Legal and Ethical Considerations in Marketing - Essay Example

? Legal and Ethical Considerations in Marketing, Product Safety, and Intellectual Property Introduction The mentioned case study focuses on a companynamed PharmaCARE that operates its business in Colberia. The unethical practices adopted by the company ranges from the ill behavior towards the local people of Colberia to that of the whistleblowers in the company. Their deeds were not limited to these; rather, PharmaCARE also was alleged for conducting breach of intellectual property rights that resulted in injuries to its consumers at a large scale. This essay hereby intends to focus on the unethical practices conducted by PharmaCARE in Colberia highlighting on the steps that it could take for the protection of its intellectual property and mitigation of the mentioned issues. Correspondingly, recommendations have also been provided in the essay so as to mitigate the identified challenges. Ethical issues relating to marketing and advertising, intellectual property, and regulation of product safety Use of negative advertisement techniques The use of negative techniques refers to the adoption of comparative advertisement strategy by the companies. In this unethical practice, the advertisement focuses on the disadvantages of the competitor’s product. Arguably, in the modern phenomenon, this technique has become a major tool for promoting the utility of the products of a particular company (Majtan & Dubcova, n.d.). Misleading or dishonest advertisement It is one of the most serious ethical problems that have been observed as commonly used by many of the advertisers in the modern day. It involves not only misleading facts about the product but also false impression forecasted. Any advertiser who fails to promote the truth of the product not only goes against morality but also against the law as it violates customer protection rights to information. The advertisement must also not include any kind of false statement regarding the product or claim for the dishonest value of that product (Majtan & Dubcova, n.d.). Copyright infringement It is one of the most serious unethical issues that are observed in the field of intellectual property. Notably, the copyright infringement occurs whenever a person who does not own the copyright violates any of the rights of others without permission. The most common practice found in this aspect is breach of reproduction right and invention of new work base under the existing one (Tehranian, 2007). Use of unsafe raw materials in the production Many of the companies use cheap quality material in the production of its final product for the sake of earning maximum profits. They do not keep consumer health or stakeholders’ interest into consideration being highly concerned about the profitability of their company. For example, in a free market, if a health drink manufacturing company uses cheap quality ingredients in production, it would ultimately affect the health of the consumers offering the company with profits, but only for a limited period in the short-run, inhibiting the company’s sustainability interests to a substantial extent (Dufferin-Peel Catholic District School Board, 2013). Argue for Direct-to-Consumer (DTC) marketing by drug companies The sponsorship of pharmaceutical drugs through Direct-to-Consumer (DTC) has much significance in the current market scenario as it promotes customer confidence and provides better opportunity to the company to align the marketing strategies with customer preferences to a greater extent. In the US, majority of the drug companies have been found spending double than the total amount in DTC marketing technique (Mogull, 2008). On the contrary, there exist many customers who are strictly against this technique of advertising on grounds that because the technique requires substantial financial investments, the drug companies focusing on direct-to-customers selling concept have to spent maximum money on advertising rather than on research and development. However, considering its positive effects, the Food and Drug Administration (FDA) has approved this technique as it states that DTC provides its consumers with accurate and consistent information regarding the medicine being marketed. It also believes that DTC arranges for a better communication between the consumers and medical practitioners regarding new medicines and therefore, contributes to possible remedies for the disease. Hence, DTC marketing also permits the drug companies to make their consumers and medical professionals aware of the existing products and those which are approaching for future. Hence, from the aforesaid study, it can be affirmed that drug companies are major beneficiaries from DTC marketing (Mimikos, n.d.). Regulation of compounding pharmacies under the current regulatory scheme and role of Food and Drug Administration (FDA) in the scenario The compounding pharmacies need to abide by the act of combination and alteration of ingredients, in order to meet a specific medication requirement of a patient on the receipt of a proper medical prescription. Usually, the regulation of compounding pharmacies is controlled by the state boards of pharmacy along with the federal and state legislation bodies. Correspondingly, state boards of pharmacy are allotted with the power of enforcing regulations relating to the compounding pharmacies. The state and federal law affirms in this regard that a pharmacist can compound drugs even if he/she does not have the written prescription for medication but have the potential chances to receive it in future (Lindon, 2012). Notably, FDA has the complete authority to regulate the compounding of pharmacies, wherein it has always been successful in accomplishing its role as a controlling body in this