PR agency receives high fine for violation of advertising ban for medicines

In the Netherlands, it is prohibited to advertise medicines to the general public. The Dutch Ministry of Health, Welfare and Sport enforces strictly and imposes fines up to EUR 450.000 for each violation. A recent judgement proves that this fine cannot only be imposed on the manufacturer, but also on the PR agency that acts in the interests of the manufacturer. Agencies beware!

The cause for the decision was an email from PR agency Edelman to a reporter of a Dutch newspaper concerning a new drug for diabetics. The PR agency employee attached a press release that was actually meant exclusively for the medical press. The reporter wrote a favorable article: “New pill for diabetics”. The Ministry started an inquiry and imposed a fine of EUR 33.250 on Edelman. Edelman challenged the fine before the court. Can the email be qualified as a prohibited advertisement for medicines to the general public? And can a fine be imposed on the PR agency, or can only the manufacturer be held responsible?

Firstly, the court decided that the email does indeed constitute an advertisement for medicines to the general public. The court established that the press release was sent with the apparent goal to stimulate the sales of the drug, which is not allowed.

What about the responsibility for the violation? Again, the court agrees with the Ministry. According to Dutch administrative law, any party that “physically performs” a prohibited act can be qualified as offender. In this case the “physical performer” was PR agency Edelman, by sending the email to the reporter. Moreover, the court finds that the violation can be attributed to PR agency Edelman. Edelman did argue that it acted on behalf of the manufacturers of the drug, but according to the court that does not change the outcome of the case. In this instance, the manufacturers in fact provided Edelman with a clear instruction: the press release was meant only for the medical press.

Conclusion: PR agencies should be careful in relation to advertising rules enforced by the Dutch state. This applies to advertising for medicines, but for example also for health claims for food, tobacco advertising and advertising for games of chance. Violation of these rules is not only a risk for a client, but also for the agency itself. This applies to PR agencies, but also to advertising agencies.

Bram Duivenvoorde