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

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

PharmaCARE: Legal and Ethical Considerations

This paper will assess and analyse ethical as well as legal limits on marketing and advertising, touching on both the organization and its stakeholder. In addition, the paper will evaluate and explore the requisite regulations and laws concerning liability and safety of products emanating from the activities of PharmaCARE (Halbert & Ingulli, 2012). Further, there will be an extrapolation of the laws that pertain to intellectual property rights .These laws will be assessed to determine how they are used as tools for balancing the competing interests in the commercial world as evidenced in the case of PharmaCARE. As a result, the investigation undertaken in this study will be critical in understanding the ethical issues affecting advertising and marketing of products, product safety regulation, and intellectual property rights. Additionally, argument against Direct-to-Consumer (DTC) by drug companies will be raised, while comparing and explaining any possible suggestions and regulations for improving operations affecting compounding pharmacies using the case scenario of PharmaCARE/CompCARE as discussed in the previous assignment.

Ethical issues in PharmaCARE

Ethical marketing efforts and decisions should meet the expectations of the various players in the marketing effort (Halbert & Ingulli, 2012). Suppliers, business partners, and customers must be satisfied by the conduct of any company in undertaking its responsibilities. Some actions that are executed by companies can be considered unethical. For instance, selective advertising, deceptive marketing, and price wars are some of the activities that can have a negative effect on the firm’s relationship with various stakeholders. PharmaCARE has several ethical issues. These fall in various categories including marketing, advertising, safety, and intellectual property right. The challenge of intellectual property rights is rife in the marketing world (Jain & Bird, 2008). The problem of property rights touches on passing of another person’s idea as one’s work without the permission of the owner. Therefore, it is a serious ethical concern in business. For example, ‘fair use’ policy on copyrighted materials in the field of education has led to debates on the issue for the last ten years (Jain & Bird, 2008). Indeed, the dilemma of ethics concerning the fair use cannot be resolved by making appeals to principles that are well known on property rights. In the case of PharmaCARE, it is clear that the company was unethical by not compensating the Colberians for sharing their medical cure with the company.

In addition, the company did not treat the workers in a fair manner. The workers are underpaid, which is against labour laws. PharmaCARE earns millions of money, but only treats its executives well, but not Colberians who are more resourceful to the company. If the company paid the traditional healers for sharing their intellectual property, this would in turn help them improve their living conditions. However, the company takes advantage of their ignorance and lack of education. Another ethically wrong undertaking by the company can be seen from its treatment of employees such as Allen, Tom, and Ayesha as was discussed in assignment 2. For instance, Ayesha feels she is being mistreated because of her religious inclinations (Halbert & Ingulli, 2012). It is unfair for the company to discriminate against one of their employees because of her religious orientation. Therefore, labour laws are not followed, and there was no proper documentation of their issues. For instance, if Ayesha could not be promoted because of lack of certain competencies, this would help in dealing with any labour dispute that might arise in the future.

In terms of regulation of product safety, PharmaCARE operated in error by going round regulation requirements. The company used it reputation of a caring and ethical company to cheat people and government authorities. PharmaCARE should have sought approval from FDA for its reformulated diabetes drug before distributing it in mass quantities. However, the company created a subsidiary to act as a compounding pharmacy to distribute the drug directly to consumers on a prescription basis. PharmaCARE went on to sell the drug in bulk to hospitals, clinics, and doctors, which is not permitted by pharmacies. The role of FDA is to ensure regulation of prescription drugs for the sake of the public. For almost 50 years, there are certain drugs that continue to be availed to the patients only through prescription. Nurses, doctors, as well as other professionals in the field of health have the right experience and training to determine whether a drug is indicated in a certain case. This is the reason, why prescription decisions are left to them rather than to the patients (U.S. Food and Drug Administration, 2013). Advertisements on prescription drugs put health professions under pressure to prescribe certain medications, and in most cases, the drugs are ineffective, dangerous and expensive, which affects the relationship between patients and health professionals and therapeutic process are in turn disrupted. It takes more time to explain to patients that they were misled by ads on certain drugs. The most vital factors contiguous to the product safety regulation are restrictions on the environment, quality, as well as safety of a product and marketing affecting children. Imports have been growing steadily and it is expected that the growth will continue in the same pace within the next one decade. Today import numbers are expected to expand by a big margin. The (U.S. Food and Drug Administration (2013) argued that America relies on other countries to produce drugs, foods, devices, and cosmetics. For instance, around 10-15% of the total amount of food that is consumed in the households in the U.S is imported from other countries. Almost two-thirds of vegetables and fruits as well as 80% of seafood are imported from other countries. About half of devices used in the medical field are imported from different countries, and around 80% of pharmaceutical ingredients that are active in medications sold in the country are manufactured in other parts of the world. FDA is actively in the centre of this trend given that almost 25% of funds spend by all Americans are on goods that the agency does regulate (U.S. Food and Drug Administration, 2013). FDA regulates 10% of imports in the country, as they arrive from 300,000 facilities located in 150 various countries in the globe (U.S. Food and Drug Administration, 2013). However, PharmaCARE took the compounding route to avoid coming under the scrutiny of FDA.

