The Lap-Band-Wagon: Why Allergan Is Turning a Surgical Device Into a Political Cause

Last Updated May 18, 2010 4:59 PM EDT

Allergan (AGN) has launched an unusual social media campaign for the Lap-Band: It's urging people to petition Congress for legislation favoring weight-loss surgery options like the adjustable gastric band. First prize in a promotional contest is a trip to D.C. where the winner will present the petition to Congress.

The effort is unusual for a pharmaceutical brand: It's organized as if it's a political campaign rather than an act of advertising. MM&M, a drug trade publication, said it looked as if Allergan had lifted a page from the Tea Party. In addition to as-yet undefined legislation, Allergan also aims to change the culture around obesity, by redefining it as a "disease" rather than a "choice." Allergan wants consumers to highlight the effort on Facebook, Twitter and all the other social media tools.

Of course, there's more than a principle at stake for Allergan. The Lap-Band is mostly not covered by health insurance in the U.S. As it costs about $14,000 out of pocket, only the wealthy can get it. CEO David Pyott told investors recently:

In the U.S., we believe that the cash pay portion of our business, which is extremely sensitive to the economy and unemployment, has now bottomed out. And that we're beginning to see growth in the reimburse segment of the market. This LAP-BAND cash pay business was disproportionately impacted, relative to the facial and breast aesthetics businesses as the out-of-pocket expenditure at over $14,000 is the highest.
If you look at Lap-Band revenues at Allergan over the last three and four years, you'll see that sales have plateaued (the numbers are listed under "obesity intervention" on pages 2 and 3 of those reports). Allergan -- which may have been emboldened by its success in getting rid of a proposed "Botax" from the healthcare reform bill -- will have real difficulty in growing sales if it cannot get healthcare reimbursers to pay for it.

So this is more than just a social campaign about "prevention" and "stigma" issues. It's real lobbying, for real money.


Image: Before-and-after pics from Allergan's Lap-band web site.