dimension of healthcare practices. As a controlling body, FDA is therefore entitled with the power to ban or permit or regulate the consumption amount of a particular drug that can be prescribed by compound pharmacists, differentiating the more severe drugs from others. In simple words, FDA also plays the role to differentiate between the drugs that can be prescribed by the compound pharmacists and those which are strictly meant for doctor’s permission (Markey, 2012). After the study of the role played by FDA in compounding pharmacy, it can be said that FDA must be assigned with more power to expand and successfully accomplish its responsibilities in a suitable manner in the 21st century context. The reason for this is that FDA knows the distinction between traditional and non-traditional compounding and regulates the pharmacists engaged in the practice of compounding pharmacy. FDA also provides assistance to the patients in case of scarcity of drugs and promote for public health. Thus, looking after these services, it can be concluded that FDA must be assigned with more power in compounding pharmacies (Markey, 2012). Ethical justifications of PharmaCARE’s use of Colberian intellectual property Utilitarianism The basic meaning of utilitarianism is the concept, which describes the “scope and freedom of individual liberty under the state authority” (Debate Central, n.d.). According to one of the famous philosophers, Jeremy Bentham, it can be stated that utilitarianism is an act, which aims to determine any act as ethical if it brings happiness and pleasure at the end to all the involved parties (Debate Central, n.d.). Assessing the operations conducted by PharmaCARE, it can be observed that the company functions as a completely profit driven company, which exploited the labor force of Colberia paying them extremely lower wage as compared to the industry standards and also infringing intellectual property rights that affected the competitors of the region at large. Hence, as per the study of utilitarianism, it can be stated that PharmaCARE is applying complete unethical practices in Colberia, which is although giving it happiness, but is affecting the interests of its stakeholders, including customers, employees and competitors at large. Deontology Deontology confirms ethical practices believing that morally justifiable actions are only conducted on the basis of morally justified duties and responsibilities. Unlike utilitarianism, it focuses on the rightness of the action rather than the consequence drawn from the action (University of Delaware, 2013). This ethical practice had no existence in the PharmaCARE in Colberia as it involved in all kinds of unethical practices. Based on this theory, it can be argued that if PharmaCARE would have adopted the principles of deontology in conducting ethical practices, it would have paid right wages to the labors of Colberia along with due attention to the interests of its other stakeholders. Virtue ethics Virtue ethics refers to a philosophical attempt to identify one’s personal behavior rather than depending on the external customs and laws of the society (British Philosophical Association, n.d.). Thus, it is the responsibility of PharmaCARE to identify its future strategies when focusing on the application of virtue ethics. In this regard, PharmaCARE must identify its unethical practices in Colberia and take effective measures to discontinue the same and involve in good deeds in order to attain virtue ethics. Ethics of care The ethics of care theory emphasizes on the anxiety for other’s feelings and needs along with the care of oneself. It requires a substantial amount of moral awareness in order to maintain balance between care for oneself and others (Paulsen, 2011). Contradictorily, this ethical practice was completely missing in PharmaCARE of Colberia. In this context, the company had been concerned for self needs only, interested in earning profits with almost no significance to its stakeholders’ interests. Under such circumstance, it was the prime responsibility of PharmaCARE to also consider the stakeholders’ feelings rather than being only focused on increasing profits causing ethical conflicts as per ethics of care. Ethical compass PharmaCARE, being a drug manufacturing company must possess its own morality and ethics while running business in Colberia. It must realize that using the labors with relatively lower wage is an unethical practice towards them, hampering their interest of financial security. On the other hand, the termination of three of the employees without any reason is also an unethical and unlawful behavior raising job security issues in an unethical manner. Even the intellectual property rights infringement conducted by the company can also be regarded as a major attribute of the unethical behavior conducted by the company. Use of the US law to protect the intellectual property of PharmaCARE in Colberia PharmaCARE can opt for the US law to protect their intellectual property in Colberia. After the study of the mentioned scenario in Colberia, it can be recommended that PharmaCARE can use the US law as it provides a global system to put into effect a set of rules for the protection of intellectual property. It can take the assistance of Trade Related Aspects of Intellectual Property Rights, which provides with a set of rules to the drug companies for the protection of their patent rights and also controlling of the medicine price. Apart from this, PharmaCARE can also opt for ‘U.S. Trademark Law, Rules of Practice, 37 C.F.R. 2 et seq. & Federal Statues, 15 U.S.C. § 1051 et seq. and 35. U.S.C. 1’ as it is designed for the protection of patent, trade name and other forms of intellectual property. Thus, it can adopt policies for safeguarding its copyrights and