Legal and Ethical Considerations in Marketing, Product Safety, and Intellectual Property
Daniel A. Sievers
Professor: Joe McGirt
Strayer University LEG 500
12/01/2014

Research three to five issues relating to marketing and advertising, intellectual property, and regulation of product safety and examine whether PharmaCARE violated any of the issues in question.
There are many issue’s relating to advertising, intellectual property and regulation in today's workplaces. All phases of marketing and advertising mix are subject to laws and limitations. Every marketing supervisor will be faced with how they must discuss ethics and law when marketing their products. Any marketing manager understands that there are cut and dry solutions to ethical issues that will occur during the normal course of business (Pharmaceuticals, n.d.). The Bureau of Consumer Protection’s places everything in perspective that all communication in the United States must be truthful. The Federal Trade Commission Act (FTC) looks for dishonesty and deception towards customers that try to change their decision to purchase medications. FTC monitors truth-in-advertising laws especially with kids, but there have been a lot of immoral practices in advertisements over time. The most moral decision is not to promote to children but in this case to the parent. Children's ad urges children to get dependent on products that induce on social development (Media, 2004). Cigarette advertising is matched to marketing consumers for distinct programming while alcohol advertising is allowed on all television channels. It is important that organizations consider the right choice of their product before proceeding in advertising. Other advertisement ads with high demands that are permissible for promoting fast food products that doctors and everyone else can see is high risk for future obesity with children (Media, 2004). Pharmaceutical ads encounter numerous side effects with medications for class-action lawsuits for wrongful injury. Advertising can be misleading as well as additional ethical issues leading to legal entanglements for unintentional advertising, emotional appeals, taking advantage of less educated individuals, spreading propaganda for political campaigns (Media, 2004). Consumer is eager to buy into honest, have integrity, and don’t use manipulative tactics to gain their business. Businesses have the moral duties to customers to making sure product is safe, and they are not being deceived what they are buying. Utilitarians will argue that a company should help people have better lives, even though it is not their obligation. The responsibility is for companies to inform customers truthfully about their products. Customers go in the impression that the company that is selling to the customer is in their best interest. The moral responsibility of companies to ensure product safety they pay for and safe for ordinary use. Every year millions of people are injured from defects in products. Companies and manufacturers are legally liable under “strict liability” even though they make have taken precautions. Utilitarian's supported this strict liability because it is an effective source of motivation to enforce companies. Utilitarian’s take every precaution serious, because it can cost them in the long run a lot of money from legal battles (Pharmaceuticals, n.d.).

Argue for or against Direct-to-Consumer marketing by drug companies. Provide support for your response.
Direct to consumer (DTC) advertisements are a problem because they show actors in a cheerful commercial then the announcer rattles off a bunch of side effects who lists them off within a passive voice. The side effects lists are required for each product a company advertises by the Food and Drug Administration. Presented by pharmaceutical companies, these ads directed at a general adult audience. The ads are also broadcasted on TV and radio, and published in magazines and newspapers. The most irritating portion of television advertising is that it shows celebrity actors portraying happy and satisfied patients. Product claim advertisements are required by the Food and Drug Administration to provide side effects and risks by pharmaceutical companies (Health, 2010). Although DTC has created a generation of consumers who are more informed of the drugs available to them, it has also created customers who try to self-diagnose their medical conditions. Drug companies use advertisements to sell their products directly to desperate consumers by persuading people thinking that they expensive brand-name drugs sold by these companies. I believe DTC marketing is very biased, and this is based on the fact that the materials do not show the whole story about the medication being advertised. They instead use the emotions of the consumer to purchase the products. Physicians attempt to promote healthy behaviors and screen for early stages of illnesses, but DTC ads undermine those efforts PharmaCARE, and most drug companies are only concerned about profits. DTC can help and encourage people by discussing ways with their professional healthcare can reduce medical issues. DTC can keep patients to get their prescriptions refilled and help them adhere to their medications regimens (Health, 2010). With all this evidence, I’m against direct to consumer advertisements because the companies are misleading consumers.

Determine the parties responsible for regulating compounding pharmacies under the current regulatory scheme, the actions that either these parties or the FDA should have taken in this scenario, and whether PharmaCARE could face legal exposure surrounding its practices. Support your response.
