Legal and Ethical Considerations essay

in Marketing, Product Safety, andIntellectual Property

Ethical issues relating to marketing and advertising, intellectualproperty, and regulation of product safety

Business ethics is an indispensable tool for all organizations.Adherence to the corporate code of ethics provides an opportunity fororganizations to ensure they operate in a successful manner.Application of ethics is mandatory at different levels of operationsin the business (DesJardins, &amp McCall, 2014).

Ethical Issuesin Marketing

Marketing ethics entails all activities associated with thesales-related issues. Various ethical issues have emanated due todifferent organization’s marketing activities.

The first issue involves marketing of a product that fails to conformto the identified international standards of production.

Secondly, there is the aspect of unhealthy pricing practices. Firmscharge high prices for the commodities they release to the market(Parker-Lue, Santoro, &amp Koski, 2015).

The third ethical issue relates to corruption on the part of anorganization where they focus on the realization of profits at theexpense of the wellbeing of consumers.

Ethical Issuesin Advertising

Advertisements significantly influence the decision by customers tomake purchases for a given product. Firms have the mandate ofensuring they employ ethics in advertising because of the impact ofthe activity on consumers. Despite efforts by organizations to adhereto ethics in advertising, various ethical issues are imminent.

The first regards the need to ensure that as a given firm advertisesits products, it does not taint the image of the other organization’sproduct through comparison. Various firms have been seen to floutsuch rules.

Secondly, firms have the mandate of ensuring they advertise productsthat do not put the health of consumers at risk. Ethical behaviorincludes considering the wellbeing of the customers at the expense ofmaking profits.

Finally, organizations must ensure that effect of their advertisingdoes not result in unfair competition for other firms.

Ethical Issueson intellectual property

The first ethical issue entails the use of ideas presented by anindividual for profit making without their approval. Irrespective ofthe issue in consideration, permission must be sort from theindividuals.

Secondly, using someone’s work in ways that do not benefit them butoneself is unethical negating the need to seek permission from them.

Finally, there is the aspect of firms charging high prices for theirinnovations compared to the marginal costs of production that entailthe use of the innovation.

Ethical Issuesin Regulation of Product Safety

The first regards the provision of wrong information about a givenproduct that eventually ends up causing adverse effects to theconsumers.

Secondly, no success has been realized when it comes to setting up ofregulations that seek to subject organizations into adhering tosafety standards when it comes to the process of manufacturingproducts.

Finally, firms must ensure that they uphold the identified standardsof production to ensure they do not jeopardize the lives of consumersby releasing products that have a detrimental effect on them (Wilcock&amp Boys, 2014).

Examination onViolation of Any of the Issues by PharmaCARE

PharmaCARE violated various issues that have been presented. Thefirst regards the concept of product safety. The company went aheadto release products to the market that impact adversely on the healthof consumers. The realization of the harmful effects of AD23 shouldhave been followed by the commencement of an inquiry into the issue.Further, the organization failed to adhere to the identifiedstandards of manufacture such as those highlighted by the Food andDrug Administration (Griffin, Posner, &amp Barker, 2013). Thecompany introduced a drug to the market that would later havesignificant effects on consumers as attested by the high mortalityrates associated with heart problems.

Arguefor or against Direct-to-Consumer (DTC) marketing by drug companies.

Direct-to-consumer advertising continues to elicit various concerns.The decision to employ DTC technique in marketing drugs presents withadverse effects negating the need to discourage the issue. Firmsadvertising drugs to consumers through the method have a high chanceof encouraging consumers to make purchases even when they do not needthe drugs. Patients would be at risk since they are likely topurchase medications that have not passed through the quality controlchecks that have been established by regulatory agencies such as theFood and Drug Administration. The manufacturers would only befocusing on capitalizing on their marketing strategies to lurevulnerable patients into making purchases. The effect of suchactivities is exposure to other detrimental health effects. The drugscould be having side effects that may have been identified byregulatory agencies and prevented from accessing the marketing. DTCfurther means that firms would focus on manufacturing drugs andsupply them to customers with the goal of making profits. Some wouldgo a step further to evade the approval steps needed before the druggets to the customers. It is unfortunate that if the trend were to beadopted, the chances are that consumers would fall victims ofunscrupulous drug manufacturers who are out to make profits at theexpense of consumers. Relevant regulatory bodies such as the WorldHealth Organization and the Food and Drug Administration shouldtighten measures when it comes to the overall issue of drugmanufacture and eventual supply to consumers.