Direct-to-Consumer Marketing

Prohibition of DTC marketing by companies for prescription drugs is right. Direct-to-Consumer marketing is advertising promotion that tends to target the patient instead of reaching to the healthcare professionals. The promotions of this nature are usually run through the social media, print media, TV, radio, and other types of media that tends to create awareness to the patients and regulations are controlled by the FDA. PCCA argues that advertising related to pharmaceutical products does not lead to promotion of health of the public. It tends to raise the drug costs and number of prescriptions that are unnecessary, which ends up being costly to the taxpayer and can be deadly or cause harm to patients.

Advertisement on prescription drugs is not an educational endeavour. It is misleading as its elements are emotive and do not reveal critical information to the customers. Pharmaceutical firms have unalterable and inherent financial conflict of interest. This conflict of interest leads them to overstate the positive qualities of a drug, which downplaying the drugs side effects. Therefore, Direct-to-Customer marketing of prescription drugs should not be in existence unless a label that is fully approved by FDA accompanies the product (U.S. Food and Drug Administration, 2013). The same adverts should not be allowed to make use of imagery displays that are basically emotive rather than educational. Adverts on drugs on radio and TV should be made illegal, as they cannot be able to meet this crucial standard on truthfulness.

Regulation of Compounding Pharmacies

As PharmaCARE and its subsidiary continued to enjoy super profits, reports started to filter that patients who had received AD23 showed signs of suffering from heart attacks at a very high rate. The U.S. Food and Drug Administration (2013) argue that state pharmacies boards, according to the current framework of regulation, currently regulate all pharmacies. Compounding pharmacies are also included in this arrangement. Nonetheless, drugs that are produced through compounding pharmacies do not undergo premarket reviews from FDA or other regulatory agencies, unless it is a requirement of a state law. Therefore, although FDA has clear mandate in terms of regulation of drug manufacturing under the FDCA, the body jurisdiction of compounding pharmacies and compounding drugs is not explicit (U.S. Food and Drug Administration, 2013).

PharmaCARE did not take cognizance of the information that was shared relating to the rising cases of heart attacks. Indeed, the company continued to process large drug orders as well as paying huge bonuses to its managers and executives. This case shows that there is an urgent need for a better regulatory program to prevent similar cases from occurring in the future. All purchases of pharmaceutical drugs such as hospital pharmacies would be better off if regulation is put in place (U.S. Food and Drug Administration, 2013). Regrettably, there is little that FDA could have done under the current regulatory framework. There is a need to give the FDA more powers when it comes to control of compounding pharmacies. This will seal the existing loopholes currently being exploited by companies such as PharmaCARE.

PharmaCARE Actions in accordance with;

Utilitarianism

According to the utilitarianism theory, the use of intellectual property of Colberian by PharmaCARE was not in line with its tenet. Utilitarianism is widely-held theory of ethics (Mizzoni, 2009). In a context of a firm, utilitarianism theory is of the view that a decision affecting a business processes can be said to be proper when it results in the greater good of all. ‘Good’ in this case is attributed as the net benefits that are available to the parties that are directly impacted by the decision (Mizzoni, 2009). Therefore, majority of utilitarian are of the view that moral choices can be examined by making calculations on the net benefits that are available for individual courses of actions.

As argued by Mizzoni (2009), it would be proper for pharmaceutical company to distribute drugs that are officially approved with negative effects as long as the number of individuals that benefit from its use are more than those who experience side effects.

Deontology

The deontology theory, also known as ‘duty-based ethics’ tends to be action-based and does not pay attention to the consequences of the actions in question. This theory means that an individual will simply follows ethical principles because the law requires one to do so or the employers’ policy demands compliance (Mizzoni, 2009). Using this argument, PharmaCARE ethically would be in agreement with this theory. It can be argued that the stakeholders were striving for success in spite of the side effects that their actions had on the Colberian workers. Therefore, the deontology theory is basically concerned with an individual performing ‘his duty’ regardless of whether his or her actions have a negative effect on others (Mizzoni, 2009).

