How Corporate Advertising Compromises the News on the Net. Take the Case of Politico and Big PhRMA Emails.

July 29, 2019

Excerpt from Politico Pulse email dated July 25, 2019.

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The impact of corporate advertising on the news can be particularly nefarious on the Internet. Take for instance a July 25, 2019, early morning email from Politico called the “Politico Pulse.” The lead item in the news email is about efforts to lower drug pricing:

PHARMA GETS AN AUDIENCE WITH TRUMP — Drugmakers bent the president's ear on Wednesday, POLITICO scooped, as industry lobbyists ramped up efforts to kill administration plans intended to lower drug prices in the U.S., such as linking them to an international index.

Steve Ubl, the CEO of PhRMA, was joined by representatives of Pfizer and Amgen. PhRMA's been lobbying heavily against a Senate Finance Committee package that would cap some drug-price hikes, too.

Lowering the costs of medications is a perennial promise of politicians. Even Trump has said he would come up with a plan to reduce pharmaceutical pricing, particularly in relation to Medicare. Obviously, this is a significant news item, particularly because the Senate and the White House have been floating the idea of tying US prices for Medicare medication to those in 16 other countries.

Obviously, the US pharmaceutical firms (some of them owned by international corporations) are not pleased with this proposal. However, the US Government Accountability Office (GAO) found that when,

We looked into changes in the drug industry and found that pharmaceutical and biotechnology sales revenue increased from $534 billion to $775 billion between 2006 and 2015. Additionally, 67% of drug companies increased their annual profit margins during the same period—with margins up to 20 percent for some companies in certain years. Drug industry spending for research and development increased from $82 billion in 2008 to $89 billion in 2014.

US pharmaceutical firms regularly argue that high prescription prices are necessary to conduct expensive research to create new drugs. However, the GAO’s findings undercut that stance by showing that the price spent on research and development did not keep proportional pace with the expansive revenue of the drug industry.

Given that reducing medication pricing is a current issue, one that Politico reported on its July 25th email, it is worthy of note that the corporate sponsor of the email was none other than Big PhRMA. You can read the sponsoring message in the screen shot reproduced at the top of this page. Whatever Politico’s take on the international indexing of drug pricing, it is offset by the paid promotion of Big PhRMA explaining why that industry thinks the concept is a bad idea — and one can speculate was connected to the Politico email scoop on Big PhRMA directly lobbying Trump.

The sponsored paragraph (which has been in several Politico Pulse emails “Presented by PhRMA”) leads to a longer article that claims to set the “record straight on international reference pricing.” The article is authored by Kevin Haninger, Vice President of International Advocacy at the Pharmaceutical Research and Manufacturers of America (PhRMA). Haninger concludes:

While not a new idea globally, international reference pricing would be an entirely new approach to health care in the United States, upending the only truly market-based system in the world. In America, market competition determines the net price of a medicine, patients have faster access to more medicines than anywhere else in the world and doctors and patients work together to decide which medicine is right for them. Policymakers should keep these facts in mind and work toward the right reforms instead of copying the flawed policies of other governments.

In short, Big PhRMA buys a platform from Politico that amplifies the news that the publication is reporting on, and Politico, one assumes, makes a nice profit from placing the public relations “message” in the email that hardly makes it distinguishable from Politico’s reporting on the topic. That certainly compromises the objectivity that one should take away from the email.

Then there is the issue of “native advertising” on the Internet. Take, for example, a July 9 email from The Hill that is entitled “The Future of Healthcare.” The Hill does disclose that it is “sponsored content,” but it is written in a journalistic fashion. Similar to the Politico Big PhRMA message, The Hill email presents opposition to the idea of any forced government reduction of drug costs. The sponsor is the Biotechnology Innovation Organization (BIO).

BIO makes a similar case to the one Big PhRMA makes in the Politico email. In the BIO sponsored article, which takes up the entire Hill email, there is no question about BIO’s intended message:

Overall, the costs of innovation must be seen in the proper perspective: the patients’ perspective. The value of innovative biopharmaceuticals to patients and their loved ones often can’t be measured in dollars. For many, it’s a matter of life and death.

That’s why it’s critical for patient-centered solutions that promote progress and improve access to new medicines while reducing out-of-pocket costs for Americans. It’s also why the current state of the debate is so troubling. The intense focus on price controls, weakened intellectual property protections, and restricted access to medicines will not only stifle innovation for future patients, but will do very little to make medicines more affordable for today’s patients.

Advertising has always been an integral part of journalism. In general, with some exceptions, it is what pays the bills for reporting the news — and for many news companies provides them with a profit. However, on the Internet it is much easier for news and advertising, in the guise of public relations, to blend together.

This is particularly true because Internet readers tend to quickly browse through emails and articles. Sometimes, they are not even aware of where the news ends and the public relations/advertising begins. The Hill “sponsored content,” for example, ends with a hyperlink to a site called Drug Cost Facts. Of course, the content of the site consists of “the facts” as biotechnological medication development firms see them, and the wording is obviously meant to convey the certitude that reason and “facts” are in opposition to any effort to reduce drug costs.

What we learn from these two examples from Politico and The Hill emails is that many Internet sources of news are wounding their credibility by their profiteering off of “sponsorship” that poses a potential conflict of interest with their reporting, in this case on the pharmaceutical industry. We are sure that Politico and The Hill will aver that their advertising departments are distinct and separate from their journalism divisions. That may very well be true, but reporters are not unaware of who is financing their news companies, and this creates a context in which reporting can be compromised.

This, of course, also applies to other forms of news gathering such as television. News corporations are not in the business of alienating their advertisers.

The Politico and The Hill examples should remind Internet readers to be mindful of being cognizant of the thin line that separates reporting from advertising. That is not always easy to do considering the fast-paced delivery of emails and the endless ads and “native advertising” on Internet sites.

However, vigilance is the only way to avoid getting sucked up into glib arguments for profiteering, such as this one on DrugCostFacts.org:

News stories frequently suggest that prescription drug costs are “skyrocketing.” But the reality that’s reflected across the country is quite different than the one portrayed in most media reports, which typically focus on isolated examples.

In fact, prescription drugs costs — both the prices for drugs and how much money society spends on medicines — have been remarkably stable in recent years.

When reading your email from news sources, let the reader beware, because these PR/advertising tactics are not uncommon as online news outlets look for more “inventive” ways to monetize their readership.

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