Compounding pharmacies make drugs issues by a prescribed doctor for a specific patient through commercial available drugs. Small children prefer liquid form of medication doses and adults enjoy pill forms. An individual may be allergic to a brand that has an ingredient in it that causes counter reactions so they will choice a commercial drug. The FDA conventionally has oversight of drug manufacturers and the state regulate pharmacies. There are three specific government agencies that control compounding pharmacies. The state boards of pharmacy make sure that pharmacies are following the guidelines for pharmacy practice and the FDA ensures the integrity of the drugs. The pharmaceutical have combined safe for human use. The Drug Enforcement Administration ensures that the compounding pharmacies are properly handled (Berger, 1993). PharmaCARE violated FDA laws and regulations by hiring CompCARE to operate acting as a compounding pharmacy to sell its new formulation to consumers. When a product reaches the consumers through marketing tactics, the company such as PharmaCARE and CompCARE should make it available to consumers to review the pros and cons of the performance. CompCARE started promoting AD23 directly to consumers without written knowledge of the effects to other customers using that product that resulted in deaths. CompCARE was marketing to healthcare providers such as, hospitals, clinics, and physicians’ offices knowingly they can sell drugs in bulk for the general use. CompCARE did a low-cost renovation by setting up in the parent’s headquarters to conserve money and time. Companies are not prohibited to avoid safety measures to save them money because safety standards are a requirement other than a profit. When products such as AD23 have showed, severe injuries are in the highest need for safety standards. Consumers were reporting that using AD23 suffered from heart attacks at alarming rate and the company ignored these complaints by filling even larger orders. The executives and managers were instead receiving large amounts of bonuses, including John one of the pharmacists that wife died from a heart attack using AD23. The Federal Trade Commission governs false advertising and fraudulent commercial practices, but it is known to not protect consumers in a higher level (Halbert & Ingulli, 2012). Consumers can be held for legalities as a result of false advertising because plenty of consumers were deceived and misleading them. The FDA requires that companies show that their products that they are considering to market are safe. The Consumer Product Safety Commission defends consumers from extreme risk of injury and death in which PharmaCARE violated these regulations by continues to market a product that caused heart attacks and death.

Analyze the manner in which PharmaCARE used U.S. law to protect its own intellectual property and if John has any claim to being the true “inventor” of AD23. Suggest at least three ways the company could compensate John for the use of his intellectual property.
United States law has certain rights and protection to owners of intellectual property. Any property that was created the fruits of mental labor is called intellectual property. John can be compensated for AD23 because he was an actual inventor and not just contributing to the invention of AD23. John should be awarded a fair share of benefits from AD23 that PharmaCARE has derived. John should be acknowledged for the patent rights for AD23 as well as the glory and fame. Based on the federal patent, trademark and copyright laws and state trade secret laws will determine the rights and protection under the umbrella of intellectual property. These laws vary from state to state. Copyright protects the rights of creators and traditional copyrights of literary and artistic (Halbert & Ingulli, 2012). Patents protect inventions of tangible things that can’t be naturally occurring or non-obvious. The federal government patent legally protects the owner for 20 years. John could compensate by formulating AD23 with different ingredients by maximizing the effects and has the right to decide who or whether the AD23 can be used by PharmaCARE. John created a natural formulation of AD23 that slowed down the progression of Alzheimer’s disease. John can sue PharmaCARE for infringement for the AD23 that violated the rights of the intellectual property. John can receive compensation for his work in creating a new AD23 that CompCARE is exploiting. He should be given a percentage of the shares from PharmaCARE stocks if and when his shows that he is the original inventor of the AD23. John will gain moral rights to protect him from unfair attacks, distortion of his work that will damage his reputation through legal ramifications of injuries that CompCARE will face from injuries (Commission, 2014). John must register in order for him to gain all the benefits from AD23 for legal protection serving the function and purpose of new AD23. John was also getting bonuses for the work that he put forth with the other executives and directors to it should be determined what other financial gains he should receive from the AD23.
Summarize at least one current example of intellectual property theft, and examine the effect on that company’s brand.
CEO, Seth Ravin was charged with theft of Oracle’s intellectual property. Rimini Street violated copyrights on Oracle’s PeopleSoft enterprise resource planning software by installing unauthorized copies of PeopleSoft systems so it could create software updates for customers violating Oracle copyrights (Marketwired, 2014). Rimini Street downloaded over 25 copies of Oracle’s database software and produced more than 200 copies that were all unlicensed. There were several causes of action brought by PharmaCARE such as negligence, misrepresentation, breach of warranty and strict products liability. Drug manufacturers such as PharmaCARE have the responsibility of doing thorough testing on their products and provide informative information to physicians and pharmacists that can give accurate prescribed medications to their patients. PharmaCare neglected to test AD23 correctly by taking a cheaper way by creating a parenting company, CompCARE to conserve money and time and doing a quick, low-cost renovation. PharmaCare had a duty to inform the public of the proper warnings of dangerous side effects, failure to disclose the poor results of AD23. CompCARE began advertising AD23 directly to customers and selling directly to hospitals, clinics, and physician offices, knowingly that compounding pharmacies are not permitted to sell drugs in bulk for general use. PharmaCARE misrepresented to doctors that AD23 was affecting people with heart attacks at alarming rate. PharmaCARE continues to roll the dice by continue to market the drug that was not approved by the FDA. PharmaCARE breached the warranty that could be litigated due to John wife dying after using AD23 by suffering from a heart attack. John can file false claims due to PharmaCARE because his wife did not recover from a heart attack and died, PharmaCARE failed to warn cause of action to side effects that resulted in death. SAP bought TomorrowNow in 2005 and had pleaded guilty to liabilities by TomorrowNow employees that battle out in court for over five years (Marketwired, 2014). The court granted Oracle $426 million judgment in August 2012. The court gave both parties 60 days to bring forth evidence of who had original copyrights. Rimini Street stated that Oracle knowingly had knowledge that they were using their customers and duplicating copies. Oracle shipped backups with complied consents leading that there was no cause for copyright infringement and showed no supported evidence by the judge (Marketwired, 2014). The Federal Trade Commission protects consumers by preventing fraud, deceptions and unfair business marketing.