WhoRegulates the Compounding Companies and what the FDA should have done

Various regulatory bodies exist that have mandate off checking on theactivities of pharmaceutical companies. Pharmaceutical companies haveinternal control mechanisms that have the duty of ensuring thatbefore a given product is released to the market, it has followed dueprocess adhering to all the safety standards needed. In the case ofPharmaCARE, there was a need for the established internal controlsystems to ensure that before the AD23 drug was released to themarket, it had passed through the various safety checks includingthose stipulated by the FDA. Also, the FDA, being the overallregulatory body has the legal mandate of ensuring that it overseesthe activities of drug companies to ensure they operate in an ethicalmanner (Reynolds, Rising, Coukell, Paulson, &amp Redberg, 2014).

The FDA could have moved in to initiate an investigation immediatelythe detrimental effects of the use of the drug were determined. Theagency could have taken steps to identify the source of the drug andhave the organization be investigated. The case of PharmaCARE is anillustration of failure on the part of the FDA when it comes toexecuting its oversight role. The death of over two hundred patientswithin a given duration of time could have served to raise the alarmon what may have been the problem. Through the same, it could havebeen possible to prevent the deaths of so many patients.

PharmaCARE stands to face legal consequences for their actions. Thecompany must have been aware of what they were doing by deciding toestablish a subsidiary and later on sell it to a differentorganization. The company could face a legal suite for the unethicalpractice.

Analysisof PharmaCARE use of U.S. Law to protect its Intellectual PropertyRights

PharmaCARE took advantage of the fact that the United States Lawprotects a given organization’s right on the intellectual side. Thecompany decided to establish a subsidiary, CompCARE that would handleall the affairs related to the sale and distribution of the drug tothe identified customers. Such a move shelved the company from anylegal obligations. Technically, CompCARE would have to bear the legalresponsibility of the detrimental effects emanating from the use ofthe drug. Further, CompCARE was involved in the manufacture of thedrug, because of the same, it would be difficult to have PharmaCAREtake on the responsibility of the effects that resulted from the useof the drug. The discovery by the FDA on the reformulation of thedrug made PharmaCARE establish a different channel through which theycould further their interests. They were able to establish CompCAREto conduct their activities. John has a claim to having been theinventor of AD23. Technically, he was working at the company at thetime of production of the drug, and it was during his usual workingtimes that he was able to invent the drug. Further, being theinventor, he could have taken measures to ensure that he files theinnovation with the relevant bodies for the issuance of intellectualproperty rights. Failing to do so does not nullify his eligibility asthe inventor of the drug. Because of the same, it would be right forhim to claim to be the innovator of the drug.

Three(3) ways the company could compensate John for the use of hisintellectual property

John should be compensated for the same. Being the inventor of theformula, it was mandatory that he be compensated. PharmaCARE madehuge profits from the sale of AD23 drug especially after it wasdetermined that it had positive effects on Alzheimer’s disease. Itis after the innovation that he made that the organization decided toengage in the full manufacture of the drug. John has the right ofensuring that he gets compensation since it was his formula that wasemployed when it came to the production of the pharmaceuticalcommodity. PharmaCARE should take measures that would see to it thatthey compensate him for the same.

