Legal and Ethical Consideration in Marketing, Product Safety, and Intellectual Property essay


Legaland Ethical Consideration in Marketing, Product Safety, andIntellectual Property



Legal and Ethical Consideration in Marketing, Product Safety, and Intellectual Property 3

Ethical Issues Related to Marketing, Product Safety, and Intellectual Property 3

Marketing Ethical Issues 3

Ethical Issues of Advertising 4

Ethical Issues of Intellectual Property 4

Ethical Issues of Product Safety Regulation 5

Direct-to-Consumer Marketing 5

Parties Responsible for Regulating Compounding Pharmacies 7

Analysis of How PharmaCare used U.S. Law to protect its Intellectual Property 8

Recent Example of Intellectual Property Theft 9

Analysis of the Potential Issue Surrounding the Death of John’s Wife 9

Major Arguments Supporting John as a Whistleblower 10

Conclusion 11

References 12

Legaland Ethical Consideration in Marketing, Product Safety, andIntellectual Property

Legal entitiesare required to adhere to ethics and social responsibility in theireconomic activities. Marketing, product safety, and intellectualproperty are some of the areas under which legal and ethicalguidelines have to be followed. An organization is obliged to providetruthful and accurate information in the marketing of its products.Besides, the products manufactured must be safe for use by consumers.Furthermore, the intellectual property of a particular company iscopyrighted. Hence, other entities lack the mandate to exploit thetrade secrets of their competitors.

EthicalIssues Related to Marketing, Product Safety, and IntellectualPropertyMarketingEthical Issues

The societyexpects companies to adhere to high-quality marketing practices. Inparticular, drug companies must present honest and accurateinformation about their products. The primary reason for thisrequirement concerns the safety and well-being of consumers who willuse the drugs. Moreover, ethical issues in marketing involve thesetting of reasonable prices along with fair marketing. In thisregard, selective marketing practices should not be used todiscriminate consumers from different ethnicities or social status(Eagle &amp Dahl, 2015). A company risked marring its reputation ifit engages in deceptive marketing.

The drugs produced by a pharmaceutical company must fulfill thehighest standards of quality and safety. The business must belicensed to issue approved products that treat specified illnesses.For example, marketing would be rendered as unethical if the drug wasalleged to treat conditions other than those approved by theregulatory body. Concealing the composition of pharmaceuticalproducts would be classified as unethical (Eagle &amp Dahl, 2015).Drug companies are expected to avoid pressurizing consumers topurchase a particular product. Stereotyping and corrupt practicesshould be barred from marketing. Furthermore, political affiliationsshould not be used to dictate marketing strategies (Eagle &amp Dahl,2015).

PharmaCareviolated some of the ethical issues related to commercialization. Forexample, the company understated the adverse effects of the drugs asthey had been linked to hundreds of cardiac-related fatalities. Thepayment of hefty sums as compensation proves the liability associatedwith CompCare. Additionally, legal guidelines on the manufacture ofAD23 were not followed. PharmaCare bribed the physicians so as tocreate fictitious patient files for CompCare. The company had failedto reveal the altered components of the drug. The marketing practiceswere offensive and unfair since they targeted hospitals and clinics.The pursuit of profit superseded the satisfaction of customer needssince the drugs were harmful and unlicensed.

EthicalIssues of Advertising

Advertisement ofa drug product is associated with ethical issues such as pricing,disclosure, and safety. Moreover, the advertising methods used musttake into consideration the characteristics of prospective consumers.Risky products should not be advertised, especially when consumershave a desperate need for treatment. Legal methods of advertisingmust be used with due regard to the competitors (Healey, 2015).PharmaCare advertised defective drugs that had shown negative resultsduring trials. In addition, the company overstepped the authority ofregulatory bodies by issuing unlicensed products.

EthicalIssues of Intellectual Property

A copyright isissued when a new product is released into the market. Consequently,the producer obtains intellectual property (McJohn, 2015). Medicalcompounding refers to when a pharmaceutical company claims a newproduct that already has a restrictive copyright (McJohn, 2015). Adrug company has the ethical duty to reveal the identity of thecopyright owner before circulating any product. Furthermore, thecopyright owner must be duly compensated for his intellectualproperty. Invariably, trade secrets, trademarks, and patents must berespected. Stealing a copyright or unfair treatment of the creatorwould be construed as unethical.

PharmaCarealtered the composition of the drug although it had been classifiedas intellectual property. The reformulated drug was non-compliant tostandards established by the regulatory body. Therefore, thecopyright was illegal. AD23 was used to slow the development ofAlzheimer’s disease. Nevertheless, the drug was not officiallyregistered as intellectual property. Consequently, John was notaccorded his legitimate authorship of the drug.

