Recently, health professionals and others have taken notice of actions by pharmaceutical giant Eli Lilly & Co. to increase the volume of sales for its antidepressant drug, Prozac. Critics suggest the company has launched a major advertising program and sponsored other efforts to induce greater consumer demand for this prescription medication. At the heart of the issue is an expenditure of several million dollars by Lilly to sponsor ads that urge people who think that they might be depressed to see their doctor.

The American Psychological Association says such advertisements will encourage patients to see their primary-care physician, rather than a psychologist (who cannot prescribe medicine) to address their depression. Primary-care physicians would be more likely than mental health professionals to rely strictly on medication to treat depression. Critics suggest that Prozac is already overpre¬ scribed and that it is an appropriate treatment for only about 1/3 of its current users.

Lilly has countered the criticism by suggesting that the ads it sponsored were not intended to promote its drug Prozac, but were instead intended to promote awareness of mental health.

According to the Mental Health Association, the advertising campaign is expected to reach 93% ofAmerican adults.

[SOURCE: Elyse Tanouye, “Critics See Self-Interest in Lilly’s Funding of Ads Telling the Depressed to Get Help,” Wall Street Journal (April 15, 1993), p. Bl. Reprinted by permission of the The Wall Street Journal, © 1993 Dow Jones & Company, Inc. All Rights Reserved Worldwide.]

a. How could Lilly’s advertising have been construed by critics as being in¬ tended to increase the volume of Prozac sales?

b. Discuss the ethics of using advertising to generate demand for prescription drugs.

c. Would the advertising be more or less ethical if it were directed at health¬ care professionals rather than consumers? Discuss.

d. Discuss whether advertising of medical products, including drugs, should be more strictly regulated by government agencies.

CHAPTER 12 Variable Costing and Cost-Volume-Profit Analysis 565 LO1