increase the authenticity of its products using this particular provision (Management science for health, 2012). Suggestions to PharmaCARE for compensation to the people of Colberia for use of intellectual property and damage to environment PharmaCARE has applied many of the unethical practices such as payment of low wages to the local people of Colberia and misuse or rather stealth of intellectual property rights of the old medicinal technique. In this scenario, they must arrange for compensation to the local tribal of Colberia and also for the remedy of the hazards caused to the environment. Initially, the company must arrange for the registration of patents for the Colberian old tribal medicine in its brand name. Correspondingly, it must provide monetary compensation to all the labors with the profit that they had earned from stealing of their intellectual property, ensuring adequate pay structure abiding by the industry practices. The company must also ensure adequate compensation to be paid to the tribal people concerning its intellectual property infringement acts. Comparison of PharmaCARE’s actions with that of a real world company’s unethical action In this section, the comparison of PharmaCARE actions with that of Pfizer’s unethical operation has been conducted. Pfizer was involved in the unethical practice of testing one of its powerful drugs in Nigerian market, targeting children as the focused consumer segment. This particular act by the company, being a pharmaceutical brand, indicated its failure to manage its brand in the most sustainable manner and thereby, protect the interests of its stakeholders (Dam, 2009). Similarly, PharmaCARE was involved in unethical practices in terms of payment of lower wages, stealing of other’s intellectual properties from the tribal people and creating hazards in the environment of Colberia. It not only affected the environment but also disregarded the welfare of its employees and the local stakeholders to a substantial extent. Even though Pfizer had adopted unethical practices to test the authenticity of one of its high dose medicine, its actions had caused severe harm to its targeted groups, similar to the case of PharmaCARE (Dam, 2009). Success derived by the PharmaCARE and WellCo shareholders in suit against the companies If a case is filed against PharmaCARE by WellCo’s shareholders in the US court, the shareholders would definitely derive certain benefits from it as a competitor brand. The shareholders of WellCo can take the help of FDA in order to prove that PharmaCARE had inhibited their interests in the market on the grounds by inhibiting customer confidence and by way of breaching the intellectual property rights of the tribal people in the region. As these grounds are considered to be major grounds for unethical practices by compounding pharmacies, the FDA can determine these practices as unethically adopted by the company and will support the WellCo shareholders (Markey, 2012). Determine whether or not PharmaCARE lives up to its brand As per the study on the operations of PharmaCARE in Colberia, it can be affirmed that the company gave much of its focus on the development of its brand image. For the sake of building up its brand image, it had stolen the traditional medication method of the tribal of Colberia and therefore performed intellectual property infringement. As apparent, the company acted too much profit oriented and was constantly adopting unethical practices to raise its profit. It also used cheap quality materials in the production process, which also resulted to failure in maintaining its brand. To be specific, these actions although rewarded the company with a high profit margin, it inhibited the sustainability of the brand not only in the short-run but also in the long-run. Hence, after the study, it can be concluded that PharmaCARE was unable to live up to its brand as a pharmaceutical company, due to its unethical practices. Recommendations of three changes that PharmaCARE can make to be more ethical Based on the study of the case of PharmaCARE it can be recommended that, Firstly, PharmaCARE must disregard all the unethical practices of affecting the environment, not paying wages to the local labor and implement ethical values such as deontology, utilitarianism within the company. Secondly, in doing so, the company must develop a structured and all-inclusive code of ethics and ensure that it is strictly followed by all the members. Only developing the code of ethics would not work, but they must also make sure that all the members of management team and the employees are strictly maintaining those rules. Thirdly, the company must involve in the manufacturing of drugs with the use of healthy ingredients and also keep health measures into consideration. It must not use harmful products which can cause harm to the human health and thus, involve in the maintenance of its brand image with due significance to its ethical implications in the market. Conclusion From the above study of PharmaCARE in Colberia, it can be affirmed that the company was completely profit oriented and took some of the unethical steps to raise their profitability. It was involved in the non-payment of wages to the Colberian labors and above all they stole their old method of medication, which can be regarded as breach to intellectual property rights. Conclusively, it can be thus affirmed that the company needs to restructure its brand policies, labor policies along with its vision and mission with the aim to perform in an ethically justifiable manner. This would not only assist the company in ensuring better customer satisfaction to support its brand image, but will also promote employee morale and stakeholder support for the brand. 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