LEG500, Law, Ethics, and Corporate Governance
Strayer University LEG500

13
Legal and Ethical Considerations in Marketing, Product Safety and Intellectual Property
PharmaCare, week10 Assignment

LEG500, Law, Ethics, and Corporate Governance
Strayer University LEG500

13
Legal and Ethical Considerations in Marketing, Product Safety and Intellectual Property
PharmaCare, week10 Assignment

Review of PharmaCARE/CompCARE
To first establish whom each entity is; PharmaCare is one of the world’s most successful pharmaceutical companies. A compassionate, decent well operated business that manufactured high-quality goods that saved millions of lives and increased the condition of life for millions of others. PharmaCare designed a top-selling diabetic medication that could have reduced the progression of Alzheimer’s disease; their pharmacist began reformulating the drug to increase the effect. CompCARE came into being in order to steer clear of FDA investigation; PharmaCARE created a wholly owned establishment, CompCARE, to function as a compounding pharmacy to sell the new creation to people on a prescription basis. CompCARE set up business in an upscale administrative center near its main corporate office, and to conserve money and time, did a quick, low cost makeover and appointed a man by the name of Allen Jones to run the operations’ clean room. * Research three to five ethical issues relating to marketing and advertising, intellectual property, and regulations of product safety.
Ethics and Corporate Responsibility in the Work Place and the World distinguishes the stakeholders of an organization and who are accountable of the organization. The consequence of the decisions reached by management are examined and answered. The expertise to make modifications to support a more ethical work environment, enhance operations and turn a revenue are clarified by discussing management’s stipulations to abide by guidelines governed by the Occupational Safety and Health Administration (OSHA), Federal Drug Administration (FDA), Environmental Protection Agency (EPA), Equal Employment Opportunity (EEOC), Comprehensive Environmental Response Compensation and Liability Act (CERCLA) and any other regulatory policies.
CompCARE employees were working extended long hours with increased production; an employee went to the supervisor Allen and reported that they discovered what appeared to be black mold around the air vents. Allen did report to the facility supervisor, who came and completed an assessment of the report, however no follow up was done and the mold remained. As time went on employees began displaying signs of coughing, sneezing and having headaches. As time continued to go on Donna and employee with a perfect attendance record became so ill with chronic bronchial problems the eventually had to stop working and file for worker’s compensation. Tom a concerned employee due to the quality of air in the lab threatened to go to Occupational Safety and Health Act (OSHA), this law was created in 1970 its general duty is to maintain a safe, and clean work environment. Per (Sarbanes-Oxley Act p. 64) the Department of Labor’s Occupational Safety and Health Administration (OSHA) issued a lengthy list of rules regarding complaints filed under Section 806 that clarify gray areas of SOX itself, timely complaints, temporary reinstatement if OSHA finds reasonable cause that a company has terminated an employee in violation of SOX, the employee must be immediately reinstated with the investigation continues. However, companies can request from OSHA “economic reinstatement” as an alternative (in which the company would pay the employee’s salary but not rehire him or her), if the company can show that reinstatement is inadvisable for some specific reason. And to include process for resolving disputes, complaints that cannot be settled are deiced first by an administrative law judge.
The drug AD23 in which was developed within the lab would fall under the intellectual property concept. AD23 was the creation of the lab staff that compounded various combinations of medicinal chemicals to formulate a medicine. Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce. IP is protected in law by, for example, patents, copyright and trademarks, which enable people to earn recognition or financial benefit from what they invent or create. By striking the right balance between the interests of innovators and the wider public interest, the IP system aims to foster an environment in which creativity and innovation can flourish. Should the AD23 been without flaw it would have been in the best interest of CompCARE to put a patent on it due to the competitive field of medicine. A patent is an exclusive right granted for an invention. In general speaking, a patent gives the patent owner the right to determine how - or whether - the invention can be used by others. In exchange for this right, the patent owner makes technical information about the invention publicly available in the published patent document.
