Legal and Ethical Considerations in Marketing, SWOT Analysis Example

Pharma CARE

When it comes to ethical issues in relating them with marketing, advertising, as well as intellectual property, most of the elements are dependent on social codes of conduct and everyday morality. There are ongoing discussions regarding such ethical issues surrounding topics such as stem cell technology, abortion, and consumer loyalty. Because such topics continue to impose serious arguments, this shows that ethical issues are still of significant concern which are constantly needed to be addressed. Most ethical issues in business related fields surround basic principles of morality. In the Pharma CARE case study, ethical issues appear to be arising from the advertising of the AD23 product, personal selling of the AD23, failure to disclose important information about the drug, and even stock price manipulation.

When Pharma CARE sold their subsidiary, Comp CARE, to Well Co. it appears that the sale of the subsidiary was fixed to release Pharma CARE of all liabilities regarding the AD23 drug. This drug was linked to over 200 cardiac related fatalities and Pharma CARE knowing the risks yet failing to disclose them is a serious violation of ethical issues. The specifics of the ethical issue impair and even take advantage of trust among consumers and patients.

Direct to consumer (DTC) marketing has long been the attraction for various political, economic, and social debates throughout the world. This is especially true when firms within the pharmaceutical industry make use of it. The debates regarding both the strengths and weaknesses of this marketing strategy seem to have generated an equal amount of claims. DTC marketing strategies allow for pharmaceutical firms to directly advertise and market their products to the public. By directly marketing their prescription meds to the patients, pharmaceutical firms are in a better effective position to persuade the buying decisions of their patients in their favor. (Ventola, 2011)

This scenario of the Pharma CARE case, DTC marketing may be either beneficial or harmful to both the patients and/or the company. Considering the undisclosed information about the harmful effects of the AD23 drug, as well as the 200 plus cardiac deaths related to it, DTC marketing should not be used by pharmaceutical companies. Not only does the case study present that compounding pharmacies are prohibited from selling their drugs in bulk for general use, but a conflict of interest exists between the firm and the patients because the firms have an interest in profit. This makes the patients vulnerable to purchasing a drug with harmful effects which they may not be fully aware of. (Ventola, 2011)

Differentiation between the local and corporate pharmaceutical companies is not hard to distinguish because of the corresponding volumes of both productions as well as consumer base. There is however, a third classification of pharmaceuticals which is often referred to as the compounding pharmacy. This classification of pharmaceuticals focuses on the distribution of either uncommon or specific drugs. For example, a compounding pharmacy scenario may require the production of a drug’s milligrams that are not usually produced. This unusual production aids in assisting individual prescriptions that are issued by a licensed pharmaceutical practitioner. Compounding pharmacy is required to be analyzed as well as licensed in order to maintain the required standards of drug production. This is regulated by the corresponding state board. The popular state board known as the Food and Drug Administration (FDA) regulates compound pharmacy by inspecting the content, preparation, and labeling of all drugs distributed including the drugs which are compounded. (Administration, 2015)

According to the case study, Pharma CARE intentionally avoided approval from the FDA for their AD23 drug and distributed it to the public without their consent. This was executed by establishing their subsidiary, Comp CARE, and having them distribute the AD23 drug using DTC marketing. Of course this lead to fatalities where Pharma CARE tried to release themselves from the liabilities by selling the subsidiary to Well Co. Considering these actions, Pharma CARE should face legal action for going around the FDA regulations and failing to disclose information to their patients about the harmful effects of the AD23 drug. (Administration, 2015)

According to the case study, John was assisted by his team of researchers at Pharma CARE in formulating the AD23 drug. Because of this, John has no claim as being the true “inventor” of the drug. The best claim he has is on his intellectual property used in the development of the AD23 drug. Pharma CARE has already compensated John for his contribution to the development of the drug in the form of financial incentives and bonuses which he apparently accepted. Two other ways Pharma CARE might compensate John are by crediting him for his contribution and giving him part ownership of the AD23 drug. (School, 2015)

In a recent case involving intellectual property theft, a Texas software company known as Versata, is asking the US Texas District Court Judge to file an injunction against Ford Motors for allegedly stealing their software code after the termination of their contract. Versata is asking that Ford Motors discontinue to use their software, but Ford Motors is insisting that their new software program was derived from Versata’s, but not copied and therefore does not constitute as intellectual property theft. (Bunkley, 2015)

This has put legal and ethical pressure on the Ford Motors brand as the have just until June 29, 2015 to respond to the District Court Judge regarding the lawsuit. Ford Motor declined to allow for Versata to examine their new software program to test the code against their own, which makes Ford Motors look guilty of intellectual property theft, making it not only a legal but an ethical business issue as well.

It is very possible that John was unaware of the harmful effects of the AD23 drug; otherwise he would not have allowed his own wife to consume it. Perhaps the researchers at Pharma CARE withheld this information regarding the drug from John in an attempt to prevent him from whistle blowing. Pharma CARE continued to distribute the AD23 drug despite being fully aware of the harmful effects it was having on patients. Possible litigants include the FDA, surviving patients of the AD23 drug, family members of deceased patients, and Well Co.

In order to make the argument that he is a whistleblower, John can argue that he was unaware of the harmful effects of the AD23 drug. Supporting evidence of this claim would be that his wife died as a result of the drug, a risk he would not have otherwise taken with the AD23 drug had he been aware of the harmful effects it was having on patients. John may be protected under the Whistle Blower Protection Act of 1989. Under Public Law 101-12, this US federal law protects John from any threats Pharma CARE may make against him for disclosing information about the harmful effects of the AD23 drug to the public. (Jones, 2014)

References

Administration, F. a. (2015). Compounding and the FDA: Questions and Answers. Retrieved from U.S. Food and Drug Administration: http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ucm339764.htm

Bunkley, N. (2015, June 4). Ford accused by software maker of intellectual property theft. Retrieved from Automotive News: http://www.autonews.com/article/20150604/OEM06/150609919/ford-accused-by-software-maker-of-intellectual-property-theft

Jones, A. (2014). Whistleblower Protection. Retrieved from Office of Inspector General: https://www.hudoig.gov/fraud-prevention/whistleblower-protection

School, C. U. (2015). Intellectual Property . Retrieved from Legal Information Institute : https://www.law.cornell.edu/wex/intellectual_property

Ventola, C. L. (2011, October). Direct-to-Consumer Pharmaceutical Advertising. Retrieved from US National Library of Medicine : http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3278148/