Pharmacy Ethics: Legal and Ethical Issues in Drug Marketing

Introduction

This paper reviews the legal and ethical considerations at play in the case study scenario surrounding Pharmacare and Compcare. As quickly becomes apparent while reading the case, the company engaged in a long and extensive list of ethical and legal violations as a means to maximize profit and minimize the regulatory oversight that exists for very good reason. The ethical issues involved will be identified and analyzed. The paper also explores direct-to-consumer marketing of drugs, whether John is the "inventor" of AD23, the arguments regarding John's status as a whistleblower and the protections he would be afforded, and examples of intellectual property theft from recent years. While adverse drug events do incidentally occur when medications are marketed to the public, there is a clear line between incidents that are unforeseeable and those that are improper or even criminal in nature.

Ethical and Legal Violations by Pharmacare and Compcare

There are a number of legal and ethical issues that abound in the case study. One of the first is the way in which Pharmacare created the wholly owned subsidiary Compcare as a means to bypass scrutiny from the Food and Drug Administration (FDA). These regulatory barriers and milestones are in place for good reason, and Pharmacare is unethical at minimum — and lawless at worst — for using a shell company to circumvent them. However, that aspect of the AD23 process was only the first way in which a secondary company was used for financial and legal advantage. It would certainly be promising to explore whether AD23 could slow the progress of Alzheimer's disease. Nevertheless, the aggressive and far too hasty reformulation of AD23 to maximize its perceived benefits for Alzheimer's patients led to a large number of cardiac events. Indeed, several hundred people apparently died as a result of taking the reformulated version of the drug. Had the reformulation gone through proper trials and testing, these cardiac issues almost certainly would have been identified before the drug reached the marketplace. This is not to say that Pharmacare would have escaped all liability for cardiac deaths even under proper approval. However, the manner in which they brought the drug to market — and the deaths that followed — will place Pharmacare in serious legal jeopardy, even after cutting ties with Compcare. The harmful version of the drug was developed and sold while Compcare was still owned by Pharmacare, making that connection legally significant.

The two related companies also violated the law concerning the ban on compounding pharmacies selling drugs in bulk for general use. Compounding pharmacies are not legally permitted to operate in that fashion, but Pharmacare and Compcare pushed forward to maximize revenue. They attempted to exploit the different regulatory rules that apply to compounding pharmacies to bring the drug to market, and then sold it in bulk — a clear violation of applicable law (Lipworth, Kerridge & Day, 2013).

Perhaps the most serious ethical and legal problem, however, emerged after Compcare was spun off. Within just a few weeks of the ownership change, signs appeared suggesting the drug was likely unsafe, as cardiac events began to arise. Rather than halt sales, issue a recall, or at least slow the marketing of the reformulated AD23, the company continued to sell the drug. This eventually led John — one of the individuals pivotal in reformulating the drug — to act as a whistleblower and call for change. It is notable that John did not appear to raise concerns until after his wife died from taking the drug. On the other hand, he surely would have told her not to take it had he known of the risks in advance. In that sense, the company is clearly acting wrongly while John is attempting to do the right thing.

The corporate decision-makers, both before and after the split, who circumvented the law must be held accountable by the appropriate ethical and legal authorities, up to and including criminal charges. This applies particularly to those who continued marketing the drug despite its dubious and illegal development history and the known safety concerns. It is also significant that John's wife was taking AD23 for diabetes, not Alzheimer's, suggesting there may be safety problems with the drug across multiple formulations or dosages. Any version of the drug should be analyzed and removed from the market if found to be unsafe (Lipworth, Kerridge & Day, 2013).

One additional ethical issue, perhaps less immediately obvious, concerns the practice of paying bonuses tied to prescription volume. Consider the analogy of a drug like OxyContin: rewarding employees based on how much of a potentially addictive medication they sell is ethically dubious, given that opioid-derived drugs frequently ensnare patients who are using them for entirely legitimate medical reasons such as back pain or war injuries. The same principle applies even if the stakes of a diabetes drug are somewhat lower. Had AD23 been developed and marketed properly and the same commercial outcomes occurred — absent the deaths — that would be a different matter entirely. However, Pharmacare skirted legal and ethical rules from the outset, and its singular priority appears to have been pushing the drug as aggressively as possible, regardless of the consequences (Das, 2012).

Direct-to-Consumer Drug Marketing and FDA Oversight

When it comes to direct-to-consumer drug marketing, it is difficult to give a definitive answer. However, given the totality of the implications, it would probably be wise to dial back or even ban the practice in certain contexts. At the very least, some categories of drugs warrant greater caution before pervasive advertising is permitted. Consumers freely making choices about most purchases is perfectly reasonable and accepted. However, when it comes to antidepressants or drugs for chronic conditions such as diabetes, different rules should apply. As one example, real-world medical practice has long established Metformin as a first-line treatment for diabetes, yet most patients would never know this from consumer advertising. Patients will rarely, if ever, know as much as a trained physician about which drugs are appropriate, which should be avoided, and why. Beyond that, many brand-name drugs — especially those still under patent — are extremely expensive, while therapeutically equivalent and far cheaper alternatives often exist.

It is worth acknowledging that some restraint is already evident in industry practice. One would be hard-pressed to find widespread consumer advertising for opioids such as Vicodin or benzodiazepines such as Xanax. Drugs for diabetes and depression, by contrast, are heavily advertised — Tresiba and Abilify being clear examples. In general, while free markets and consumer choice are important values, both should be grounded in informed consent based on timely and accurate advice from a physician — not in response to a television advertisement.

This is not to suggest that physicians are entirely free from pharmaceutical influence. The case study itself illustrates how fictitious doctor names were used to pad prescription counts — a regulatory matter for the FDA. However, not all physicians yield to such pressure. Many strive to provide the best advice and most appropriate treatments based on their patients' individual health situations, rather than what is most profitable for the drug manufacturer or the prescribing practice (Das, 2012).

Regarding what the FDA could or should have done: it is troubling that Compcare, at Pharmacare's direction, was able to exploit the compounding pharmacy regulatory framework to bring a drug to market and then sell it in bulk — in clear violation of both the letter and spirit of the law. Compounding pharmacies serve a legitimate and valuable purpose when a standard formulation or dosage is unsuitable for a specific patient. That is the appropriate use case. It is deeply concerning, however, that Compcare was able to flood the market with a drug that had never gone through the standard FDA approval process without any regulatory intervention. The fact that it took more than 200 cardiac deaths and a whistleblower to attract regulatory attention is simply not acceptable. The Ford Pinto case offers a sobering parallel: in that instance as well, it took fatal and fiery accidents to prompt media, public, and regulatory attention (Lee, 1998). In both cases, regulators failed to do their jobs. When public health and safety are at stake — whether in pharmaceuticals, automobiles, or children's toys — regulatory oversight must be robust and impossible to circumvent.

Conclusion

In the end, it is clear that Pharmacare and Compcare broke the law. Wellco's legal exposure appears considerably less severe, but the company will almost certainly be drawn into the fallout to some degree regardless. What occurred in this case is criminal in nature, and individuals should be charged and prosecuted wherever possible. Any corporate-level indictment or penalty will unfortunately affect many employees who had no involvement in the wrongdoing. However, this kind of corporate culture and ethical failure cannot be permitted to continue unchecked. Companies that act in good faith and follow proper regulatory processes should not face undue harassment from lawyers or government agencies. Companies like Pharmacare, on the other hand, must be made an example of — both to deliver justice and to deter similar conduct in the future.

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