PharmaCARE violated two principle aspects of business, first they sold the company avoiding the FDA. This case study does not directly say but, seems they were aware that the drug AD23 had some detrimental side effects and was not all that they advertised it to be. PharmaCARE developed CompCARE in order to pass off AD23 to make them some quick money. In the creation of a new medication it can take years to develop and once completed it must pass the standards of the Food and Drug Administration (FDA). In doing that PharmaCARE also violated the regulation of product safety. The Consumer Product Safety Commission (CPSC) by definition includes us all, it is an organization that was introduced in 1972 as an independent federal regulatory agency to protect consumers from unreasonable risk of injury, illness, or death from unsafe products, and they recall unsafe products. The product Safety Commission law sets specific safety standards. * Argue for or against Direct to Consumer (DTC) marketing by drug companies.
I will first start by stating that I personally am not in favor of Direct to Consumer DTC marketing. First explaining Direct to Consumer marketing strategy. Per Halbert/Ingulli, the difficulties that accompany this type of advertising practice are manifest. The marketing gimmick used by the drug manufacturer often provides the consumer with a diluted variation of the risks associated with the drug product. Even without such manipulation, commercials are approximately thirty to sixty seconds and are not conducive to fair balance. Given such constraints, pharmaceutical ads often contain warnings of a general nature, which do not give the consumer a sufficient understanding of the risks inherent in product use. Traditionally companies use to legally have to warn consumers directly of the dangers associated with their products. An exception developed, in the area of pharmaceutical drugs, manufacturers do not have to warn consumers as long as they adequately warn the doctors. Halbert/Ingulli, p.272
I find that unacceptable, due to the fact that doctors are extremely busy and due to the reduction in managed care time doctors tend to give a cliff note version of an explanation which leaves the patient uninformed due to the communication barrier. A lot of doctors tend to talk above the patient level of comprehension in which especially with the elderly who feel like they are bothering you if they ask too many questions, which will leave them without a full understanding of the side effects of their medication. * Determine who regulates compounding pharmacies under the current regulatory scheme, what the Food and Drug Administration (FDA) could /should have done in this scenario, and whether the FDA should be granted more power over compounding pharmacies.
State boards of pharmacy usually regulate compounding by pharmacies; however federal legislation also contributes to that role. Compounding can defined as preparation, mixing, assembling, packaging, and labeling of 1 or more drugs pursuant to a prescription dispensed by a licensed health professional that has been authorized to prescribe drugs. Ohio state law also allows compounding in anticipation of orders for drugs pursuant to prescriptions based on a regular basis observed dispensing patterns. This means that a pharmacist may compound medications even though the pharmacist does not yet have a written prescription in hand for those medications, considering that the pharmacist anticipates getting prescriptions in the future. This empowers the pharmacist to make batches of medications. This is important because compounding can require considerable amounts of time to complete and it may be problematic to make very small amounts of certain medications. A pharmacy cannot sell a compounded drug to another pharmacy or a wholesaler. Compounded drug formulations should be assigned beyond-use dates that are based on stability and sterility. State boards of pharmacy enforce guidelines that apply to pharmaceutical compounding. For example, in 2006, the Ohio State Board of Pharmacy took action against Home Medical Enhancement Services, Inc. The Board alleged that the company prepared medications and did not properly sterilize some compounded medications. The Board alleged that there was fungal contamination in some of the company's pulmonary products. ( J.L.Lindon) * Decide whether PharmaCARE’s use of Colberian intellectual property would be ethical in accordance with: * Utilitarianism * Deontology * Virtue ethics * Ethics of care * Your own moral/ethical compass
PharmaCare’s use of Colberian intellectual property would be “Ethics of Care” in my opinion due to the way they covered up and behaved after becoming knowledgeable. The first thing was when they became knowledgeable of the black mold and people began to get sick basically they just turned their head and continued to conduct business as usual. Second is when they became knowledgeable of AD23 being the cause of over two hundred cardiac deaths. They ignored the data and continued filling large orders and paid huge bonuses to all the executives and managers. Ethics of care is what makes actions right or wrong, criticizes the applications of universal standards as morally problematic. * Suggest at least three ways the company could compensate the people and nation of Colberia for its intellectual property and the damage to its environment.
First of all being all of the corruption that was displayed they are not an organization that seems to have the heart to make wrongs right. However, if held accountable they could be demanded to clean and restore their habitat to even better conditions than the area was in. Being that some of its area does not have indoor running water or electricity, they should be mandated to make provision for the Colberian’s to have those amenities. Being that due to their neglect of cleaning and providing a clean work environment was the reason their employees got sick with the bronchial complications, PharmaCARE should provide healthcare at no cost to everyone. * Compare PharmaCARE’s actions with those of at least one real-world company whose creativity in skirting legal technicalities led to ethical lapses in financial loss.
