Hurdles

Obstacles to coverage abound — and workers sometimes give up trying:

- Hidden Charges. The Wal-Mart 2006 Associate Benefits Book details the specific policies of the Associate Medical Plan (AMP) and reveals that the plan is filled with additional charges. Standard services – including office visit co-pays, emergency room visits and ambulance services, per-event deductibles, and pharmacy co-pays — are not applied toward the standard deductible. For example, in addition to the standard deductible, a $300 pharmacy deductible must be reached, a $1,000 in-patient facility deductible per visit must be paid, and a $500 out-patient surgical facility deductible per visit must be paid. [Wal-Mart 2006 Associate Benefits Book, pp. 32 and 38]
- High Out-of-Pocket Premiums. According to the Center for a Changing Workforce, in 2003, Wal-Mart employees paid 41% of insurance premium costs. At the time of the report, Costco employees paid about 10% of premium costs. Nationally, workers today pay an average of 16% of premiums for single coverage and 27% of premiums for family coverage. [Employer Health Benefits 2006 Annual Survey, The Kaiser Family Foundation and Health Research and Educational Trust; Wal-Mart and Healthcare: Condition Critical, Center for a Changing Workforce, 10/26/05]
- Less Money for Benefits than Other Firms. In September 2003, Wall Street Journal reported, “Last year, average spending on health benefits for each of the company’s roughly 500,000 covered employees was $3,500, almost 40% less than the average for all U.S. corporations and 30% less than the rest of the wholesale/retail industry, according to estimates by Mercer Human Resource Consulting, a unit of Marsh & McLennan Cos.” [Wall Street Journal, 9/30/03]
- Confusing to Even the CEO. In a speech before the National Governors Association, Wal-Mart CEO Lee Scott “conceded that one of Wal-Mart’s new efforts, the introduction of health savings accounts, had gotten off to a slow start because setting up the accounts was ‘too complicated.’ He said he found the process confusing and had not yet set up his own account.” [New York Times, 2/27/06]

More on health care at Wal-Mart

A New York Times article from June 4 2008, Wal-Mart’s Detractors Come in From the Cold, discusses Wal-Mart, health care and Wal-Mart’s watchdog groups.

Resource Description: Crocodyl

Crocodyl is an incredibly useful site with rich and continuously updated data. A more specific resource description of Crocodyl is included below.

Crocodyl is a collaboration sponsored by CorpWatch, the Center for Corporate Policy and the Corporate Research Project. Our aim is to stimulate collaborative research among NGOs, journalists, activists, whistleblowers and academics from both the global South and North in order to develop publicly-available profiles of the world’s most powerful corporations. The result is an evolving compendium of critical research, posted to the public domain as an aid to anyone working to hold corporations increasingly accountable. — www.crocodyl.org


The Audience

This site is helpful for anyone engaged in corporate research. It is useful for those learning how to do research, for those interested in tracking companies, and for those wanting to publicly post information about companies.

The information on Crocodyl is similar to any Wiki page – anyone can post and/or change information on the site and it is accessible free of charge. Given that most corporate research is done by market researchers and is frequently expensive to obtain, this publicly available resource is a great alternative.

Navigating the site

“How to Use this Site” 
Publishing a company profile: Company Profile Research Guide to steer researchers through the process of documenting company profiles. Contains many online resources. 
Creating a company profile on Crocodyl: Online tutorial to teach users how to create a company profile.
Tracking changes on a page: “Subscribe” to a page and track any changes made to a company profile(s).

“Editorial Policy”
Postings to the site are initially limited to a core group of contributors and fact checkers. In the future outside users will be allowed to post information and the core group will serve as editors, fact checkers and contributors. For more information, see the site’s Editorial Policy.

“Research Tools”
A useful list of resources to guide corporate research. Includes links to Basic Company Information, NGO Research Sources, Government Sources and Electronic Research Methods.

“Digital Records”
Photographs, scanned news stories and other multimedia files posted here.

“Community”
A list (and links) to contributing organizations. 
A link to an email list homepage. Email list allows anyone to join an open forum to learn more about the site, to discuss a new idea, or pose a question or comment.

“For Whistleblowers”
Contains different ways to anonymously submit a file, leak a document, and more.

“Featured Profiles”
A list of company profiles featured on the Crocodyl site.

“Industries”
Company lists categorized by industry. To date, industries include:
- Chemicals
- Construction
- Energy
- Financial Services, Insurance & Banking
- Food & Agriculture
- Manufacturing
- Media & Entertainment
- Natural Resources
- Pharmaceuticals
- Retail & Mega-stores
- Technology & Telecommunications
- Tobacco & Alcohol
- Tourism & Real Estate
- Transportation
- War & Disaster Profiteering

“Issues”
Company lists categorized by issue. To date, issues include: 
- Consumerism & Commercialism
- Corruption
- Environment
- Free Trade
- Globalization
- Health
- Human Rights
- Labor
- Management & Executives
- Money & Politics
- Privatization
- Regulation
- Tax issues
- World Financial Institutions

Company profiles vary by company and are based on the information that is both available and subsequently posted by contributors. Profiles tend to include, among others: 
- Company snapshot
- Accountability overview
- Tax issues
- Labor issues
- Environment and product safety
- Human rights
- Political influence

The tabs at the top of the site include: 1) directory of all company profiles, 2) links to existing corporate research, 3) ongoing chat sessions and 4) a widget that can be linked to a website or blog.

View other resources reviewed and recommended by Corporations and Health Watch.

 

Chips and Chocolate: Competing Interests on Cornell’s Campus

Students and staff in the Division of Nutritional Sciences at Cornell University worked with Cornell Dining and the vending company to improve the nutritional quality of foods in the Division’s vending machine. The paper below outlines the background leading up to these changes, the process undergone to implement these changes, selected results and findings, as well as lessons and challenges learned along the way. The project is still ongoing and Cornell University is now looking to roll out healthier vending items throughout the rest of Cornell’s campus.

Background

The vending machine in Savage Hall, Cornell University’s home to the Division of Nutritional Sciences, has traditionally stocked common vending foods – highly processed candy bars, chips, chocolate, gum and other products of poor nutritional quality.

Next to the snack food vending machine is a beverage machine selling the typical array of soda and juice. It is from these two – the food machine and the beverage machine – that one can buy a quick snack. Students, staff and faculty can bring food and leave it in the refrigerator in the adjacent room but if one wants to purchase something on the spot, they are left with a set of unhealthy food choices. This easily accessible, cheap, unhealthy food created an unhealthy food environment in the Division of Nutritional Sciences.

Actions and Outcomes Prior to Changes in the Vending Machine

Graduate students in the Division of Nutritional Sciences decided to take on improving the healthfulness of this food vending machine. It was, more than anything, embarrassing to host visitors, only for them to see this machine as the center piece of our dining area. We began this endeavor, working with Cornell Dining and the vending company, to improve the offerings in this machine.

A vending team consisting of two graduate students and a Senior Extension Associate was formed to spearhead this effort. Once the team was formed, a few crucial events and information gathering sessions occurred. Selected events and outcomes below.

– The vending team conducted research to learn about the vending contract between the Division, Cornell Dining and the vending company. The Division of Nutritional Sciences has a contract with Cornell Dining and Cornell Dining has a contract with a specific vending company.
– The vending team approached Cornell Dining to see whether or not it would be possible to include healthier offerings in the vending machine. Cornell Dining and the vending company agreed that Savage Hall could serve as a pilot program for healthier offerings in vending machines throughout campus.
– Cornell Dining asked the vending team for a set of food standards that could guide the healthier options. The vending team used standards already in place in multiple school districts (and similar to those in the not yet published by the Institute of Medicine’s Nutrition Standards for Food in Schools Report).
– The vending team met to assess products brought forth by the vending company, as possibilities for the updated machine. Cornell Dining and the vending company decided that the entire machine would be healthier options, removing all traditional vending options (with the exception of gum and mints). In addition to healthier options, nutrition facts for each product were posted on the outside of the vending machine.
– The vending team emailed the Division of Nutritional Sciences (faculty, staff and graduate students) soliciting feedback about preferred foods and to increase awareness of project.
– The vending team met with Cornell Dining and the vending company to go over email responses, list of foods presented to the vending team and to determine a timeline for the implementation of healthier foods.
– The vending team provided Cornell Dining and the vending company with a prioritized list of foods (from the initial list they provided to the vending team). Cornell Dining asked the vending team to provide a “wish list” of healthy foods and their respective brands.
– Phase 1 of the project, the healthier food line-up, began at the beginning of the fall semester and lasted until mid-October.

