AMA Pulling the Plug on Deal With Sunbeam

The American Medical Assn., saying it made a mistake, on Thursday backed away from a product endorsement scheme with Sunbeam Corp. that critics had condemned as a sellout of the physicians group.

The nation’s largest medical group issued a statement signed by the chairman of its board, Thomas Reardon, and the executive vice president, P. John Seward, saying the decision to approve the pact with Sunbeam “was an error.”

“As a result, our credibility was called into question. The AMA apologizes for creating public doubt about our motives,” the statement said. “We take full responsibility for actions on our part that may have eroded our credibility.”

But the appliance maker, whose home-health-care products were to have received the AMA’s first-ever endorsements and the use of the group’s logo in exchange for a percentage of sales, appeared unwilling to let the AMA off the hook.

“We have a contract with the AMA, which we are prepared to honor, and we expect them to honor it as well,” Sunbeam Chairman Al Dunlap said.

“If they are willing to meet with us to discuss any issues that concern them--without putting preconditions on the results of such a meeting--we continue to be willing to meet with them. If not, then we will not hesitate to take all necessary actions to ensure that the rights of Sunbeam and its shareholders continue to be protected,” he said.

In an interview on CNN, Dunlap said he was “surprised to see they’re [the AMA] having internal political problems” with a deal the AMA initiated.

The physicians group said it now wants to limit its association with Sunbeam to providing consumer information brochures inside packages of products, and would like to do the same for other companies’ products as well.

There will be no point-of-sale endorsements, it said, and any money it gets from Sunbeam will be used to cover the costs of producing the informational material.

The AMA was hit with a wave of criticism, some from its own members, since announcing last week that it would allow its name and seal to be used on Sunbeam products ranging from thermometers and air cleaners to blood pressure monitors and vaporizers.

Sid Wolfe, head of the Health Research Group, an arm of Ralph Nader’s Public Citizen Inc., told the AMA board in a letter released Thursday that most doctors “are thoroughly disgusted with . . . a prostitution-like arrangement.”

“There is little question that the widespread adverse publicity given to this reckless deal has already damaged the reputation of the AMA and will unquestionably result in a further exodus of thousands of physicians from AMA membership,” he said.

Lew Crampton, AMA vice president for communications, said “some percentage of product sales” would have gone into the AMA’s pockets under the deal as originally drafted. How much, he said, would have depended on product sales.

He said the money would have been used for health education efforts but admitted there was “ambiguity about our motives” as far as the public was concerned.

Sunbeam shares eased 38 cents to $43 on the New York Stock Exchange.