Analyze the potential issue surrounding the death of John’s wife and other potential litigants against PharmaCARE as a result of AD23.
PharmaCARE established a wholly owned subsidiary, CompCARE, which benefited from the reputation of PharmaCARE by reputation, databases, networks, sales, and marketing over 6-month time launching the product AD23. It also had high demand with patients from Medicare, Medicaid, and Veterans Affairs, which they knew through data records the AD23, caused heart attacks and the death of John’s wife. There could be litigation in form of class action lawsuits filed by consumers and competitors against PharmaCARE.
Specify both the major arguments that John can make to claim that he is a whistleblower and the type of protections that he should be afforded. Justify your response.
John came to PharmaCARE informing them through a memo describing the potential problems with AD23. PharmaCARE continued to roll the dice by disregarding the memo and continue marketing AD23. PharmaCARE violated the FDA regulations by not submitting information to be cleared for marketing by FDA, but consumer’s rights were violated by not given proper knowledge of AD23 by not being approved for marketing. PharmaCARE was required to give sufficiently safe products whether were regulated or not. PharmaCARE used deceptive advertising through CompCARE under the impression that AD23 was safe and effective, concealing facts affecting physical injury. PharmaCARE is a pharmaceutical company that has been marketing the drug, AD23 that was not approved by FDA. John sent a memo outlining the multitude of problems that was reviewed by senior partners, and they continue to launch AD23 knowingly the injuries it caused to consumers. John found that PharmaCARE was defrauding the government, did the right thing by whistleblowing and should be rewarded for doing it. The Federal and State laws protect John for whistleblowing by coming forward and can collect a generous portion of money due to the government. The law also protects John from any retaliation from PharmaCARE by making adverse actions against him, such as firing, disciplinary, and intimidation (Halbert & Ingulli, 2012). Whistleblower Protection protects employees who complain to their employer, OSHA, or other government agencies in relations to unsafe work practices.
References
Argandona A (1998). The Stakeholder Theory and the Common Good; Journal of Business Ethics, 17:1093-1102
Berger, B.A. (1993). Building an effective therapeutic alliance. Competence, trustworthiness, and caring. American Journal of Hospital Pharmacy, 50, 2399–2403
Commission, F. T. (2014, September ). ww.ftc.gov. Retrieved September 3, 2014 DeNoon, D. (2012). What are Compound Pharmicies. WebMD Health News. www.webmd.com. Retrieved September 1, 2014
Halbert, T., & Ingulli, E. (2012). Law and ethics in the business environment. Boston, MA: Cengage Learning.
Health, U. F. (2010, May 10). Keeping Watch Over Direct-to-Consuemr Ads. Retrieved August 28, 2014, from www.fda.gov. Labor, U. D. (2014). Your Right as Whistleblower. Retrieved September 3, 2014, from www.osha.gov.
Marketwired. (2014, August 14). Court Finds Rimini Street Engaged in "Massive Theft" of Oracle's Intellectual Property, and Once Again Rules That Rimini Street Infringed Oracle's Copyrights. Marketwire (English).
Marketing and Direct-to-Consumer Advertising (DTCA) of Pharmaceuticals. (n.d.). RetrievedNovember 23, 2014, from http://www.ncsl.org/research/health/marketing-and- advertising-of-pharmaceuticals.aspx
Media, D. I. (2004). http://smallbusiness.chron.com. Retrieved August 28, 2014, from List of Ethical & Legal Issues When Advertising. Services, U. D. (2013, August 19). U.S. Food and Drug Admisnistration, Protecting and Promoting Your Health. Retrieved August 27, 2014, from htttp://www.fda.gov.