Results: The Product Line-Up for Phase 1 and 2

Phase 1 (August 2007-January 2008)

Foods included: Sun Chips, Smart Food popcorn, baked chips, crackers, pretzels, rice snacks, Oreo Thin Crisps, trail mix, Nutter Butter Bites, peanuts, tuna, fruity snacks, Snackwell’s sandwich cookies, Fig Newtons, granola bars, Nutrigrain bars, sunflower seeds, oatmeal, sugar-free wafers, graham crackers and animal crackers.

These food options remained in place until mid-January, at which time Cornell Dining and the vending company reevaluated the offerings.

Phase 2 (January 2008-March 2008)

Selected products were changed based on availability. The vending company adds “Balanced Choice” labeling.

“Balanced Choice” label affixed to specific foods based on vending company’s supplier. A “green leaf” sticker on a slot in the vending machine indicates a “Balanced Choice” and meets the following nutritional criteria:

  • 7 net grams of fat, or less
  • 260 calories, or less
  • 250 mg of sodium, or less

Phase 2 sales results: For the periods 1/22/07 – 2/15/07 vs. 1/21/08 – 2/15/08, sales transactions were down by 17%, and dollar value of sales were down by 9%. According to Cornell Dining, the machine could not sustain itself with phase 2 sales and product line-up.

Phase 2 sales were compared to vending sales throughout the rest of Cornell and it was determined that the drop in sales might not be due solely to healthier options. Sales also declined for traditional vending machines.

Results: The Survey

The vending team conducted a survey during Phase 2. Thirty individuals completed the survey; 100% of respondents were from within the Division of Nutritional Sciences, 58.6% were graduate students, 6.9% were faculty and 37.9% were staff. The information below represents selected survey responses.

69% of respondents noticed changes in the vending machine. In response to an open- ended question, some changes noticed included:

– Healthier and more hunger-satisfying options – I can now count on finding something I want to eat, at least when it is stocked (which it often isn’t).
– Changes disguised as healthier options but still same old companies with same old corn syrup and allergens.
– Healthier better foods!!
– The tuna fish caught my eye–love it.
– The selection has narrowed somewhat — mostly chips and crisps, mostly high sugar low fat. The high-end entrees are nice though (oatmeal, tuna).
– Nutritional info on the vending machine, 100-cal packs.

29/30 respondents noted additional food or beverage items he/she you would like to see offered in the vending machine. In response to an open-ended question, some desired foods included:

– A trail mix with something sinful in it, ideally bits of chocolate. whole grain crackers (maybe there are some and I just haven’t caught them stocked?). chocolate covered coffee beans (beans are vegetables, right?). reduced fat/salt chex mix. snyder’s honey wheat prezels.
– Organic chocolate.
– More types of nuts and dried fruit varieties.
– CHOCOLATE! Not a lot, nothing crazy — peanut m&m’s or hershey bars…plain good old chocolate.
– Fruit leather.
– Stacys brand pita chips. annies brand cheddar bunnies. fruit leather. small packs of chocolate covered raisins or some other kind of lower fat candy options. any kind of kashi tlc cereal bar or snack chip.
– More chocolate the choices are very bad. Here’s what I think I’m an adult and don’t need someone tell me what I should and shouldn’t eat, I can make the decision myself. I like having healthy choices but bring back the candy. If I’m going to eat bad make it dark chocolate not poptarts.

There were many suggestions for fresh fruit, yogurt, bagels, and other refrigerated items we were unable to stock. There were also suggestions for beverage changes. Our intervention did not alter the beverage selection in any way.

Respondents where then asked the importance of 1) brand, 2) personal preference, 3) health, and 4) price in making purchasing decisions on a scale of 1 to 5, with 1 being least important and 5 being most important.

34.5% of respondents ranked brand as the least important in making a purchasing decision. Personal preference was ranked highest by 51.7% of respondents. Somewhere in between these two variables were health and price.

Respondents answered an open-ended question that asked about their top three most frequently purchased items. Selected answers are listed below.

 

Most Frequently Purchased Items Why Purchased Most Frequently
Nut/fruit mix, crackers, granola bars. Satisfy hunger and, in the case of granola bars, also a sweet tooth. not too awful health wise.
Water, baked chips, nuts. Those are the only things I would eat from the vending machine. I don’t like chocolate bars or regular chips.
M&Ms. Need chocolate at work.
Nutrigrain bars, low fat microwave popcorn (when it was available). I don’t really eat potato chips or packages of cookies, so low fat versions of those items aren’t appealing to me. If fruit/veggies/yogurt, etc were available, I’d be buying that instead.
I would buy candy if it was there. Chips. No other choices. Extra comment. I am an adult I don’t need Cornell Dining telling me I can’t have something by not providing it. Currenty I have to walk to another building to get what I want. Takes away from my job and is inconvenient. Please make the vending machines for EVERYONE not just what you THINK I should eat. I can do that myself. Also parents send their kids to us because they are smart and ready to make their own choices. I don’t think we should police what they eat, after all we aren’t their parents.

Choices yes but no choices no.

Dairy sandwich (or closest alternative). Because I need energy (and food) to be able to study at school, with least time spent in going to and coming back from home.
Pretzels (any kind); granola bar (crunchy); popcorn. Low in fat, sustaining, nice snacks.
Nuts, popcorn, trail mix. They are the least processed and the ones that will not compromise me in terms of allergies.
Trail mix. Only recognizable ‘whole’ food available.
Natural nut mix, baked Lays. They make me feel better rather than worse after I eat them. They do not have trans fats or too much sugar.
Fruit chips fruit and nut trail mix. They are cheap and healthy.
Water, diet soda. No cal.
Strawberry yogurt bars. I love the taste. Cheap.
Mixed nuts, popcorn, pretzels. I like them.
Popcorn (much prefer the low fat version when it is in the machine), Coke, Baked Lays Potato Chips. Popcorn can be shared. Coke tastes yummy.
Peanuts, wheat thins, tuna and crackers. They taste good and are reasonably healthy.
Tuna, chips (baked lays), granola bars (crunchy quaker– not gooey kind). Dessert for lunch late afternoon snack; chocolate needs no explanation.
Popcorn; pretzels; granola bars. Volume of food; fat content; satiety.

Results: Product Line-Up for Phase 3

Phase 3, March-May 2008

The vending company reinstated some of the traditional snack items, and included more chocolate and fruit (dried or as chips). More chocolate and fruit were a reflection of the survey results.

More specifically, Phase 3 eliminated the 10 or so worst-selling items from the Phase 2 healthier food line-up. 10 or so high-selling traditional snack items were reintroduced into the machine. 2/3 of the items, then, were healthier items and approximately 1/3 were traditional snack products.

Phase 4, May 2008-Present

Cornell Dining and the vending company are meeting to review the current food line-up in Savage Hall and to implement selected high-selling healthier options in other vending machines around Cornell’s campus.

Challenges, Concerns and Lessons Learned

Defining “Healthy”

Establishing a definition for “healthy” is complex and can take many forms, making it difficult to determine a set of food standards. The vending team confronted tradeoffs and unknowns beyond nutritional quality such as feasibility, taste, and likability. Some of the questions asked included:

– What may be realistic guidelines?
– What guidelines would align with consumer preferences?
– Is it necessary to cater to consumer preferences, or should improved health and well-being be maintained as the ultimate goal?

The vending company decided that the new machine was to include only healthier foods that met a minimum standard. Previous experience with pilot projects have showed that altering only selected foods is not an accurate indication of the potential for healthier food sales. If the entire machine is overhauled, consumers may be more apt to buy these healthier items.

Contractual Obligations

Contractual obligations between the Division of Nutritional Sciences, Cornell Dining and the vending company constrained the vending team’s ability to source from other healthy vending (see www.yonaturals.com, for example) companies.

Consumer Demand

Because the vending machine is located in a nutrition building it may not be indicative of potential healthier food sales throughout the rest of campus.

Baseline demographic data of those that bought and did not buy food from the vending machine was unknown. This made it difficult to know whether or not the same individuals used the vending machine before and after the implementation of healthier options.

The vending team also confronted internal challenges. After sending an initial email to the entire Division of Nutritional Sciences soliciting feedback about preferred healthy options, staff, faculty and graduate students responded.

Below are selected responses, highlighting the spectrum of consumer demands:

- Thanks for doing this. How about (1) bagels, (2) milk (including skim), (3) yogurt, and (4) fruit (if the quality is good).
– What a wonderful initiative. However, some of us still want need our occasional Snickers/Twix, etc.! Don’t obliterate junk food completely – please.
– Best wishes with the negotiation with vendors.

These responses, ranging from a desire to keep the status quo to encouragement and demand for healthier options, raise a number of questions.

– Should nutritionists, or those working in a nutrition department, eat (or be expected to eat) differently than people in other departments?
– Should selected nutritionists impose these changes on other nutrition and non-nutrition staff working in the building?
– Is it our job to be a role model for other departments? Given the great amount of support for these healthier changes, we may wonder whether there is a stigma attached to eating junk food in the nutrition department.
– Perhaps individuals want the current food offerings but fear being shunned by fellow nutritionists?
– Do nutritionists eat differently elsewhere, in the privacy of their office or home?