EthicalIssues of Product Safety Regulation

Drug companiesare obligated to acquire approval from regulatory authorities beforeproceeding to market a product. Consumers are confident thatadvertised products have been approved for use. Therefore, promotingunlicensed drugs betrays consumers’ trust. An independent body hasto conduct objective tests aimed at ensuring the quality and safetyof pharmaceutical products (Eagle &amp Dahl, 2015). PharmaCareviolated ethical standards by failing to provide evidence of the safeuse of AD23. Marketing the drug despite its harmful use showed littleconcern for patient needs. Quality standards and consumer legislationhave to be ensured before a product is marketed to the generalpopulation.


Direct-to-consumer(DTC) advertising refers to the marketing of prescription drugs usingonline platforms as well as TV, radio, newspapers and magazines (FDA,2015). Celebrities and other fictional characters are used to portraythe satisfactory effects of using a particular drug. DTCadvertisements could be help-seeking ads, reminder ads, or productclaim ads. The Food and Drug Administration (FDA) acts a safeguard toensure that drug advertising is accurate and truthful (FDA, 2015).

Granted,consumers obtain useful information that may improve their health.Besides, public health is enhanced by encouraging people to holddiscussions with health care providers. In other instances, promotionhelps to eliminate the stigma associated with particular diseases.Nevertheless, DTC advertising should not be used by marketingcompanies to advertise drugs. This is because misleading or falseinformation is sometimes presented as factual. Consequently, someconsumers purchase wrong drugs in the treatment of their diseases.Additionally, DTC advertisements do not provide comprehensiveinformation about the adverse effects and risks of the medicine (FDA,2015). In many instances, some negative effects are downgraded oroverlooked altogether. Each individual reacts differently to aparticular prescription (AMA, 2015). Therefore, advertising thegeneral characteristics of a drug product fails to address the uniquereactions of an individual.

DTC advertisingcould threaten public health by spreading information aboutpotentially harmful drugs. Some patients have developed an addictionto prescription drugs owing to the advertisements made in mainstreammedia outlets. Increasing sales usually motivate advertisers ofpharmaceuticals as opposed to improving personal and public health(AMA, 2015). In this regard, they emphasize the merits of costlymedicine at the expense of cheaper forms of treatment.

Therefore,consumers are exposed to advertisements seeking to exploit theirfinances. Desperate patients are vulnerable to sensational promotionsthat exaggerate the effectiveness of particular treatments. The useof celebrities to promote drugs exploits consumers by leveraging thesuccess of famous personalities. Many physicians have been pressuredto prescribe advertised drugs even when better drugs could treat thecondition. In this respect, watching DTC ads has led many patients tobe adamant on prescriptions by not permitting their doctor to decideon the optimal course of treatment (AMA, 2015). Consequently, DTCmarketing should be outlawed in the U.S. in imitation of otherWestern countries.

PartiesResponsible for Regulating Compounding Pharmacies

PharmaCaremanifested little concern for the safety and well-being of consumers.The company was primarily concerned with profit maximization ratherthan fulfilling the needs of prospective clients. The research teamshould have halted the release of the new drug due to the numerousdeaths. In this regard, the research and development team ignored thepreventive measures that would have helped to reduce the incidence ofnegative effects. Besides, the company’s executives bear someresponsibility for permitting the harmful drug to be presented in theconsumer market. Granted, the research team could not have foreseenthe potential adverse effects of using AD23. Understandably, theywere hampered by an inability to pinpoint the effects of drugexploitation on competitors.

The FDA had notapproved the reformulated drug. However, the regulatory body failedto act so as to shut down the sale of the drug on prescription basis.Besides, the FDA ought to have noted the expansion of PharmaCarewithout an increase in production of current drugs. In addition,PharmaCare had diversified by forming a subsidiary to support thesale of AD23. Therefore, the FDA should have interpreted suchexpansion as probable evidence of illegal activity. The regulatorybody had an obligation to conduct periodic checks of businesslicenses and product composition. Consequently, the FDA should bearultimate responsibility for the proliferation of illegal activityunder its watch.

Analysisof How PharmaCare used U.S. Law to protect its Intellectual Property

The legislationof copyrights protects the owner of the intellectual property bygranting him exclusive use of a brand or product. U.S. laws allowcompanies to set up subsidiaries in foreign countries. In thisregard, PharmaCare formed CompCare as its subsidiary. Thenewly-formed corporation was tasked with preparing the new drug andselling it on prescription basis. Moreover, the company used Americanlaws stipulating the combination of financial statements. Therefore,the profits from CompCare were not immediately discernible since theywere interlaced with the legitimate returns from the parent company.Consequently, PharmaCare patented the reformulated AD23 drug. Thelaws on trademarks and patents granted the company ownership rightsof the new drug.

John was part ofthe research and development team tasked with developing the newdrug. Any breakthrough made by any of the team members was creditedto the efforts of the whole team. An individual could not rightlyclaim to possess the copyright for an innovative development.Furthermore, John had been employed by the company under a validemployee contract. Therefore, the successes he achieved while workingat the firm were essentially attributed to the enterprise.Consequently, John has little claim to being the true inventor ofAD23.

