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Sunbeam chief blasts AMA
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August 21, 1997: 6:54 p.m. ET
Group cancels endorsement plan, will be paid for informational pamphlets
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NEW YORK (CNNfn) - Sunbeam chairman Al Dunlop lambasted the American Medical Association for reneging on a product endorsement deal, blaming the agency's "internal political problems."
The AMA said Thursday that it made a mistake in agreeing to endorse Sunbeam's health-care products, saying it was revising the agreement to show the deal was educational in nature.
The deal granted Sunbeam exclusive permission to put the AMA seal on nine product lines for five years in return for an undisclosed portion of sales.
While the physician group no longer will accept lucrative royalty payments from Sunbeam, estimated at millions of dollars, it will be reimbursed for the cost of producing information pamphlets that will be included with certain products.
Dunlop panned the revision on CNNfn's "Street Sweep," saying "we entered into a binding contract with the AMA."
Known as "Chainsaw Al" because of his severe cuts when he restructures a company, the outspoken Dunlop expressed mock surprise at the AMA's efforts to distance itself from a widely questioned commercial venture.
"When one enters into a contract after long negotiations, one has an obligation to honor that contract," he said. "We're quite surprised."
The nation's largest physician group was hit with a wave of criticism, some from its own membership, since announcing last week it would allow its name to be used on certain Sunbeam home health-care products, such as blood pressure monitors and vaporizers.
"Our credibility was called into question," said Thomas Reardon, chairman of the AMA's board of trustees. "Our decision to approve the Sunbeam agreement in the form adopted was an error."
But Dunlop showed no sympathy for the organization, saying "they made a conscious decision to do this. In their belief, it was good for the AMA, it was good for Sunbeam, and good for what we call the consumer patient."
Selected Sunbeam products will continue to carry the AMA seal. 
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