Transparency and Availability

The entire list of in-stock and special order foods was never made available to the vending team. Instead, Cornell Dining and the vending company reviewed the vending team’s food standard and product suggestions and approached the vending team with a range of choices, pre-selected from an unidentified master list. The process of selecting foods from this master list of in-stock foods remains unknown.

Although it was clear that Cornell Dining and the vending company were invested in this project, the updated vending machine was severely constrained by the healthier options available. From the food lists the vending team was privy to it was clear that the healthier foods were healthier than traditional vending foods but would still be considered junk food by many health professionals.

This raised additional questions:

– Were there items that were healthier that they had in stock but hadn’t been reviewed by the vending company?
– Does the vending company have a contract with certain brands that limits our ability to get a greater array of healthier foods in the machine?
– If we did have to special order foods, how would it impact the price of products in the vending machine

In order to have even healthier foods, such as whole fruit or milk, the vending company would have to special order them, the machine would require refrigeration and/or the Division would have to work with a different company.

Truck drivers stocking the machine may also influence the availability of healthier options in the machine. Because the vending machine in Savage Hall is different from the rest of Cornell’s campus, the truckers have an added step to ensure what they stock in Savage Hall is indeed what the vending company, Cornell Dining and the vending team has agreed on. This required the truck drivers to set apart Savage Hall foods from the rest of the vending foods. The vending company told us that the drivers may try to “cheat” – that if there was a food that didn’t belong in the machine to notify Cornell Dining. It is easier for the truckers to stock the machine with the same traditional snack foods they use to stock the other machines on campus.

As noted previously, Phase 3 plans do allow these drivers increased flexibility.

A Financial Bottom Line

The vending company is open to stocking healthier items but this is largely because sales may decrease with increased consumer demand for healthier options. Additionally, school wellness policies require healthier options in grade school, forcing companies to make significant changes to their product line-up. The distinct school wellness policies between districts results in a series of fragmented policies and a food industry that can no longer use one standard to determine the specific products available in vending machines. They don’t know what sells, they don’t know which foods may be considered healthier, and importantly, they don’t know how to market themselves. The healthier vending machine in Savage Hall provided an opportunity for this vending company to pilot healthier foods and to ultimately improve their current and future bottom line. The implementation of these school wellness policies, although unfunded, has had a positive impact on vending company buy-in.

Final Thoughts

We all know we are supposed to eat healthfully and exercise regularly. But translating theory into practice involves a deeper and more nuanced understanding of the values at play, the politics of the situation, consumer demand and perhaps most of all, the distinct group of stakeholders involved in the decision-making process.

Mainstream thinking is that nutritionists tend to frame policy decisions around science. We view experts as credible, our science as facts and improving public health as the ultimate goal. If we base our decisions around what science tells us are good and bad foods, we’d likely remove the vending machine altogether. There’s nothing in the machine that even resembles a “health food.” Science tells us, generally, that minimally processed foods are better than processed foods, and that low-salt, low-sugar foods are better than high-salt, high-sugar foods. But beyond this general notion of what’s good and what’s bad, there is much ambiguity and controversy over labeling specific foods as healthy or unhealthy. If we want a healthy machine, should it be filled only with milk? Should it be stocked only with fruit? Or is a mixed fruit and nut granola bar healthy?

One might also expect nutritionists to rebel against traditional snack foods but for years this vending machine has been profitable for the vending company. Although it’s the norm for vending machines to contain high fat, high sodium and highly processed products, we debate whether or not this is acceptable for nutritionists. One questions whether or not, as nutritionists, we should behave differently, desire different foods, and serve as role models for the standards we teach.

We again ask ourselves what it means to be part of the Division of Nutritional Sciences. Do we have a responsibility to be healthy? How do we, and should we, be responsible for changing the set of choices available to individuals? If we create a healthier vending machine, will the consumer base change? Will those who want junk food walk over the next building to buy the traditional unhealthy food offerings? There are no simple answers and no one opinion, even within the Division of Nutritional Sciences. Perhaps most of all, we ask ourselves, is “better-for-you” good enough?

At the end of the day it comes down to who determines our set of choices. The vending team is not trying to taking away choice, but is instead implementing a new set of choices. We are trained to believe choice is set by food companies. If the vending team’s bottom line is public health, and the vending company’s bottom line is dollar signs, who should have the final say? Someone has to set the choices – it’s just a matter of who, and how.

This research was conducted as part of Alexandra Lewin’s doctoral research. The author would like to thank Jennifer Wilkins (Senior Extension Associate, Cornell University), Marion Nestle (Professor, New York University) and Sue Wernimont (graduate student in the Division of Nutritional Sciences) for their contributions and help with this project.

*This research was exempt from human subjects.

 

Photo Credits:
1. trp0
2. programwitch

The Snack Food Association: Washington’s Voice for Sugar, Fat and Salt

A recent study at Brown University Medical School published in the journal Appetite found that reducing the number of snack foods available to consumers could lead to reductions in consumption and therefore lower rates of obesity. However, the trend is in the opposite direction: each year hundreds of new snack foods are introduced to the market, advertised heavily, and retailed in more places. Snack foods represent an important growth opportunity for the food industry both in the U.S. and globally.

In 2005, sales of snack foods exceeded $61 billion in the U.S.3 Snack foods, which tend to be high in calories, sugar, and sodium, have become daily staples for millions of Americans, and, increasingly, for consumers in other parts of the world. Snack foods are among the most heavily advertised products on television, and the U.S. corporations that manufacture them are among the largest and most influential global companies. Retailers like snack foods because they are convenient to sell and have a high profit margin. Remarkably, candy and confectionary products are the third largest food category sold in the U.S., behind carbonated beverages and milk.2 The fourth largest category is salty snacks, and cookies rank seventh.2

Why are products consistently implicated in the growing rates of obesity continuing to expand their market share?

One reason is that makers of snack foods have a far more powerful voice in Washington, where the rules governing food and health are set, than do ordinary eaters or those concerned about obesity. According to its website, the Snack Food Association (SFA) is “the international trade association of the snack food industry.” 2 Founded in 1937, the SFA represents more than 800 manufacturers and suppliers of snack foods worldwide. Members include “manufacturers of potato chips, tortilla chips, cereal snacks, pretzels, popcorn, cheese snacks, snack crackers, meat snacks, pork rinds, snack nuts, party mix, corn snacks, pellet snacks, fruit snacks, snack bars, granola, snack cakes, cookies and various other snacks.”

What does the Snack Food Association do?

Its mission is “to provide value for SFA members by offering services and relationship building forums that strengthen the performance of member companies and support industry growth.” Its activities include serving as the voice for the snack food industry before government; researching and compiling annual snack industry sales and consumer data; promoting increased snack consumption by sponsoring National Snack Food Month in February; providing a positive industry voice to the national, local and trade media; educating manufacturers on technological advances in equipment and raw ingredients, and on consumer trends pertaining to the snack industry; sponsoring the largest convention and trade show in the world devoted exclusively to snacks (to sign up for the 72nd Annual Snaxpo in Orlando, Florida in 2009, visit http://www.snaxpo.com/); and providing technical support to its members through direct assistance, videos, seminars and publications.

In 2007, for example, the Snack Food Association held its annual Spring Summit in Washington, D.C.4 Some 40 snack food executives met with members of the House and Senate, heard a presentation from a top Defense Department official, who encouraged snack food companies to contribute products for troops who visit United Service Organization locations at America’s airports, and were treated to a VIP tour of the U.S. Supreme Court by Chief Justice John Roberts, who answered members questions about corporate law. In a luncheon address, Republican Senator Pat Roberts told the snack execs, “I don’t think the founding fathers felt that the federal government should get into what food we eat. Obesity is a big problem, but it is not the proper role of the federal government to tell people what to eat.” Instead, the Senator stated, consumers should use “moderation” in their diets and he called for legislation requiring schools to include physical education programs in their curriculum. The SFA also supports such legislation.

Other legislative priorities of the SFA include:

  • Opposition to limiting choice for Food Stamp Program participants
  • Opposition to redefining Foods of Minimal Nutritional Value
  • Opposition to the Country of Origin Labeling provision for Processed Peanuts
  • Opposition to union card check legislation, the Employee Free (Forced) Choice Act
  • Support for the Fair Labor Standards Act–Motor Carrier Exemption (Overtime Rules for Drivers of Vehicles Under 10,001 lbs.)
  • Support limited liability for food manufacturers (Commonsense Consumption Act)
  • Support for National Uniformity for Food
  • Support for requiring physical education in schools
  • Support for reform of the U.S. Sugar Program

The SFA has also sponsored research on the effects of sodium on blood pressure and health, and presents health information to the government panels that determine the Dietary Guidelines for Americans.2 The SFA is a sponsor of Best Food Nation , a public relations effort launched by the food industry respond to any criticism of the U.S. food system and to represent the industry’s views on the scientific evidence on obesity. Box 1 shows the members of Best Food Nation.