Granted, thecompany could use several ways to recognize John’s efforts andcompensate for the use of his intellectual property. For example,PharmaCare should advance a significant financial sum to John so asto purchase his intellectual property. Moreover, the company couldengineer an arrangement whereby John received regular payments as acut of the profits (McJohn, 2015). Besides, PharmaCare shouldconsider including John among the company’s scientific partners. Hemay also be named as a co-founder so as to boost his careertrajectory. It could be proper for the firm to compensate John forthe death of his wife. In this respect, the company would be showingdue recognition of the responsibility it bears for the harmfuleffects of its products.

RecentExample of Intellectual Property Theft

In the recentpast, Microsoft Corporation suffered loss of intellectual propertydue to the machinations of Sichuan Changhong Electric Company (Tu,2013). Microsoft accused the Asian electronics company of stealinglicensed data during discovery operations. The stolen information wasused to override the safeguards of particular software. Nevertheless,Microsoft did not suffer considerable damage in its public image.Such an outcome was because the software company had installedcertain algorithms to prevent program contamination and computerfraud (Tu, 2013).

Analysisof the Potential Issue Surrounding the Death of John’s Wife

The use of theharmful drug led to the untimely deaths of many consumers.Unfortunately, John’s wife was among the deceased. As mentioned,hundreds of patients died as a direct result of ingesting the drug.Furthermore, many other patients developed health complications.Granted, the company paid significant sums of compensation to theunfortunate victims. Nevertheless, PharmaCare persisted in itsmarketing and advertising of the product. Although the outcomes fromthe use of AD23 were obvious, the company was unrelenting inproduction and distribution. The firm had manifested appallingnegligence in highlighting the contraindications for the drug’suse.

The company couldbe rightly accused of pursuing profit at the expense of consumersafety and well-being. If the company had shown due regard for humanlife, they would have halted the continued production anddistribution of AD23. Foregoing commercial success would have been anact of good faith when future lawsuits were filed against thecorporation. The drug should have been withheld until further testswere conducted to inform of its safety. PharmaCare had alsojeopardized the careers of its employees by participating in illegalactivity.

MajorArguments Supporting John as a Whistleblower

A whistleblowerrefers to an insider that decides to report unlawful or dishonestpractices from first-hand knowledge and experience. John was privy toinformation about the adverse side-effects of AD23. PharmaCare hadcirculated an internal memo that outlined the potential complicationsassociated with the new drug. Additionally, the firm had planned totake chances with the drug regardless of the expected side effects.Consequently, John was morally obligated to inform the authorities ofthe harmful practices orchestrated by the corporation. As hislawyers, Dewey, Cheatem, and Howe had to act on the matter presentedby their client.

However, Johnfaced stigmatization if the firm discovered his actions. PharmaCarewould have ostracized him in the event it became known that anemployee had violated the confidential clause in his contract. Johnrisked being fired or sued by his employer. Therefore, his identityhad to be safeguarded by the relevant authorities. The Human ResourceManager at PharmaCare was the initial contact charged with protectingthe whistleblower. If a conflict of interest ensued, then the laborunion could offer John asylum until the allegations were investigatedand established as fact. Although John was an employee with a bindingcontract, particular situations concerned with public safety wereviable grounds for breach. Additionally, the FDA would provide legalprotection for the whistleblower since the matter concerned thesafety of a drug product.


PharmaCare hadviolated ethical and legal guidelines in promoting AD23 as a new drugfor stemming the development of Alzheimer’s disease. Hundreds ofconsumers had perished from using the drug. The FDA had not yetprovided official approval for the safe use of the drug.Notwithstanding, the company continued to advertise the drug usingits newly-formed subsidiary. The clamor for business profitsovershadowed the need to ensure the safety of consumers.Consequently, PharmaCare must be held accountable for illegal andunethical practices of advertising and marketing the new drug.


American Medical Association. (2015, Nov. 17). AMA Calls for Ban onDirect to Consumer Advertising of Prescription Drugs and MedicalDevices. AMA. Retrieved June 7, 2016 from

Eagle, L. &amp Dahl, S. (2015). Marketing ethics &amp society.Los Angeles, Calif.: SAGE.

Healey, J. (2015). Advertising standards and ethics. Thirroul,NSW.: The Spinney Press.

McJohn, S. M. (2015). Intellectual property. New York, NY:Wolters Kluwer.

Tu, J. I. (2013, Dec. 17). Microsoft security unit files first theftcase. The Seattle Times. Retrieved June 7, 2016 from

U.S. Food and Drug Administration. (2015, Dec. 23). From themanufacturers’ mouth to your ears: Direct to consumer advertising.FDA. Retrieved June 7, 2016 from