Legal and Ethical Considerations in Marketing, Product Safety, and Intellectual Property - Assignment Example

Ethical and Legal Concerns in Advertising, Product Safety, and Intellectual Property

Today business ethics is mandatory for organizations due to globalization. While legal along with ethical considerations are vital aspects of product safety, marketing as well as intellectual property, ethical issues vary and depend on the social program along with the daily behavior of an organization. A majority of legal along with ethical issues focus on morality principles, correct behaviors, and unlawful acts, expression of moral approvals when referring to behavior principles usually considered as right by people in a particular group. Legal and ethical problems emerge from personal selling, marketing, advertisement, product safety and intellectual property.

• Ethical issues relating to marketing and advertising, intellectual property, and regulation of product safety and an examination of whether PharmaCARE violated any of these issues

In marketing and advertising mix, each element has to be in accordance with the established laws along with restrictions. There are no easy ways when considering ethical issues emerging while performing normal operations (Halbert & Ingulli, 2012). Among the ethical problems that happen in marketing and advertisement concerns the way to be socially conscious. For example, ethical considerations regarding the way a product will influence the targeted audience ought to be considered when marketing a commodity to that group of consumers. The product ought to be evaluated in terms of cultural sensitivity and stereotyping. The advertiser should consider the possible scale of the outcomes, the potential of disastrous results along with the scope of the ethical issue in the company. The company failed to consider ethical standards in its advertisement because it marketed dysfunctional medications and did not comply with the guiding standards for ethical behavior along with the Department of Food Administration authorization when issuing AD23 drug. Besides, the company’s direct-to-consumer marketing influenced the general view of the medications by unqualified consumers without the prescription of physicians.

Regarding the control of product safety, the normal practice of a normal enterprise is to make sure that they offer quality commodities accompanied by a social responsibility to the client (Halbert & Ingulli, 2012). It is expected that product safety experts establish product safety, get certifications for the commodities from relevant authorities as well as investigate and test the commodity based on established standards. Such procedures offer the necessary means by which ethics of a person is tested. According to the CompCare case, safety experts understood the problems with the drug but the management being in favor of increased compensation along with profits that the parent company obtained ignored the dangers. Such is an ethical problem regarding product safety regulation. In our case, PharmCare made an error when it did not follow regulations. It used its reputation to lie to consumers and authorities. First, the company should have sought FDA approval for the reformulated drug prior to distribution in large quantities. On the other hand, the firm established another company as a compounding pharmacy in order to distribute the medication directly to patients on a prescription basis. Besides, the company sold the medication in bulk to doctors, clinics and medical centers against the law

Finally, regarding intellectual property, it is vital to issue the right to safeguard and own individual innovation to a person. Due to the current internet technologies, it appears complex for people to remain in control of their intellectual property because the rights to intellectual property do not exclusively safeguard the concern of secret trade preservation (Bird & Jain, 2008). Today, intellectual property law is concerned with the preservation of the financial outcome of the individual. In the PharmCare situation, the intellectual property ethical issue entails reformulation of the drug. However, the firm was unethical for not complying with the standards of the department of food administration that made the intellectual property of the new drug unlawful. There was research involved to reformulate and maximize the impact of the new drug to reduce Alzheimer’s disease progression. The operation of CompCare to market the reformulated drug was performed on a prescription basis. However, no information was available regarding the formal AD23 renewal registration, which made the intellectual property immature. Finally, the activity of the subsidiary firm meant that John’s individual authorship or the collective intellectual property of his group of experts was lost.

• Direct-to-Consumer Marketing by Drug Companies

Many firms face new challenges to intensify marketing attempts in order to develop their businesses. In marketing, in spite of the medical activity specificity, drug firms practice DTC marketing strategy. On the other hand, this strategy is unacceptable and is due to relaxed regulations as well as insufficient enforcement of the law. The detrimental and beneficial outcomes of DTC marketing are balanced. However, the complexities of the laws by the FDA regarding the practice of DTC together with the need to execute regulations for online DTC demonstrate the inability of authorities to resist the business interest of drug firms in favor of taxes (U.S. Food and Drug Administration, 2013). In turn, this inhibits DTC and increases the possible danger of worsening the illness with new medications with unidentified side effects. Thus, the drug firms motivate purchase of drugs without prescription and dangerous self-medication by encouraging clients to purchase drugs. Consequently, it is right to prohibit DTC marketing by firms for prescription medications because first, marketing associated with medications does not result in public health promotion. Second, it increases the cost of drugs along with the number of unnecessary prescription that can be harmful or deadly. Besides, DTC marketing of prescription medications is unhelpful because it misleads consumers since its aspects are controversial and thus does not offer vital information to consumers. Prescription drugs advertisements place health experts under pressure to prescribe specific drugs, which are ineffective, expensive and dangerous in most cases and disrupts the process of treatment. Besides, it is time-consuming to offer explanations to consumers that certain advertisements misled them.