Box 1. Members of Best Food Nation

American Farm Bureau Federation
American Meat Institute
Cattlemen’s Beef Board
Corn Refiners Association
Food Products Association
International Franchise Association
National Cattlemen’s Beef Association
National Chicken Council
National Council of Chain Restaurants
National Milk Producers Federation
National Pork Board
National Pork Producers Council
National Potato Council
National Restaurant Association
National Retail Federation
National Turkey Federation
Produce Marketing Association
Snack Food Association
U.S. Potato Board
United Egg Producers

Recently, the SFA went before Congress to seek financial assistance from the U.S. government to alleviate the increasing commodities prices of corn, wheat, and other products that are affecting snack foods manufacturers. In fact, the growing price of snack food staples represents a significant threat to the industry’s continued profitability.

The SFA actively opposes any restrictions on the right of corporations to advertise unhealthy products. As required by the Lobbying Disclosure Act of 1995, the SFA is registered as a lobby organization with the Clerk of the U.S. House of Representatives and the Secretary of the U.S. Senate. Among other measures, the SFA has joined with the Alliance for American Advertising.6 According to The Wall Street Journal, at the time of its formation, the Alliance for American Advertising was the most ambitious effort yet to oppose government regulation in food advertising aimed at children; funders include industry giants General Mills, Kellogg and Kraft.7 The SFA has also joined with the lobby organization known as the American Council for Fitness and Nutrition in opposing restrictions on vending machines in schools; funders include PepsiCo, Coca Cola, Kraft Foods, and the National Soft Drink Association.7 These relationships illustrate the complex web of trade associations that work to protect industry interests in Washington and elsewhere.

The SFA also seeks to provide the media with positive messages on the snack food industry. For example, in an April 2007 press release, the SFA announced its support of voluntary school nutrition standards, stating, “The Snack Food Association is delighted to be part of a growing coalition of companies and trade associations that are doing their part to help parents, educators, and health professionals teach kids about healthier lifestyles.”9

Motivated by threats of tighter regulation and costly lawsuits, several multi-billion dollar corporations have agreed to voluntary measures to limit junk food advertising to children over the past two years. In August 2007, the Federal Trade Commission issued subpoenas to 44 food and beverage companies, including Coca Cola, McDonald’s, Kraft, General Mills, and Procter & Gamble, to request information on how they market their products to children.5 Products such as Trix cereal, Oreo cookies, and Pringles potato chips, are some of the products that contribute to childhood obesity. In an effort to convince skeptics that the snack and junk food industries can regulate themselves, some major corporations have implemented voluntary measures. Proposed measures include having at least half of junk food advertising directed at children under the age of 12 include the promotion of “healthier food options” or physical activity.10, 11

Critics of the Snack Food Industry

Critics question the value of these voluntary guidelines. According to Michael Jacobson of the Center for Science in the Public Interest, under these guidelines, so-called healthy ads could include advertisements for sugary cereal because they meet the FDA’s definition of “healthy” which does not speak to sugar content.10 He said the healthy lifestyle message could include Ronald McDonald pedaling a bicycle while eating fast food. 10 He stated, “That message still does more harm than good. It’s a joke.” 10

In recent years, many legislators have become concerned with the role of the food industry in contributing to the high rates of obesity in the U.S. In late 2006, Sen. Tom Harkin, an Iowa Democrat, ordered the Federal Trade Commission to look into the issue of junk-food advertisements targeting children. Commenting on the obesity epidemic, he stated, “We must take steps to protect our children’s health. Parents are being undermined by the junk-food culture that is increasingly promoted to our kids on TV.”5

The bottom Line

In sum, the SFA uses a variety of mechanisms to advance industry interests. The SFA claims to be a positive voice for snack food manufacturers, and it says it supports initiatives aimed at curbing the childhood obesity epidemic. But with most nutritionists agreeing that the central nutrition message today should be to eat less highly processed food, the Snack Food Association remains a powerful force for the opposite message, Eat more of the products our members make. Thus, the SFA serves as a powerful accelerator of the trends that that are making so many Americans overweight, sick and dying prematurely.

References

1. Raynor HA, Wing RR. Effect of limiting snack food variety across days on hedonics and consumption. Appetite. 2006;46(2):168-76.
2. Food Association website. Accessed April 22, 2008 at http://www.sfa.org
3. “Snack Food Trends in the U.S.: Sweet, Salty, Healthy and Kids Snacks.” July 1, 2006 Report published by Packaged Facts. 308 pages — Pub ID: LA1119533. Available for purchase at

http://www.marketresearch.com/map/prod/1119533.html

4. Gatty B. “Hitting ‘the hill’: Snack Food Association members lobbied congress about key issues.” June 1, 2007, Snack Food & Wholesale Bakery. Accessed June 1, 2008 at http://www.allbusiness.com/retail-trade/food-beverage-stores-
specialty-food/4510508-1.html
5. Lopes, G. “FTC not sweet on junk-food ads targeting children.” The Washington Times. November 7, 2006.
6. Institute of Medicine, Committee on Food Marketing and the Diets of Children and Youth, J. Michael McGinnis, Jennifer Appleton Gootman, Vivica I. Kraak, Editors. Food Marketing to Children and Youth: Threat or Opportunity.  2006. Washington, D.C.: The National Academies Press.  Available online at http://www.nap.edu/catalog.php?record_id=11514#toc
7. Ellison S. “Divided, companies fight for the right to plug kids’ food.” January 26, 2005. The Wall Street Journal.
8. Source Watch: A project of the Center for Media and Democracy. Article on the American Council for Fitness and Nutrition. Accessed June 1, 2008 at http://www.sourcewatch.org/index.php?title=American_Council_for_
Fitness_and_Nutrition
9. Snack Food Association press release dated April 26, 2007. “Snack Food Association Supports Voluntary School Nutrition Standards.” Accessed April 22, 2008 at: http://www.sfa.org/pressreleaseclinton.aspx
10. Martin, A. “Leading makers agree to put limits on junk food advertising directed at children.” The New York Times. November 15, 2006.
11. Brooks Barnes. “Limiting ads of junk food for children.” The New York Times. July 18, 2007.

Photo Credits:
1. bmcfee

Fixing the FDA: Options for the Next President

The last several years have not been kind to the Food and Drug Administration (FDA). Critics have accused the agency of being inefficient, failing to meet its mandates and of complicity with the pharmaceutical industry. The FDA has come under attack by Congress, health and medical professionals and the pharmaceutical, tobacco and food industries. One director was forced to quit and the current director has repeatedly been summoned by Congressional committees to respond to criticisms.

With the 2008 presidential election quickly approaching, the topic of health care, including the safety of pharmaceuticals, has gained increasing attention. The next United States President will face great pressure to reform the FDA and will need to simultaneously attend to issues of efficiency, drug and food safety, tobacco and funding. How the President and Congress choose to respond to industry calls to make the FDA even more business friendly and advocates calls for restoring the FDA’s public health mandates will shape how a key federal agency will regulate corporate practices that influence health in the next four years.

This Corporations and Health Watch story begins a series examining recent conflicts about the FDA, the positions of the presidential candidates on the agency and options for 2009 and beyond. This report’s focus is on the FDA and the pharmaceutical industry. Future reports will examine the role of the FDA in regulating food and tobacco.

Drug Safety

Vioxx

The FDA’s recent troubles with Vioxx, Avandia and Heparin illustrate the range of problems the agency faces in premarket testing, oversight of foreign industries and on limiting industry influence on its decisions. In Fall of 2004, pharmaceutical giant Merck began the largest and most expensive drug recall in history by pulling its drug Vioxx off the market after studies showed that chronic use was associated with an increased risk of heart attacks and strokes. Approved in 1999 based on data submitted to the FDA but not reviewed through the standard scientific peer review, Vioxx is reported to have caused as many as 139,000 heart attacks.1

Although Merck was initially praised for its voluntary withdrawal of the product, critics later charged that Merck had known about the risks involved with long-term use far earlier than it had gone public with them.1 Merck was eventually shown to have ignored research published three years earlier, which found that long-term Vioxx use increased risk of cardiovascular events, and to have planted studies in medical journals that were attributed to independent researchers.2 Whistleblower and 20 year employee of the FDA David Graham later testified that the agency’s role in the Vioxx scandal was far from innocent, stating: “What happened with Vioxx is really a symptom of something far more dangerous to the safety of the American people. Simply put, the FDA and its Center for Drug Evaluation and Research are broken.”1

Avandia

In June 2007, the New England Journal of Medicine published a meta analysis of 42 clinical trials for Avandia that showed that the drug was associated with increased risk of myocardial ischemic events.3 It wasn’t until five months later that the FDA announced additional warnings on the Avandia product label. In addition, an advisory committee voted to keep the product on the market despite a later study published in the Journal of the American Medical Association which concluded that Avandia was associated with increased risk of acute myocardial infarction, congestive heart failures and mortality in older patients undergoing diabetes treatment.4

Heparin

Earlier this year, the FDA was criticized for failing to protect Americans against a contaminated supply of the blood thinner Heparin. At least 19 people died and hundreds became sick after consuming the contaminated product that had been imported from China. The Heparin case raised questions about the agency’s ability to regulate and inspect a growing flow of imported drugs and drug ingredients.

