July 8, 2002

MEDICAL PAYOLA

AND YOU THOUGHT THE RADIO SCANDALS OF THE 1950S WERE BAD?

By Mark Elliot

The same kinds of people who now work in the promotion departments of the big pharmaceutical companies have worked elsewhere. Their trail can be found in our everyday language.

When I look it up in the dictionary, "Payola" is a contraction of the words "pay" and "Victrola" (record player). This word entered the English language via the record business.

When disc-jockey Alan Freed was fired from WABC Radio in 1959, the practice of accepting money and gifts for playing certain songs on his popular program had become a national scandal and the subject of a Congressional investigation.

The man who coined the phrase "rock n’ roll" had also accepted gifts from record companies which, though legal at the time, were later found to be inappropriate.

So, did we suffer grievous harm from what Freed did?

According to the courts, we did. Before Alan Freed's indictment, payola was not illegal, however, but commercial bribery was. After the trial, the anti-payola statute was passed and payola became a misdemeanor, a penalty up to $10,000 in fines and one year in prison.

Rest assured, if you listen to music there is some modest protection from obviously fraudulent radio practices.

However, if your doctor accepts a gift, such as cash or a vacation trip from a drug company in exchange for his/her participation at an "educational seminar" or "professional training session", and then writes you a prescription, say, for an unnecessary (and expensive) anti-depressant, that’s perfectly legal!

Why are we protected from unscrupulous record company types, but not from the influence of unscrupulous pharmaceutical company types?

This is all about having an effective lobby group, isn’t it?

Alan Freed was charged with income tax evasion by the IRS for $37,920 tax on unreported earnings of $56,652 for the years 1957-59. That means he was taking in $18,884 per year for what subsequently led to his infamy in the Payola Scandal.
Today, many doctors who are on the take make far more than that. In fact, a trip to a conference can cost the drug industry thousands of dollars for transportation alone. In fact, the small sums made by Freed are really a laugher compared to the outlandish "support" some doctors receive for their good will and loyalty to industry.

Time for a Medical Payola Scandal? And should it come to pass, let’s also try to find out what some of these medical payola superstars are getting under the table.