Marketplace: News Archives

Thursday, September 14, 2000
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It's Thursday, the 14th of September. I'm David Brancaccio.

Some big guns once trained on the tobacco industry are now pointed in another direction. Attorneys in both California and New Jersey have filed class-action suits targeting Ritalin, the drug widely prescribed for hyperactive children. The suits claim that the drug's maker, Novartis, "conspired" with the American Psychiatric Association to create a market for Ritalin. Helen Palmer is at the Marketplace health Desk.

Palmer: "Millions of American children have been diagnosed with Attention Deficit Disorder, ADD, or the allied problem of Attention Deficit Hyperactivity Disorder, ADHD. Experts reckon as many as seven million kids take drugs like Ritalin every day to control their symptoms. But that regime has its critics."

Breggin: "The concept of ADHD is fundamentally fraudulent."

Palmer: "Psychiatrist Peter Breggin, author of Talking back to Ritalin, is advising lawyers who've filed suit against the drug's manufacturer and the American Psychiatric Association. Breggin says ADHD merely describes a set of symptoms, the symptoms of any normal child faced with bad, boring teaching in an overcrowded classroom: squirming, fidgeting and inattention. But that analysis is contested by the drug's manufacturer, Novartis, and the American Psychiatric Association's spokesman John Blamphin."

Blamphin: "These illnesses are indeed real. They do exist and the treatments are very effective for them."

Palmer: "Both the defendants say they have not yet seen these suits, but Blamphin called allegations that they conspired to 'create' a market for drugs like Ritalin 'absolutely ludicrous and totally false', a response echoed by drug firm Novartis' Gina Moran."

Moran: "Any charge that Novartis somehow conspired with professionals or patient groups is unfounded and preposterous."

Palmer: "Ritalin has been a solid and consistent performer for Novartis. It'll earn the company some $200 million this year, and new formulations of the drug in different strengths are likely to boost its value. That makes this lawsuit bad news, says Mehta Partners drug analyst Mark Ravera."

Ravera: "The greatest concern here is that this would be a public relations problem and refocus the attention of the media and regulators on the perceived overuse of Ritalin."

Palmer: "For the defendants, what happens in the court of public opinion may be a least as important as what happens in a court of law. From WGBH in Boston, I'm Helen Palmer for Marketplace."

Corporate logos and commercials are everywhere and a new General Accounting Office study confirms a trend we've long reported on, the growing visibility of commercial messages in public schools. It's a trend that state and local authorities are reacting to in different ways. Marketplace's John Dimsdale reports.

Dimsdale: "Corporate marketing in schools is a growth industry according to the GAO. The nation's 47 million students have become an irresistible audience for the sellers of everything from soft drinks to computers to sneakers to shampoo. At the Center for Commercial Free Public Education, director Andrew Hagelshaw says commercialism in schools is different than in any other place."

Hagelshaw: "In school, where students are required by law to be present a certain set number of hours per day per year, students are really a captive audience for any type of brand name that can get there. And companies know this."

Dimsdale: "But Don Fuller, of the National School Boards Association, says some school districts have decided that partnerships with corporations are beneficial. Colorado Springs is one example."

Fuller: "They were tired of tax increases. The school was able to work with a couple different companies to provide some revenue to provide educational services for kids."

Dimsdale: "But California Democratic Congressman George Miller, one of the sponsors of the GAO study, says local control is fine as long as parents know what's going on."

Miller: "We understand that many schools are looking for additional resources. But they ought to understand the full ramifications of that and they ought to involve the parents of the children."

Dimsdale: "Congressman Miller is supporting a bill to require parents consent before a student may participate in marketing research in schools. In Washington, I'm John Dimsdale for Marketplace."

This week, the Federal Trade Commission took the entertainment industry to task for specifically targeting the under-17 crowd with fare suitable for those 17 and over. The FTC did not question the general idea of targeting ads toward kids, who are believed to influence an estimated $400 billion worth of purchases a year in this country. For the third year now, the advertising industry is handing out awards to the best commercials focusing on the kiddie market, but not everyone is applauding as Aaron Schachter reports.

Schachter: "This is a seemingly harmless commercial for Mott's Applesauce. But if you ask any of the 50 or so psychologists and educators protesting the Golden Marble Advertising Awards being held in midtown Manhattan, they'd tell you looks can be deceiving."

Lin: "We think its wrong to reward creativity in the service of manipulating children for profit."

Schachter: "Dr. Susan Lin is one of the demonstrators and a psychologist at Harvard Medical School. She says marketing to children has increased more than 20 times over the last ten years with negative repercussions."

Lin: "Well, one of the things we are concerned about it childhood obesity. Obesity has been linked to television viewing."

Schachter: "Most commercials that air during children's peak viewing time are for snacks and fast food, followed by toys, such as dolls, action figures and video games. In New York, I'm Aaron Schachter for Marketplace."

When last we talked it looked as though Britons were settling in for the long haul, as a nationwide blockade of oil refineries caused panic at the petrol pumps and had consumers stockpiling. Marketplace's Steven Beard now tells us the strikes are over, but some very serious problems remain.

Beard: "Many of the farmers and truckers protesting against fuel taxes ended their action today, saying they did not want to inflict further hardship on the public. After a week of blockades, three quarters of all gas stations had run dry. Supermarkets have been rationing bread and milk and hospitals have been canceling non-urgent operations. Even though the oil trucks are now rolling, they won't prevent businesses from suffering damage. Chris Humphreys of the Chambers of Commerce says the total loss to British industry will add up to more than $1.5 billion. For many smaller firms, he says, the crisis is anything but over."

Humphreys: "We're seeing businesses reporting the need to start laying off staff or introducing short working from tomorrow, unless they get fuel today. It's that critical an issue."

Beard: "It could be two weeks before all gas stations have been restocked. Throughout the crisis the British government has been determined not to follow the French government's example and make concessions to the protesters. But Prime Minister Tony Blair has clearly been shaken by the strength of this popular revolt. Opinion polls suggest that in spite of the disruption 85 percent of the British people support the protesters. The Prime Minister is now hinting there could be some changes in fuel taxation later this year. In London this is Stephen Beard for Marketplace."

Did you catch Part One of our foreign currency tutorial yesterday? We talked to a flower exporter in Holland who is enjoying the falling European currency because it allows him to reduce the price he charges U.S. buyers. He sells more, and dollar profits can be converted into more Euros. Well, foreign currency tutorial Part Two came today courtesy of the Colgate-Palmolive Corporation. It's shares fell a dramatic 16 percent today, after the company said its profits were suffering because the low Euro makes its stuff more expensive in Europe, hurting sales, and European profits that remain convert back into fewer dollars.

McDonald's profits are also being hurt by the Euro and its stock fell five percent, which in turn hindered the Dow, which dropped 94 points or 0.9 percent. This despite benign inflation news today in the form of the government Producer Price Index which fell 0.2 percent in August. The Nasdaq Composite went up half a percent.