Compounding the problem of limited resources for plant inspections, FDA policies do not extend to the foreign study sites that produce more than 20% of clinical trial data submitted to the FDA.5 Moreover, at present, 80% of all active drug ingredients are imported.6 Finally, the FDA has reported an 800% increase in the number of cases of counterfeited pharmaceutical ingredients between 2000-2006.7 Exacerbating the already flawed foreign inspection process is the fact that the FDA does not bring its own translators or hire independent ones but rather relies on English-speaking representatives of the plants it visits to translate during the inspection process.

The Government Accountability Office stated that in order for the FDA to complete full inspections of foreign plants, it would require more than $56 million in additional funds with $15 million required to inspect Chinese plants every two years.8 The New York Times reported that at the current inspection pace, the FDA would need “at least 27 years to inspect every foreign medical device plant that exports to the United States, 13 years to check every foreign drug plant and 1,900 years to examine every foreign food plant.”8 Though the Bush Administration stated there were plans to improve the FDA’s ability to conduct foreign inspections, no funds were allocated for this purpose in President Bush’s yearly budget.

In order to apply for approval, drug companies must conduct clinical trials of products under development. However, the FDA does not require that these clinical trials be published and are therefore not subject to peer review. Mandated by the 1997 Food and Drug Administration Modernization Act (FDAMA), in 2000 the FDA created a national clinical trial registry for pharmaceutical corporations to submit clinical trial data. FDAMA required manufacturers to register their clinical trials at clinicaltrials.gov and to give a detailed account of both their experiments and eligibility requirements for research subjects. However, the FDA neither enforced compliance nor encouraged use of the clinical trial registry. While some manufacturers, such as Merck, did register their clinical trials, they only reported results that favored their products as they are not required to submit raw data. This led to suppression of full information about the efficacy and safety of new products under development.1

The FDA seems to be increasingly entangled with industry in ways that affect the process of review and regulation. For example, the Agency has frequently delayed the release of information about potential health effects of approved medical products. In the case of the Ortho Evra birth control patch manufactured by Johnson & Johnson that was linked to increased risk of blood clots and strokes and resulted in 50 deaths, the FDA did not make public these risks until six years after Johnson & Johnson’s own study showed such an association.9 After numerous lawsuits were filed against the manufacturer, Johnson & Johnson utilized the legal argument of pre-emption, claiming it could not be sued because the FDA had approved the patch and warning label. Testifying at a trial over the schizophrenia drug Zyprexa, former FDA scientist Dr. John Gueriguian who worked at the agency for two decades stated that the FDA did not always pursue strong warnings on products considered potentially dangerous, in part, because the pharmaceutical industry objects to warnings: “We at the FDA know what we can obtain and what we cannot obtain – and what we can’t obtain we will not ask.”9 By withholding negative findings, then using the FDA approval based on this limited information to preempt litigation from those harmed, the drug industry has made the FDA its ally in avoiding liability.

Under-funded, Understaffed and Overtaxed

Responsible for the safety of the nation’s food and drug supply, it might strike the American public as odd that the FDA budget is less than that of the school board of Montgomery County—the county in which the FDA is located.10 The FDA, particularly under the Bush Administration, has been chronically underfunded while at the same time it has been saddled with increasing responsibility.

The Prescription Drug User Fee Act (PDUFA) has been the source of both funding and controversy for the FDA. Adopted in 1992, the act requires pharmaceutical and biological products makers to pay fees for product applications and supplements. These fees are used to hire staff to assist in reviewing product applications, thus accelerating the process of drug approval. Though some have argued that user fees provide a vital source of revenue for an already underfunded agency and have suggested their application to overseas producers, a widely cited New England Journal of Medicine study suggested that PDUFA deadlines affect the safety of approved drugs with those approved right before a deadline being less safe than drugs approved at other times.11 By rushing through product applications, the FDA opens itself to the potential for an increase in recalls. PDUFA must be renewed every five years and over time has become more controversial. Public health critics of the PDUFA argue that it makes the FDA increasingly susceptible to industry pressure. Industry officials have critiqued user fees as unfair as the government is responsible for safety reviews.

Given these uncertainties about both the ability of the FDA to regulate the drug industry and the influence of Big Pharma on the agency through the use of such fees, the agency lost funding for a direct-to-consumer advertising fee provided by the FDA Amendments Act (FDAAA). Legislators also axed $1 million in funding for the new Reagan-Udall Foundation, a foundation created by Congress to work independently from the FDA to enhance product safety and innovation.

With a woefully inadequate budget and what many FDA staff characterize as a demoralizing work environment, the agency faces staff shortages that limit its ability to carry out inspection and regulation tasks properly. In 1997, Congress gave the FDA funding to support more than 9,000 scientists; today the number actually employed is less than 1,000.10 Further, the FDA is not able to match salaries in the private sector making it difficult for the agency to attract top candidates. Under the Bush Administration, the FDA has faced reduced funding and has lacked consistent leadership, often operating without a confirmed commissioner. Drug scandals and low morale have also lead to increased resignations, with many former employees citing pressure to express status quo scientific opinions and a belief that their work supported marketability more than health as reasons for leaving.12 A 2006 Union of Concerned Scientists survey of 5,918 FDA scientists found 1 in 5 reported that they experienced pressure from top-level FDA employees to gear their work according to political and corporate interests.13 Understaffing is also linked to slowdowns in drug approval rates with 19 new drugs being approved in 2007 compared to 53 approved in 1996.14

During this same period, Congress and the President gave the FDA more responsibility. For example, in the fall of 2007, Congress gave the agency increased power to regulate drug safety and data disclosure. However, the ability of the FDA to take on additional responsibilities is hindered not just from lack of adequate funding and high rates of turnover but also by an inefficient organizational climate. As a case in point, the FDA currently uses more than 300 non-compatible databases and has not created a centralized system which would allow researchers, medical professionals and the general public to access clinical trial information efficiently.1 The Office of the Inspector General (OIG) in the Department of Health and Human Services (HHS) has stated that the lack of an efficient FDA information system has hampered its ability to properly oversee research. Because of this, the FDA inspects less than 1% of clinical trials and less than 300 Institutional Review Boards (IRB) each year.14

Challenges from Across the Political Spectrum

The FDA has been a frequent target on Capitol Hill, in the press and from public health advocates. Democratic lawmakers have called for increases in user fees in order to improve surveillance and inspections. Earlier this year Representative Bart Stupak (D-MI), the chairman of the House Energy and Oversight and Investigations subcommittee, called for acting FDA commissioner Andrew von Eschenbach and other FDA officials to resign due to their “total lack of leadership.”14 Referring to scandals over Sanofi-Aventis’ antibiotic Ketek which caused liver damage and other serious side effects, Senator Charles Grassley (R-IA) stated, “There were sirens, red flags, and bullhorns, but it looks like the company and the FDA kept ear plugs and blinders on.”7

Public health advocates commonly critique FDA review and regulatory procedures as serving industry at the expense of public health. Consumers Union, Consumer Federation of America, US PIRG and others have repeatedly argued that the FDA has not adequately protected the American public from dangerous medical and food products and has charged the Bush Administration as crippling an already weak system. In a March 2005 joint letter to the committee charged with reviewing Dr. Lester Crawford to be the Commissioner of the FDA, the three agencies noted that the FDA suffers from a lack of adequate authority to regulate the pharmaceutical industry, from conflicts of interest which prohibited the public release of important research findings, and from the data reporting procedures which favor industry at the expense of peer review and open information.15 Similarly, in April 2008, the Prescription Project, Community Catalyst, National Physicians Alliance, Prescription Access Litigation, Community Catalyst and US PIRG gave comments urging the FDA not to adopt the draft guidance that would have allowed pharmaceutical representatives to distribute single studies to medical providers on the benefits of off-label drug use.16 The coalition called for hearings on what circumstances, if any, should allow for such practices but noted that as the draft guidance was currently constituted, it would benefit industry at the expense of good science and public health and safety. Also in April, Consumers Union Policy Counsel Ami Gadhi testified before the US House of Representatives Subcommittee on Health, Energy & Commerce Committee that “the call for a major overhaul of the FDA has now become a roar.”17

In March of 2005 the Center for Medical Consumers, Center for Science and the Public Interest, Command Trust Network, National Research Center for Women & Families, National Women’s Health Network and US PIRG launched a media campaign including a now defunct website www.FixTheFDA.org, television and print ads detailing the flaws in the FDA regulation system. On one campaign flyer, the groups argued, “Unfortunately, the FDA is broken. The public’s health is being compromised to the point of negligence. The current Vioxx controversy is just the latest symptom of a system in crisis. It’s not all the agency’s fault. Congress has reduced the FDA’s authority, slashed enforcement budgets, and weakened its legal powers.” The groups then called for Congress to close loopholes and fix the FDA before further scandals occurred.

