Legal and Ethical Considerations in Marketing, Product Safety, and Intellectual Property

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The pharmaceutical industry is one of the most regulated industries in the entire world since it is entrusted to give health professionals as well as individuals advice on the use of drugs. It is also an industry that expects the stakeholders to act with the highest level of the code of ethics that is recommended by the regulators such as Food and Drug Administration (FDA). The pharmaceutical companies determine the drugs that are released in the market; hence, they should ensure that they are of high quality and do not pose any threat to the consumers. It is in this regard; therefore, that it is expected of the companies to provide drugs that meet the legal standards as well as ensuring the safety of the drugs manufactured. Moreover, the companies should ensure intellectual property is protected by not using the inventions of other individuals to gain profit. This paper will focus on PharmaCARE’s manufacturing of the AD23 drug.

Ethical Issues Relating To Marketing, Intellectual Property, and Regulation of Product Safety

An ethical issue that is related to the field of marketing is deceptive marketing. It is a form of marketing that sells a product to the customer without giving them comprehensive information about the product. Most of the companies engaging in this form of marketing do not disclose the negative aspects of the product for fear of losing customers to other companies or products. As a result, this method of marketing does not employ the ethical code of disclosing critical information to the customer before they decide to purchase a particular product. The company markets a product which has the potential to cause harm without the knowledge of the consumer. 

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Intellectual property requires a company not to use the inventions of others to make profits without the owner’s permission. It is unethical to use products that have been developed by other individuals to make huge profits but at the same time not agreeing with the inventor on the modalities of the use of the product as well as sharing of the profits gained from the sale of the product. It is unethical to make money out of a product that has been developed by another part without their consent (De George, 2005).

The regulation of the product safety is also a key concern that is supposed to be considered by a pharmaceutical company as they try to act in an ethical manner. One of the ethical issues that are experienced is the failure of a company to adhere to the set rules and regulations by the authorized body concerning the safety of drugs. If a company does not focus on the regulations set by the concerned body intentionally, it is an act of violation, and the company is not acting ethically. Moreover, it is unethical to harm a consumer by not considering their safety in the manufacturing of drugs (Noordin, 2012). 

PharmaCARE violated all the ethical issues that have been identified above. First and foremost, the company marketed a product to the consumer when knowing that it has the potential of causing harm. The consumers are also not aware of the side effects of the product. It is also evident that the company has violated the safety regulations by not adhering to the safety rules set by FDA concerning drugs manufacturing. The company sold drugs that had proven to cause health complications to the users without considering their safety. 

Direct to Consumer Marketing

Direct marketing of drugs to the consumers has many challenges that pose a threat to the life of the users. It is not ethical for pharmaceutical companies to sell drugs directly to the customers without considering the prescription. One of the major reasons that make DTC marketing not appropriate is the fact that the customers might begin taking additional drugs rather than the ones prescribed by the doctors. For instance, some drugs are associated with making one have hallucinations if not taken in the right content. It would make it hard for the pharmacists to know when they are causing harm to the customer and when they are not. Moreover, the customers might complicate their health conditions because they may take more drugs that there would be required if examined by the doctor. The uncertainty is one of the key disadvantages of directing marketing of the drugs (Chiu, 2005). 

Besides, consumers might find themselves using drugs that have not been critically analyzed to ensure that they are safe for use. Direct marketing encourages the use of the drugs by a majority of the customers without any form of control; hence, the harm of the effects of the drugs might be severe. For instance, the sale of AD23 directly to the customers has led to increased number of deaths since there is no control on the people that are supposed to take the drugs. Before a drug is sold to the customers, it should undergo a critical analysis for a minimum of two years.

Regulating Compounding Pharmacies

The compounding pharmacies are regulated by the Food and Drug Administration as the umbrella body. There are specific regulators within the FDA that have the responsibility of making rules and regulations that govern compounding pharmacies which include Pharmacy Compounding Advisory Committee and the state board of pharmacy. These bodies ensure that the actions taken by the pharmaceutical companies are in line with the set laws and regulations. 

In the case of PharmaCARE, the regulatory bodies ought to have taken disciplinary and legal action for the violation of the laws and regulations set. PharmaCARE acted contrary to the expectation of the regulatory bodies; hence, it ought to have paid heavily for the actions. One of the ways in which FDA would have responded to the issue is by closing down the company until a full audit of other products other than AD23 is done. Moreover, the regulating bodies ought to compel the company to compensate all the customers that have been affected by the use of the drug as well as ensure the masterminds of the plan face the full wrath of the law. The regulatory body should also force the closure of CompCARE, the subsidiary company of PharmaCARE. 

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PharmaCARE could face potential legal exposure due to its practices. The company’s main intent was to make huge profits at the expense of the lives of the people. Even after the company realized that the drug was causing heart attacks and deaths to the consumers, it continued selling the same drugs directly to the consumers. Furthermore, PharmaCARE opened a new company, CompCARE, which was responsible for the sales of the drugs so that in case there were any legal implications, PharmaCARE would not be affected. Therefore, PharmaCARE engaged in the business intentionally, and it was aware that it was doing contrary to the laws and regulations.  