Virtue Ethics

On the other hand, virtue ethics are qualities of a human that show fairness and honesty in the pursuit of economic excellence. This theory is also applicable in the case of PharmaCARE’s activities in Colberia. Mizzoni (2009) argues that virtue ethics is generally concerned with pursuit of a particular form of excellence that is morally inclusive. Aristotle referred to this theory as ‘eudemonia’, which stands for human flourishing or happiness. In relation to today’s society, the theory can be said to be exhibiting four primary attributes. The main characteristic of the approach is its emphasis on certain virtues that are generally accepted in society (Mizzoni, 2009). A person can hone and perfect the virtues that one can be truly ethical. Secondly, the theory puts emphasis on the need to have a vibrant society that can nurture such virtues.

The third attribute focuses on the ability of an individual to make judgements that are morally right rather than relying on rules and guidelines to make such decisions. Finally, the theory argues that in order for virtues to be emulated in society, there must be good role models for morality to be maintained from one generation to another.

Ethics of Care

This theory holds that both parties should benefits from a given action (Mizzoni, 2009). Feminists were instrumental in the development of ethics of care. The theory is not in line with PharmaCARE usage of intellectual property of the Colberian people. Virginia Held, a renowned feminist philosopher is of the view that the ethics of care will be a good replacement of traditional theories of ethics such as utilitarianism, deontology, and virtue ethics. She shows the theory as the one that stresses on the need for moral force of sense of responsibility for purposes of responding to the needs of people who depend on it. Care is considered as both practice and value. It tends to value moral emotions for instance, empathy, and sympathy and argues that anger should be felt when individuals feel they have been treated in an inhumane way. Ethics of care would see the action of the company as unethical because the Colberians did not benefit from PharmaCARE (Mizzoni, 2009).

My Moral/Ethical Compass

My moral as well as ethical point of view in relation to this critical issue is that many times leaders of businesses behave in ways that are inhumane due to lack of belief that people are hurt. In addition, they ignore the suffering of people in pursuit of corporate profits. In both cases, their actions end up being unethical.

How PharmaCARE uses U.S. Law and Co-opts Intellectual Rights in Colberia

The company uses deceptive methods to earn record profits. It tries to show how good it is in protecting the environment, while underpaying and stealing intellectual property rights from the poor Colberians (Jain & Bird, 2008). Given that their operations of developing products did not fully meet the conditions set by FDA, the company tried to cover their activities by incorporating CompCARE as a fully independent subsidiary to operate as a compounding pharmacy with the aim of selling drugs on basis of prescription. Therefore, the company uses a positive appearance of following U.S laws in order to conceal its actions.

How the Company can Compensate Colberians

Because of its actions, the company can compensate the people as well as the nation of Colberia by providing programs that meet the expectations of the various stakeholders. Secondly, a sustainability program should be in place to aid in the restoration of the resources being used. Finally, the company can compensate Colberians people by funding projects aimed at enhancing their overall well-being. For instance, the company should provide running water and electricity for the people.

Star Scientific is a pharmaceutical company whose actions are similar to those of PharmaCARE. A suit filed against the company alleges that the company was engaged in deceptive activities (Cuthbertson, 2013). These were unravelled, thus tarnishing the name of the company. Eventually, the company’s stock plummeted, just like that of CompCARE.

Success of Law Suits against the Company

Shareholders will be held to account since workers informed them of the situation before their conditions became worse before filling the suit. If Colberians bring a suit against the company, they will lose because the healers freely provided the company with information.

Living up to its Brand

The company is not close to living to its brand. To the people, it was said it enhanced lives and provided several sponsorship initiatives. The company was seen as well run and ethical. However, its actions are contrary because of the deaths it caused and mistreatment of workers. Consumers and workers suffered. The Colberian government lost its property rights to the company. Therefore, the company is not close being an ethical brand as argued by the management.

Recommendations Going Forward

PharmaCARE should avoid its unethical approach going forward. The company should behave well by honouring the Colberian people and paying the employees better. Secondly, the company should give customer well being the priority it deserves. Customers expect value for their money. Finally, the company should develop a workforce that is passionate about their actions and work. The rush to make money should not be the motivating factor for workers, but the need to do what is right should be paramount.

References

Cuthbertson, D. I. (2013). Lieff Cabraser Announces Class Action Litigation Against Star Scientific, Inc, Retrieved from http://www.lieffcabraser.com/Media-Center/Lieff-Cabraser-Announces-Class-Action-Litigation-Against-Star-Scientific-Inc.shtml

Halbert, T., & Ingulli, E. (2012). Law and Ethics in the Business Environment (7th ed.). Mason, OH: Cengage.

Jain, S. C., & Bird, R. (2008). The Global Challenge of Intellectual Property Rights. Cheltenham, UK: Edward Elgar.

Mizzoni, J. (2009). Ethics: the basics. New York: John Wiley and Sons

U.S. Food and Drug Administration (2013). Compounding, Retrieved from http://www.fda.gov/drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/

 

 

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