Conservatives arguing from a free-market perspective have suggested that the FDA cannot be reformed and should be abolished. Libertarian new source The Freeman, a publication of the Foundation for Economic Education, has argued that the FDA operates as a legally protected monopoly and that increasing the powers of and funding for the FDA will only exacerbate problems with the fledgling agency. In July of 2005 Freeman author Arthur E. Foulkes claimed that overcautious regulatory and review practices at the FDA kept important medications from market and from helping those who might be benefited by them: “How free is a land in which bureaucrats and politicians decide which health-care options are legal and which is not? No one is made better off by having peaceful options in life denied him. The FDA is beyond being reformed. It should be abolished.”18 In a later Freeman piece, author Larry van Heerden echoed the critiques of public health advocacy groups, noting the impact of user fees and corporate influence on the ability of the FDA to operate efficiently and objectively. However, rather than calling for increased reform and stricter standards to reduce corporate influence, van Heerden argued for abolishing the FDA in support of a free-market system and the responsibility of consumers to be self-informed: “In a system without such gate keeping, where drugs were available along with all the information on risks and benefits, the market would sort out the wheat from the chaff, dramatically lowering the financial stake in any single drug and reducing the tendency for drug companies to engage in fraud and deception.”19

Conservative critiques of the FDA are not new. In the early 1990s a coalition of conservative organizations raised concerns over the FDA regulatory process, particularly questioning agency restrictions on off-label use of medication and the slow rate of new drug approval. Industry leaders and conservative commentators continue to point to the slow down in approval rates as signs of ineffectiveness and an overly-cautious regulatory environment caused, in part, by a bevy of recent scandal over approved pharmaceuticals such as Vioxx. Though the FDA argues that new drugs will have to show marked safety or efficacy advantage over existing drugs in order to gain approval, industry officials claim that slowdowns increase development costs and inhibit competition by blocking new drugs from entering the market and taking market share away from established drugs. Despite overall arguments defending current approval procedures for new drugs, even the FDA’s own Science Board acknowledges that slowdowns in approval for new medical technologies and pharmaceuticals has a negative impact and “means that American lives are at risk.” 20

The FDA responds to its critics

The FDA has both defended itself against its critics and acknowledged deep structural issues that prohibit it from functioning properly. Facing increasing criticism, in 2005 the FDA asked the Institute of Medicine (IOM) to assess the safety of the U.S. drug system. The IOM released its report, “The Future of Drug Safety: Promoting and Protecting the Health of the Public” in September 2006 noting that the “perception of crisis” has compromised the credibility of the FDA and of the pharmaceutical industry;” that there is widespread agreement amongst stakeholders to improve the drug safety system; that the current system is currently hindered by “serious resource constraints that weaken the quality and quantity of the science that is brought to bear on drug safety” as well as a less than optimal organizational climate and insufficient and unclear regulatory authority; and a lack of transparency on the part of both the FDA and the drug industry to communicate safety concerns in a timely and appropriate manner.21 In response to the report, the FDA stated it would take steps to improve the integrity of the science behind the entire process of medical product safety; to improve risk communication policies and procedures; and to strengthen management and operations in order to ensure an effective U.S. drug safety system.22

The 2008 Presidential Election and the Chance for Reform

In their review of the history of the FDA, Borchers et al (2007) note that the “evolution of the FDA can be described as a series of ‘crisis-legislation-adaptation’ cycles: a public health crisis promoted the passage of congressional legislation, which was then followed by implementation of the law by the FDA.”23 Though this pattern reflects the history of the FDA at large, the authors note that current crises and challenges facing the FDA are so severe that only “strong and permanent leadership willing to redefine the role and procedures of the FDA” will be successful in getting the agency back on track. With the 2008 presidential campaign approaching and the state of the FDA in near permanent crisis, neither Democratic candidate Barack Obama nor Republican challenger John McCain have staked out strong positions on the FDA.

Senator Obama’s website offers some information about his stance on prescription drugs. His primary focus is on reducing the cost of prescription drugs by increasing the amount of safe pharmaceuticals imported from the developing world and increasing the amount of generic medications available on the market. While Obama notes the importance of breaking up insurance monopolies that drive up premiums, he does not call for similar moves in the pharmaceutical industry. Further, Obama takes no official stance on the FDA at large, plans to increase the safety of imported drugs or prescription drug marketing.

By comparison, in her campaign, former Democratic challenger Hillary Clinton, commented at more length on FDA issues. On the need for FDA reform, Clinton stated on her website: “Recently, concerns have been raised about the ability of the FDA to ensure the safety of drugs marketed to American consumers. I believe there is a clear need for post-marketing monitoring.”24 Like Obama, Clinton proposed to lower prescription drugs through the promotion of generic medicines and the importing of safe drugs from developing countries. To reduce prescription drug prices, Clinton argued for breaking up pharmaceutical monopolies to create generic competition. On the safety of drug imports, Clinton critiqued the Bush Administration for its failure to protect the American people from unsafe pharmaceutical imports:

If George Bush won’t start that process now, I will when I am President. As I laid out in my import safety agenda, I will require that foreign drug makers produce a certification that they have met American safety standards as a condition of import into the United States, confirmed by independent testing and inspection. I will open permanent FDA oversight offices in at-risk countries like China so that episodes like this one are not repeated. I will require foreign drug makers to accept random, surprise inspections, rather than notifying them in advance – and giving them a chance to clean up their act — as we do now. And I will stiffen civil and criminal penalties for violators. It is a basic obligation of government to protect its citizens. Americans can count on me as President to protect the food we eat, the toys our children play with and the drugs we take to make us healthy, not sick.25

Finally, Clinton noted that for every direct-to-consumer marketing dollar spent, pharmaceutical sales increased by $4.20. To address this issue, she suggested limiting such advertising, instituting a reporting requirement for financial arrangements between providers and industry, and protecting information about the prescribing practices of medical providers from being sold to drug manufacturers.

Senator McCain offers little information about his views on the FDA and the need for its reform on his presidential website. Like the Democratic challengers, McCain calls for increased imports of pharmaceuticals and faster genetic drug approvals. On McCain’s Senate website, transcripts of statements given to the Senate provide more information. In July 2002, McCain urged the Senate to pass the “Greater Access to Affordable Pharmaceuticals Act.” In his testimony, McCain argued against current pharmaceutical monopolies and for increased generic competition. In order to effect such a change, McCain argued: “This should not be done by imposing price controls or creating a universal, government-run health care system. Rather, a balance must be found that protects consumers with market-based, competitive solutions without allowing those protections to be manipulated at the consumers’ expense, particularly senior citizens and working families without health care insurance.”26 In support of the “Pharmaceutical Market Access and Drug Safety Act of 2004,” McCain specifically addressed the safety of drug imports noting, “To ensure the safety of this new system, the FDA would be required to regularly inspect Canadian exporters as well as domestic importers. The legislation also would require all importers and exporters to maintain a full chain of custody, or pedigree, for the drugs imported into the U.S.”27 Finally, in February 2005, McCain supported the “The Pharmacy Market Access and Drug Safety Act of 2005,” which would lower the cost of imported prescription drugs. He stated: “None of us have any illusions that enacting drug importation legislation will easy. Powerful special interests will continue to try to block us every step of the way. However, this is a battle worth fighting and winning for American consumers.”28

In a February 2008 blog entry from EyeOnFDA.com, Mark Senak of marketing and communications giant Fleishman-Hillard, briefly compared the positions of presidential candidates at that time on the FDA. He noted,

All of the candidates also tend to agree that they want to bring in new technology and devices to manage information, cultivate more prevention programs and to improve the quality of healthcare. But what was perhaps most surprising was the fact that as much as the candidates differ on the details of these reforms, they were nearly all in favor of two changes that would have a hefty impact on the pharmaceutical market place – Medicare Part D reform and the importation of prescription drugs. In other words, change with this election cycle is of course, inevitable, but it is also highly possible, if not probable, that candidates from both political parties will embrace these two reforms. To me, that was news. 29

Certainly it seems then that regardless of the winner of the next US presidential election, Americans can expect increased attention to the lowering the price of pharmaceutical products by increasing imports and access to generic medicines. However, neither Obama nor McCain have articulated their positions on the necessity for deep structural reform within the FDA and the need for creative solutions for both a source and level of funding that would allow the agency to properly review and inspect domestic and foreign food and drug applications, data and manufacturing plants.