PharmaCARE Use of the Law to Protect Intellectual Property

PharmaCARE was able to use the U.S law in a very effective way during the sale of the AD23. The company created a subsidiary company that could be used in the manufacturing of the drug as well as its distribution. It is a method that is allowed by the law, and it also would ensure the company would not be affected by any repercussions regarding the drug. It was a way of protecting the intellectual property since CompCARE was the company known for the manufacturing of AD23.  

John does not have any claim as the inventor of the drug. He was part of a team that was employed by the company to do a research of the drug before it is released in the market. During the time of the research, he was an employee of PharmaCARE; hence, all rights to the product remain with the company. All the resources he used during the research belonged to the company which means that the rights also are supposed to be with the company (De George, 2005). 

Ways to Compensate John

PharmaCARE is supposed to compensate John for using his intellectual property as some way of appreciation for the profits he has brought to the company. One of the ways that the company can use in compensation is by giving him a large amount of money from the profits that have been made. It would be a way of ensuring that he benefits from the large profits the company has already leaped from the sale of the drug. Giving him a substantial amount of money would also be a way of motivating him to do more research for the company. Secondly, the company can decide to give John a certain percentage of the profits that would be gained from the sales of the drug. For instance, the company can decide John owns 10% of the entire product; hence, getting that amount every time the company makes profits from the product. It is one of the best ways of compensation since it would make John feel like part of the company as well as a key facilitator in the development of the company’s financial position. Thirdly, the company can treat John as an affected party of those who used the drug. Since his wife died as a result of using the drug, it would be crucial for the company to compensate him heavily more than the other parties. It would be a way of showing that as an inventor of the product; the company recognizes the loss he went through; hence, compensating him effectively. 

Current Example of Intellectual Property Theft

Ford Motor Co. is a company that has recently been accused of intellectual property theft. In 2015, Versata, a software company, took Ford to court seeking an injunction for the use of software that had been developed by the company. Versata had provided the software to Ford as part of a product-development process, but later Ford terminated the contract stating that it had developed an in-house product. However, according to Versata, the software that Ford has developed is a replica of the one they had been offered by the company since 1998. The claim is that the company stole the idea of Versata and turned it into its own; hence, ending the contract they have been signing annually.

Potential Issue Surrounding the Death of John’s Wife and Other Litigants

The potential issue that may arise after the death of John’s wife and those of other litigants is that the company could face a lawsuit for the death of the customers. First and foremost, the company knew that there was a potential risk with the use of the drug by the consumers. Despite taking the necessary measures and ensure that the drug is not sold directly to the customers, the company continued to sell the product neglecting the fact that it would lead to deaths of the users. The company sold the product to the customers knowing the potential harm it would cause to them. Secondly, the company could face the charges of manslaughter since if the victims could not have used the drugs, they would still be alive. It is critical to note that the company did not follow the safety regulations that have been established by the relevant bodies. Therefore, the actions of the company could be explained as total negligence of the safety of the products sold to the customers. Moreover, even after realizing that the drugs were responsible for the deaths of many people, the company continued to supply them to the people. 

Claims by John as a Whistle-blower and the Protection he should be given

John is a whistle-blower in the case of PharmaCARE and the sale of AD23. He notified the public on the ills that were going on in the company and the manufacturing of the drugs that led to the deaths of many people. Since he was an employee of the company, he is well-conversant with the happenings in the company especially those that are related to the manufacturing of drugs. Moreover, John took part in the research of the drug and knows the side effects it had on users. He can confidently claim that he whistle blew the happenings in the company; hence being credited for it. 

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John is supposed to receive protection for providing the information to the relevant institutions. He is supposed to be protected from the discrimination by other companies in the same industry in his quest to look for employment. Moreover, he would also seek protection against any form of revenge from the company such as refusal to be paid his benefits. The law is also supposed to protect him from any form of legal action taken against the company for engaging in such a deadly business. Despite being part of the team that developed the drug, John may not face any charges.


PharmaCARE sales of the AD23 drug have caused huge fatalities, and that has affected the brand of the company. Despite the fact that it had developed a subsidiary company to manufacture and distribute the drug, it remains a huge blow to the mother company. The actions of the company were not ethical at all since the main focus was on the making of profits and not the lives of the people. The company did not adhere to the safety regulations that have been established to govern the pharmaceuticals industry. There is a high possibility that the litigants can raise issues concerning the harmful effects of the drug. 

Did you like this sample?
  1. Chiu, H. (2005). Selling drugs: marketing strategies in the pharmaceutical industry and their effect on healthcare and research. Explorations.
  2. De George, R. T. (2005). Intellectual property and pharmaceutical drugs: An ethical analysis. Business Ethics Quarterly, 15(04), 549-575.
  3. Noordin, M. I. (2012). Ethics in Pharmaceutical Issues. INTECH Open Access Publisher.
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