Secondly, the company could take action to transfer the intellectualproperty rights to him. Because the drug was discovered to have somebeneficial effects, it could be mandatory to have the company makearrangements to have John take over the full property rights.Transferring the rights to him would mean that he has control overthe use of such innovations (Lybecker, 2016). PharmaCARE would have alimited or no authority to use the innovation for their gain. Johncould take measures that entail arranging for the organization tohave the rights transferred back to him. The company should beprohibited from the use of the drug.

Finally, the company could decide to compensate John for the death ofhis wife alongside the families of those who lost their relatives.However, the decision to do so would be preceded by a discussion withthose affected to determine the way forward.

Exampleof Intellectual Property Rights Theft

A giant automobile maker, Ford Motor Co. was recently accused by aTexas software maker for theft of the intellectual property rights.The software was initially used by Ford in the year 1998 as part ofthe product-development process (Bunkley, 2015). However, Fordterminated the contract in the year 2014 but began using a particularprogram it developed in-house. It was based on Versata’sproprietary software. According to Versata, the technology employedby Ford was generated internally through the technology that it hadlicensed to Ford. The system is known as the Automotive ConfigurationManager (Bunkley, 2015). Versata identifies that the technology savescompanies from recalls through the identification of incompatibleparts of the vehicle. Through the same, the company avoids caseswhere customers make claims on the part of the organization. Theincident that was presented in a District has had an adverse image onthe automobile maker. It does emanate from the fact that theorganization is identified as not adhering to ethical practices whenit comes to the conduct of business.

PotentialIssue Surrounding Death of John’s Wife and other litigants

John’s wife and the other claimants could have suffered from thedetrimental effects emanating from the use of the drug. The use ofthe drug for treatment of both Alzheimer’s and Diabetes could haveincreased chances of the users developing a heart condition. Theissue surrounding the death of John’s wife and the other litigantscould have been the assumption that the drug could be used for twopurposes. It is unfortunate that the drug was later associated withthe probability of causing a heart disease. The death could haveresulted from the use of AD23.

Majorarguments that John can make to claim that he is a whistleblower andthe type of protections that he should be afforded

John has a right to claim that he was the whistleblower owing to themanner in which the entire issue came to be known to the public. Thefirst eminent issue is the fact that he was involved in themanufacture of the drug. Being the lead research scientist engaged inthe formulation of the drug, he was aware of the effects that couldemanate from the use of the drug. He could argue that he was involvedin the entire process of trying out on the possibility of using thedrug to use it against the Alzheimer disease in addition to diabetes.Because of the same, he may have had prior knowledge regarding theutilization of the drug he understood the potential effects thatcould emanate.

Further, John can claim that the organization flouted the FDAregulations relating to the manufacture of the drug. Initially, thecompany was using a particular formula to make the drug used for thetreatment of diabetes. However, they configured the drug in such away that it could be utilized for management of Alzheimer’sdisease. John could argue that the company went against the FDAregulations of seeking consent before reconfiguring the formula ofthe drug and releasing a compound that had not passed through therelevant safety checks. The ability to identify such practicesqualifies him as a whistleblower negating the need to seek protectionagainst the same.

John should be protected from prosecution because he was instrumentalin revealing the dealings of PharmaCARE. His actions helped preventfurther deaths arising from the sale of the drug by the company.

Also, PharmaCARE could decide to dismiss him because of his decisionto report the dealings of the company. He should be protected fromany decision the organization makes that seeks to intimidate himincluding getting dismissed from his job.


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Lybecker, K. M. (2016). Intellectual Property Protection forBiologics: Why the Trans-Pacific Partnership (TPP) Trade AgreementFails to Deliver i. Journal of Commercial Biotechnology,22(1).

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Reynolds, I. S., Rising, J. P., Coukell, A. J., Paulson, K. H., &ampRedberg, R. F. (2014). Assessing the safety and effectiveness ofdevices after US Food and Drug Administration approval: FDA-mandatedpostapproval studies. JAMA internal medicine, 174(11),1773-1779.

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