In the coming months, health advocates may want to press the candidates to explain in more detail their positions on the FDA. More generally, the presidential candidates and those running for Congress will need to articulate how they propose to change the cozy relationship between the pharmaceutical industry and the FDA in order to allow the agency to fulfill its original mandate. Unless the next US President and Congress take a strong stand on the need for FDA reform and a transformation of the relationship between the FDA and the industries it regulates, it is likely that the trends of the past, crisis—legalization—adaptation, will continue at the expense of American health and public safety.

References

1. Dohrman, AJ. Rethinking and Restructuring the FDA Drug Approval Process in Light of the Vioxx Recall. Journal of Corporation Law. 2005;31(1):203-223.
2. Mukherjee, D; Nissen, SE; Topol, EJ. Risk of Cardiovascular Events Associated With Selective COX-2 Inhibitors. JAMA. 2001;286(8):954-959.
3. Nissen, SE; Wolski, K. Effect of Rosiglitazone on the Risk of Myocardial Infarction and Death from Cardiovascular Causes. New England Journal of Medicine. 2007; 356(24):2457-2471.
4. Lipscombe, LL; Gomes, T; Lvesque, LE; Hux, JE, MSc; Juurlink, DN; Alter, DA. Thiazolidinediones and Cardiovascular Outcomes in Older Patients With Diabetes. JAMA. 2007;298(22):2634-2643. Wechsler, J. FDA Hit for Poor Clinical Oversight. Applied Clinical Trials. 2007;16(11):30-35.
5. Wechsler, J. FDA Hit for Poor Clinical Oversight. Applied Clinical Trials. 2007;16(11):30-35.
6. Washington Post. Fixing the FDA: Lack of funding inhibits crucial drug inspections abroad. Friday, March 7, 2008; A16.
7. Loewenberg, S. US FDA Feels the Heat from Congressional Hearings. The Lancet. 2008; 371:1565-1566.
8. Gardiner, H. U.S. Identifies Tainted Heparin in 11 Countries. New York Times. April 22, 2008.
9. Harris, G; Berenson, A. Drug Makers Near Old Goal: A Legal Shield. The New York Times. April 6, 2008.
10. Hubbard, W. The Overwhelmed FDA. The Boston Globe. June 3, 2007.
11. Carpenter, D; Zucker, EJ; Avorn, J. Drug-Review Deadlines and Safety Problems. New England Journal of Medicine. 2008;358(13):1354-1361.
12. Ross, W. What’s Up with the FDA? Medical Marketing & Media. 2008. Accessed at: http://www.mmm-online.com/Whats-Up-with-the-FDA/article/104861/
13. Union of Concerned Scientists. FDA Scientists Pressured to Exclude, Alter Findings; Scientists Fear Retaliation for Voicing Safety Concerns Public Health and Safety Will Suffer without Leadership from FDA and Congress. 2006. Accessed at: http://www.ucsusa.org/news/press_release/fda-scientists-pressured.
html
14. Wechsler, J. Attacks on FDA Escalate. Pharmaceutical Technology. May 2, 2008. Accessed at: http://pharmtech.findpharma.com/pharmtech/Washington+Report/
Attacks-on-FDA-Escalate/ArticleStandard/Article/detail/515161?context
CategoryId=484
15. Consumers Union; Consumer Federation of America; US Public Interest Group. March 15, 2005. Accessed at: http://www.pirg.org/consumer/pdfs/crawfordfda.pdf
16. Prescription Project; Community Catalyst; National Physicians Alliance; Prescription Access Litigation; Community Catalyst; US PIRG. Comments Concerning the United States Food and Drug Administration Draft Guidance for Industry “Good Reprint Practices for the Distribution of Medical Journal Articles and Medical or Scientific Reference Publications on Unapproved New Uses of Approved Drugs and Approved or Cleared Medical Devices.” Docket No. FDA-2008.D.0053. April 21, 2008.
17. Consumers Union. Statement of Ami Gadhia Concerning Discussion Draft of “FDA Globalization Act” Subcommittee on Health, Energy & Commerce Committee U.S. House of Representatives. May 1, 2008. Accessed at: http://www.consumersunion.org/pub/core_product_safety/005598.html
18. Foulkes, AE. The FDA Cannot be Reformed. The Freeman. July 1, 2005.
19. van Heerden, L. Abolishing the FDA. The Freeman. March 1, 2007.
20. Harris, G. Advisers Say F.D.A.’s Flaws Put Lives at Risk. The New York Times. December 1, 2007.
21. Institute of Medicine. The Future of Drug Safety: Promoting and Protecting the Health of the Public. September 22, 2006. Accessed at: http://www.iom.edu/?id=37339
22. Food and Drug Administration. The Future of Drug Safety: Promoting and Protecting the Health of the Public. FDA’s Response to the Institute of Medicine’s 2006 Report. Accessed at: http://www.fda.gov/oc/reports/iom013007.pdf
23. Borchers, AT; Hagie, F; Keen, CL; Gershwin, ME. The History and Contemporary Challenges of the US Food and Drug Administration. Clinical Therapeutics. 2007; 29(1):1-16.
24. Clinton, H. Accessed at: http://clinton.senate.gov/issues/health/
25. Clinton, H. Clinton Responds to FDA Tripling Its Estimates For Heparin-Related Deaths. April 9, 2008. Accessed at: http://www.hillaryclinton.com/news/release/view/?id=6989
26. McCain, J. McCain Urges Senate to Pass Generic Drug Bill Quickly. July 17, 2002 Accessed at: http://mccain.senate.gov/public/index.cfm?FuseAction=PressOffice.
Speeches&ContentRecord_id=aa8ace59-666d-4d42-aad7-caab
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27. McCain, J. Pharmaceutical Market Access and Drug Safety Act of 2004. April 21, 2004. Accessed at: http://mccain.senate.gov/public/index.cfm?FuseAction=PressOffice.
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Photo Credits:

1. MooN
2. goodmosconi
View CHW’s coverage on Corporations, Health and the 2008 Presidential Race:

Part 1: Following the Money
Part 2: Clinton, Obama and McCain on the Role of Corporations
Part 3: Clinton, McCain, Obama and the Food Industry

Corporate Practices as a Determinant of Health Disparities: An Interview with Stephen Thomas

Stephen Thomas, Ph.D. is the director of the Center for Minority Health (CMH) and the Philip Hallen Professor of Community Health and Social Justice in the University of Pittsburgh Graduate School of Public Health. He has written widely about racebased disparities and is founding cochair, with Thomas LaVeist from Johns Hopkins University, of the new Academy for Health Equity, an organization whose mission is to “utilize rigorous scientific research, policy development, and community advocacy to eliminate health disparities and create a social movement designed to ensure equal opportunity for health.” Recently Corporations and Health Watch director Nick Freudenberg interviewed Dr. Thomas about his views on corporate practices as a social determinant of health and as a creator of disparities in health, an interview excerpted here.

CHW: In your view, what role do the practices of food, alcohol, and tobacco industries play in explaining differences in black and white health status?

ST: I think this question about fast food, alcohol, and tobacco marketing is an underrecognized burden driving racial and ethnic health disparities simply because of the artificial tension between market forces and issues of personal judgment. I don’t think they’re all artificial but they are sometimes set up as if they are mutually exclusive. In a free society we assume that people have the right to choose and therefore if they choose to make bad choice it’s their fault, not the fault of the broader society or the environment in which they live and operate. And that gives a false choice that has resulted in many African American communities suffering disproportionately from very sophisticated targeted marketing in black neighborhoods when it comes to legal commercial products that are known risk factors associated with poor health outcomes. For a long time, the tobacco industry put a lot of money into cultivating publications and organizations serving African Americans including, but not limited to, Jet and Ebony magazines. Additionally, they’ve sponsored conferences with civil rights organizations like the Urban League and NAACP as well as demonstrate their commitment to “diversity” by hiring black executives to get them into the African American community and establish market share and brand loyalty. The industry’s successful use of “cultural tailoring” resulted in a positive dynamic with black leaders and those spheres of influence in which they operate. In this way tobacco and alcohol industry executives have more “bottom line credibility” than those of us in public health.

CHW: Do you see differences between tobacco and food and alcohol, other industries which play an important role in health, both in the way they’ve acted in black communities and in the way they’re perceived in the black community?

ST: Yes. First of all the alcohol and tobacco industries market products that are not required to sustain life, and yet the food industry does. And both the alcohol and tobacco industries have used sophisticated marketing techniques to penetrate the black community with products that are known to be associated with negative health outcomes. Tobacco is the most egregious because there’s no healthy way to use their products, but the alcohol industry has also been very sophisticated in their penetration. For the food industry, it was only recently that we had enough scientific evidence to show that these poor food choices, (empty calories, fat, supersizing), and the marketing of fast food in black neighborhoods is directly related to poor health outcomes.

