Ethical And Legal Issues Related To Product Safety, Marketing, And Intellectual Property Research Paper

Length: 5 pages Sources: 5 Subject: Sports - Drugs Type: Research Paper Paper: #34100951 Related Topics: Fda, Legal Issues, Ethical Considerations, Public Personnel Administration
Excerpt from Research Paper :

¶ … Marketing, Product Safety, and Intellectual Property

Legal and ethical considerations

Ethical issues

PharmaCARE intentionally bypassed the Food and Drug Administration when it established CompCARE a compounding pharmacy. This was done in order to avoid FDA scrutinization, which indicates that the company was aware of the side effects that the drug would have on patients. By evading FDA scrutiny and approval, PharmaCARE was able to sell the new formulation on a prescription basis without the need to seek approvals. CompCARE was not supposed to market directly to consumers, but it still conducted direct marketing to consumers and hospitals. Furthermore, the company encouraged doctors to fax them lists of fictitious patient names. This was done to demonstrate that the company was not selling directly to consumers, but rather it was doctors who were prescribing the drug to the patients.

When reports started surfacing indicating that the drug was causing heart attacks, the company did not remove the drug from the market. The company ignored the data and continued to market the drug without informing patients on the side effects of the drug (Halbert & Ingulli, 2011). This was ethically wrong because the company is ethically required to let patients know of the drug's side effects. With such information, patients would be left to decide if they still want to take the drug. The company was in direct violation of Direct-to-Consumer marketing and advertising of the drug.

PharmaCARE also violated intellectual property ethics. The company used the invention that John and his team had developed for its own gain. The prerequisites of obtaining a patent hindered John and his team from obtaining one for AD23. The company did not respect the inventions of John, and it copied and replicated the inventions for its own gain. PharmaCARE opted to pay John huge bonuses out of the sales of the drug, which was in violation of intellectual property ethics. PharmaCARE sold CompCARE to a store chain shortly before the drug AD23 was linked to cardiac deaths. This sale transferred the intellectual property from PharmaCARE to WellCo, which meant that John's invention had been sold without his consent and approval. Though John was working for PharmaCARE when he developed the drug, the company should have realized that he owns the intellectual property for the drug and should not have sold it off in the manner they did.

Parties responsible for regulating compounding pharmacies

The state pharmacy boards do the regulation of compounding pharmacies. No drugs produced by a compounding pharmacy are subjected to the FDA premarket examination. There are no other regulatory bodies that can examine the drugs before they are sold to the market. This is because compounding pharmacies do not manufacture drugs, but rather they modify the ingredients of a drug to create a new medication. The new medication is tailored to a specific need or treatment. The quality and safety of all consumer products is the responsibility of the FDA (Liu, KNOx, & Brushwood, 2013). Therefore, the FDA should have conducted research and examined the drug when reports started surfacing of its effects to patients. The legislation signed by President Obama in November 2013 gives the FDA powers to oversee the compounding pharmacies (U.S. Food and Drug Administration, 2013). This new legislation gives the FDA enough


PharmaCARE intentionally avoided FDA scrutiny by forming a new compounding pharmacy. Doing this allowed the company to manufacture and sell the drug much faster. The FDA should have examined the drug and to determine if it has any dangerous compounds. This would have helped to reduce the number of cardiac deaths associated with the drug's usage.

It is not likely that PharmaCARE will face any legal exposure for forming a compounding pharmacy, but it could face legal exposure because of ignoring to inform consumers of the side effects of the drug. PharmaCARE ignored reports of the drug causing heart attacks to the users and chose to continue selling the drug. If there is any evidence found to indicate this fact, then the company could be sued by the relatives of the patients. The information that John has from the internal memo is enough to expose the company to legal issues. Marketing the drug and failing to inform the consumers of its negative effects is illegal, and this has the potential to expose PharmaCARE.

Using the U.S. law to protect its own intellectual property

PharmaCARE used the U.S. law on intellectual property by patents. The company was able to register a patent on the drug formulation, which prevented any other drug manufacturer from producing or selling the same drug as AD23. John or his teammates could not register the patent because they all had equal claim over the discovery of the drug. They all had equal knowledge, and it would be unfair to grant one of them the patent (Kim, Lee, Park, & Choo, 2012). With this in mind PharmaCARE managed to register a patent for the drug, which gave the company sole ownership. John could be the true inventor of the drug, but there is no legal proof to back his claim. John developed the drug while he was working for PharmaCARE, and this give the company ownership of his inventions. If he had invented the drug at his own facility, he could have laid claim over this invention.

PharmaCARE should have given John a better salary and provided him with a better working environment. The huge bonuses that were paid out to John and the executives were as a result of the sales from the drug, but the company still profited more from the sales. The company could have offered him some company stock as compensation for using his intellectual property. This would give John the impression that he is part of the company, and he benefits from the usage of his invention. The hardship John underwent when developing the drug should be recognized by the company. PharmaCARE could publicly acknowledge that the invention of the new drug was due to John's efforts. This acknowledgement would boost his confidence and loyalty towards the company. Having sold off CompCARE, the proceeds from this sale could have been shared with John. This is because the only reason the CompCARE was established was for the sale and production of AD23, which was John's invention. The sale should have benefited John the most since it was his invention that was been sold.

Potential litigants against PharmaCARE

The death of John's wife brings fore the potential for legal suits against the company. Having lost his wife it is clear that John was not aware of the drug's side effects yet he is the one who invented the drug. The lack of further research and testing on the drug resulted in the deaths reported. The company managers and executives did not see a need to inform or report on the findings or reports they had received in regards to the drug. The company will be faced with multiple lawsuits all because the company was aware that the drug caused heart attacks and did not disclose this fact on its advertisements or on the product labels. PharmaCARE continued to produce and market the drug through CompCARE even after they discovered that the drug was harmful to human health. The internal memo that John has demonstrates that the company was well aware that the drug was harmful. John and other litigants could use the internal memo to launch a suit against the company. The suit would be successful because there is compelling evidence that the company was aware of the drugs side effects, but opted to continue manufacturing the drug. John cannot be accused in any way because he also lost his wife after she used the…

Sources Used in Documents:


Halbert, T., & Ingulli, E. (2011). Law and ethics in the business environment. Boston, MA: Cengage Learning.

Kim, Y.K., Lee, K., Park, W.G., & Choo, K. (2012). Appropriate intellectual property protection and economic growth in countries at different levels of development. Research policy, 41(2), 358-375.

Liu, W., KNOx, C.A., & Brushwood, D.B. (2013). Discretion of the Food and Drug Administration to enforce compounding rules. AMERICAN JOURNAL OF HEALTH-SYSTEM PHARMACY, 70(17), 1538-1543.

Peffer, S.L., Bocheko, A., Del Valle, R.E., Osmani, A., Peyton, S., & Roman, E. (2013). Whistle Where You Work? The Ineffectiveness of the Federal Whistleblower Protection Act of 1989 and the Promise of the Whistleblower Protection Enhancement Act of 2012. Review of Public Personnel Administration, 0734371X13508414.
U.S. Food and Drug Administration. (2013). The Impact of Direct-to-Consumer Advertising. from

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