• The parties responsible, the actions they should have taken, and whether PharmaCARE could face legal exposure over its practices

FDA does not approve compounding medications (U.S. Food and Drug Administration, 2013). The implication of this is that the FDA does not do the verification of the safety or efficiency of compounded medications. However, doctors along with consumers depend on the approval of drugs for safety and effectiveness of the drugs as well as improved quality. Since compounding ought to be investigated and licensed to ensure the needed standards of drug production, the State authorities have this responsibility (U.S. Food and Drug Administration, 2013). State board helps through inspection of the mixing, planning, packaging along with labeling of medications that encompass the compounded drugs. After the PharmCare situation, there is a necessity to issue additional authority to the FDA. Because state boards supervise the completely manufacturing process of drugs, supervision is inadequate because of the numerous pharmaceutical firms. The FDA involvement in federal boards will ensure correct along with close supervision of all production along with packaging phases are embraced. The extra FDA powers linked with the compounding of drugs may encompass the right to investigate compounded medications by licensed firms in licensed companies at the state level. Besides, the FDA ought to have the power to hinder further compounding if ineffective medications are being produced. In this case, the role of the company was disregard towards the future health of patients. The research team issued a drug with substantial defects that caused deaths. Besides, the FDA did not approve the new formulation of the drug, which means the FDA would have scrutinized the company. Thus, it is possible that PharmCare will be prosecuted due to negligence.

• How PharmaCAREprotected its Intellectual Property using the U.S. law and if John can Claim that he is the true “inventor” of AD23. Three (3) ways in which the company could compensate John

In the United States, the intellectual property legislation safeguards the intellectual work right. Outsides the U.S borders, the performance of business operations implies that the company ought to follow international regulations regarding intellectual property (Bird & Jain, 2008). PharmCare established a CompCare to formulate the new drug and sell it based on prescription medication in order to safeguard the parent company against new manufacturing from the U.S regulations. Thus, the company was able to patent its reformulated drug and operate under the safety of the patent and trademarks regulations. John could not be the sole inventor of the reformulated drug because he was an employee and he developed researches on the drug under the conditions of the organization. Consequently, John’s involvement was restricted by applied labor work in assisting the firm to research and develop the new drug. Besides, John worked in the research group that had already formulated the object of a collective intellectual property.

The firm may make John the co-founder of the reformulated drug following preceding legalization or registration of the new medication in order to reward him. Besides, the company may promote John's career development and encompass his name in a list of scientific partners. The rewards from the sale of the new drug ought to be shared between research teams that involves John and the company. Besides, in the case of the death of John's wife, the firm ought to compensate him. However, since the new drug was part of the company's intellectual property, the company is accountable for its side effects.

• An Example of Intellectual Property Theft, and an examination of the impact on the Specific Company’s brand

Former employees of Brewer Science, Hai had stolen trade secrets along with equipment designs from the company and used them to established a new company identified as Best Tools, LLC (Brewer Science, 2015). The employees collaborated with foreign manufacturers and started producing and distributing equipment that was in direct competition with the tools manufactured by Brewer Science. They went ahead and advertised the copied equipment as quality American manufactured commodities even though they were produced in a foreign country and did meet the specifications of quality that customers were promised. While the produced tools appeared and argued to be identical to the products of Brewer Science, they lacked the precision, quality along with abilities produced by Brewer Science. In turn, this resulted in the loss of profits by Brewer Science along with increased expense in research and development.

• The potential issues related to the death of John’s wife and other possible litigants against PharmaCARE as a result of AD23

The drug led to the death of a number of patients that encompassed the wife of John. In the other hand, the company was not concerned with the deaths of numerous patients along with the deterioration of health of others because the company used significant amounts of financial resources for compensation and continued to market the new product. If the company had dedicated enough time and focused carefully on the functionality of the drug, it would have discovered the side effects. In turn, the company would have offered a safer replacement and ensured the health of patients. The result would have been a long-term business success with the avoidance of patient deaths along with health deterioration. Besides, following the discovery of the possible harmful side effects, the company would have chosen to withhold the release of more drugs and study in detail the reported side effects. Thus, the possible issue with the company encompasses illegal along with unethical behavior and ensuring the safety of its clients and workers.

• The major arguments that John can make to claim that he is a whistleblower and the type of protections that he should be afforded

The protection of a whistleblower establishes the way a firm or a government treats a person who reports illegal activities in light of another player of socioeconomic associations that can be examined and offer evidence of the fault of the accused player. If John applied for protection during his supervision from the Human resource executive director, the department of food administration or the labor union he could be a whistleblower. Such authorities have the responsibility to make sure that the confidentiality of a whistleblower is maintained along with non-retaliation. He was aware of the negative effects of the new drug, but he was unaware of the deaths that also involved his partner. In turn, this provoked he to seek assistance from the law firm in which he was led by his working experience at the company, an understanding of the company's plans as well as he had an internal memo of the firm that offered explanations regarding the possible issues with the new drug. Consequently, as a whistleblower, he was not responsible for the harmful side effects of the new drug and he could inquire for adequate protection.

In conclusion, the PharmCare case is concerned with the legal along with ethical issues that the firms in the pharmaceutical sectors follow along with the impact of the use of new drugs. The new medication was anticipated to a top selling medication as well as hinders Alzheimer's disease progression. The firm performed unethical promotion to provoke demand. The outcomes indicated a sharp increase in sales. However, the drug had negative side effects that encompassed deaths and health deterioration among patients. Consequently, an ethical company would have withheld the release of the new drug to investigate the reported side effects. On the other hand, the company ignored the harmful effects, continued with the marketing of the new drug, and disregarded ethical along with legal issues.