Billboard for Uptown Cigarettes, a product developed by RJ Reynolds to market to African Americans but withdrawn after community protests.

CHW: Given these differences, how would you suggest that public health researchers and those concerned about health disparities address the food industry?

ST: I don’t think we’ll be able to fight that battle in the food industry the way we did with tobacco because you do have to eat to live, and so it requires a partnership. We cannot demonize fast food like we demonized tobacco. It’s not likely that we’ll have the equivalent of a tobacco settlement with fast food companies. We might consider following the path of the Robert Wood Johnson Foundation, which is partnering with the food industry as a way of trying to address the national problem of childhood obesity. So it is a Faustian bargain when McDonald’s starts distributing pedometers and positioning themselves to be the promoters of physical activity and good health.

CHW: As food companies look to partner, particularly with African American communities, what should communities do in order to ensure fair partnerships?

ST: I don’t think you can have a fair partnership on an unfair playing field. So I can think of no equal partner when you talk about the industry. I think therefore that vulnerable neighborhoods, be they Black, Hispanic, or poor of any color are always at a disadvantage. So they’d end up trading jobs and economic benefits that do not reduce the risk of the products that’s being marketed in the community. I don’t think it could be done fairly, in other words I think that there is a role for the federal government and for regulation in those kinds of interactions.

CHW: The federal government has said eliminating disparities in health is one of its goals. Do you think Federal, state and local government can make real differences in health disparities by targeting the disparity producing activities of the industries that we’re discussing?

ST: Well the goal to eliminate racial and ethnic health disparities outlined in Healthy People 2010 was really set in motion before the current administration was in place. But the current administration has actually supported decreased regulation and an increase in letting the market decide policy. Their focus has been on personal responsibility and as a result, poor food choices and exposure to alcohol and tobacco advertisements have been seen more as individual choices and moral failings rather than actual business practices, business policies, and federal policies that make urban city communities in particular vulnerable. It’s my hope that in Healthy People 2020 we do not lose the focus on eliminating racial and ethnic health disparities. The sevenpart Public Broadcasting documentary “Unnatural Causes” will hopefully raise awareness about the role that policy and poverty and social determinates of health play in population health. However, if you don’t watch public TV you may not even know that the documentary exists. It’s really up to us as a community to use the documentary to mobilize at the local level as a grassroots movement for health equity. I think grassroots movements can affect change at these broader levels where social determinants of health operate. But it cannot be done unless the community is educated.

CHW: As you’ve probably seen, there’s a lot of discussion in public health about how public health advocates frame issues in order to successfully mobilize communities. I wonder if you think there’s potential for using the disparities in health and the racial targeting frames as a way of approaching industry and personal responsibility for health.

ST: I think that the health disparity and health equity frame has created a space to move beyond the biomedical model, organ systems model and the diseasespecific model, so that we really can address these broader issues. The problem is that the language really doesn’t capture headlines. One need only look at the national news to see literally a story every day focused on a new medical breakthrough for some rare and odd disease and seldom do we have that kind of focus on racial and ethnic health disparities. So we need to do work in how to frame our issues also in a very aggressive media market. Currently, there is no national organization currently focused on health disparity. However, this summer will be the founding meeting of the Academy for Health Equity in Denver and I think that’s the nascent beginnings of a national organization to provide leadership in this area. But, like any new nonprofit organization, it is vulnerable to changes in funding cycles and other startup issues. And because they’ve staked out their moral and scientific ground in “health equity”, the organization may not be able to morally take money from pharmaceuticals and other [such] businesses because it would be a contradiction … inconsistent with their philosophical foundation.

CHW: As you know, advertisers, including alcohol, tobacco and food corporations, use cultural and racial ethnic images and themes to sell products that are health damaging. How do you think this targeting is viewed in the black community and does it raise ethical issues for you?

ST: I think the targeting is viewed positively, even if the product is negative, because the images are so compelling. In other words, the industry has trumped public health in understanding how to shape behavior. They have powerful imagery and we have no equivalent in terms of matching this level of sophistication. So when you see a McDonald’s or any fast food product ad that takes place in a black church or has the gospel theme music, automatically black people resonate with that even though the product may be a well known “killer” of black people. Someone inside the public relations firm has tapped into the cultural understanding of black people. And I have yet to see public health counter with our version of this understanding. And even if we did, we’d never get the market share or broadcast time. So here again we are on an unequal playing field: ethnic targeting works. Our aim should not be to criticize it because they’re being successful with promoting negative behaviors, but to somehow harness it to do just the opposite.

CHW: Do you think that there’s room within ethnic targeting to contest how the food, alcohol and tobacco corporations do that? For instance, the “Truth” Campaign around tobacco targeted youth around a specific set of values.

ST: I think that we can attack it but there are several things I’ve seen that diminish my enthusiasm for how effective it can be. For example, we have tobacco companies now doing primetime TV spots, very highly produced, supposedly promoting antismoking among teens. But if you talk to anyone in the professional health communication industry, they will very clearly tell you that the methods being used don’t work. So what you’re seeing is that the industry is using their market share to promote antismoking messages that they already know don’t work. In the environmental area, we have oil companies promoting environmental friendliness. We will soon see alcohol companies promoting “don’t drink”. I don’t think that we can count on them to actually do things that are not in their selfinterest. And so on the surface it looks like they’re promoting health messages and in reality they’re actually using techniques that have already proven to be unsuccessful in health behavior change. We have no equivalent counter point to this type of PR insurgency. . The Truth campaign was excellent, but fragile in the sense that it is vulnerable to funding cuts and it is vulnerable to only being able to be used on one area like tobacco. We need the equivalent of that across the full range of products being marketed that are known to cause disease.

CHW: Let’s say some grouping of public health professionals and advocates working in African American and Latino communities asks for your advice about how to create such a broadbased mobilization. What advice could you give them? What strategy could they take to counter multiple industries and multiple products to compete effectively with these industries in the middletolong term?

ST: I believe we have to think completely outside of the box. I’m going to be radical here for a moment and say that there should be a tax on companies with products that are known to be associated with premature illness and death. These funds would go into a national endowment to support the media campaign, a campaign that is not under industry control and that would use people like Chris Rock and other entertainers to produce the health education message as part of their public service contribution. I don’t think the reach of the entertainment industry can be underestimated in terms of getting the word out. But there has to be a sustainable funding base that’s not so vulnerable to a downturn in grants and those kinds of things.

CHW: What piece of that do you think can happen on the neighborhood level?

ST: I’ll give you an example around the issue of tobacco: in Philadelphia people literally went out and whitewashed billboards where there were tobacco ads. That was front page news; it was highly visible. It definitely mobilized people, but the problem is that it also destroyed property. And when it was all over, after the media cycle, was what next? The billboards were back up. I think that at the local level, we need to have a billboard audit and to have a policy where some percentage of billboards is controlled by the community to promote health and prevent disease.

CHW: Earlier you talked about the role of tobacco philanthropy in the black community. Do you have any suggestions or thoughts about how to raise that as an issue for dialogue and debate within African American or for that matter other communities?

ST: I think it has to be raised by black people. When white public health professionals raise the issue, they never come up with a way of replacing the revenue that’s lost. As a result, a black magazine or a black organization can’t have its national meeting because the revenue’s lost. So it looks like well wishing white liberals not understanding the dynamics of what it takes to sustain black publications or black organizations. It’s like a false choice, a trap. So there have to be credible African Americans leading this charge.

CHW: Perhaps the tax fund that you talked about could offer a real alternative for supporting arts and cultural and other organizations that would address race and class based health disparities.

ST: Absolutely. Unfortunately, black advocacy groups in Washington that could take on this issue have lost their credibility because they’ve taken money from the tobacco and alcohol industries in order to support their lobbying efforts on behalf of the black community. We shouldn’t underestimate the power of the marketplace. If we get African Americans and other minorities to change their habits then we don’t have to rely solely on the practices of advertisers. There is probably some history of how industries have changed simply because the consumer has changed and I think we need to look back and find examples, especially coming out of the civil rights movement, and see if we can replicate it. I also think that we need enforcement. Finally, I would say that we have to look in the mirror as public health officials and harness the new technology of YouTube, the web and Wikipedia to really break out beyond the traditional channels. Right now as you can see with what’s happened with digital music; the whole industry’s business model is upsidedown. That has opened up space for us in public health to use digital media as a way of creating a new space where the playing field is more equal to create innovative messaging that can promote health and prevent disease. I don’t think we’ve done enough in that arena. And we cannot simply complain; we also have to produce. Now is the time for less talk and more action!