BP Oil or British Petroleum Oil is the 3rd largest energy company in the world operating in more than 75 countries, founded in 1906. The largest marine oil spill in history happened in 2010 when a massive amount of oil leaked from one of the wells into the Gulf of Mexico near the Mississippi River Delta. It was caused by a wellhead blowout during the digging process, which killed 11 people and eventually caused great harm to marine life and affecting about 800 km of American coastline. * Determine the success PharmaCare and WellCo shareholders would have in suits against the companies. * Violation of OSHA laws * Violation of EEOC laws * Violations of the FDA laws * Violations of CPSC * Negligence * Determine whether or not PharmaCARE lives up to its brand. Support the response.
NO! From the scenario it states that they are a caring, ethical and well-run company that produced high quality products that saved millions of lives and enhanced the quality of life for millions of others. First of all their lab was not up to standards they had black mold, when they were informed they ignored the warnings and not only did the employees become ill and end up having to miss work, however, their appointed administrator also became ill. PharmaCARE developed a medicine AD23, when reports started filtering in that people who received AD23 seemed to be suffering heart attacks at an alarming rate. The company ignored this information and continued to fill large orders and paid out huge bonuses to all the executives and managers, to include Allen, who after he received the employee of the year award began missing production schedules due to he began experiencing health complication. * Recommend at least three changes PharmaCARE can make to be more ethical going forward.
Adopt and take on the Sarbanes Oxley Act, which would provide new enforcement tools to prevent corporate fraud, punish corporate wrongdoers and discourage fraud with the threat of harsher penalties. The Act involves every reporting company, both domestic and foreign, to include their officers and directors. The Act also involves those that play a role in safeguarding the integrity of the company’s capital markets, such as accounting firms, research analysts and attorneys. The over-arching goals include restoring investor confidence and assuring the integrity of their markets. Within these goals, the main intentions deal with in the Act can be categorized as follows: * To strengthen enforcement of the federal securities laws; The Act has helped the Commission to restore investor confidence in the capital markets by strengthening enforcement of the federal securities laws, and by adding a number of new weapons to the Commission's enforcement arsenal to better deter would-be securities wrongdoers and compensate injured investors. * To improve the "tone at the top" and executive responsibility; the tone set by top management is the most important factor contributing to the integrity of the financial reporting process. * To improve disclosure and financial reporting; Investors need accurate and reliable information to make informed investment and voting decisions. Investor confidence in the reliability of this information is fundamental to the liquidity and vibrancy of our markets. * To improve the performance of "gatekeepers." Sarbanes-Oxley Act requires a better focus by other gatekeepers in the capital markets on their proper roles. Their effective operation is fundamental to preserving the integrity of our market. * And finally compare and contrast the consequences that can and does result from lying versus telling the truth. * Analyze the way PharmaCare uses U.S. law to protect its own intellectual property while co-opting intellectual property in Colberia.
The company offers free and discounted drugs to low-income consumers, and has a foundation that sponsors healthcare educational programs and scholarships, and its CEO serves on the PhRMA board.

TELLING THE TRUTH AND LYING: POSSIBLE OUTCOMES (Grover p. 53) Reason and Context of the lie | Results of Lying | Results of Truth-Telling | Conflicting expectations | * Easier to lie than to address the causing dispute * Appears to be a quick fix * The real issue is unresolved * No meaningful consequences (good or bad) * Liar has convinced himself and therefore has to convince those whom they are lying to | * Psychologically more difficult than lying * Can and most times correct issue * May bring about further conflict’ * Occasionally hard to have an influence on an solid structure * Enhances one’s r character as an honest person | Negotiation | * Short-term gain * Economically positive * Destroys long-term relationship * Must justify to oneself | * Supports high-quality long-term relationship. * Develops reputation of integrity * Models behavior to others | Keeping a confidence (that may require at least a lie of omission) | * Protects whatever good reason there is for the confidence * Maintains a long-term relationship with the party for whom confidence is kept * May project deceitfulness to the deceived party | * Defies a trust to the confiding party * Makes one appear dishonest to all parties in the long run * Forms the impression of honesty beyond utility | Reporting your own performance within an organization | * Might promote oneself or one’s cause’ * Forms fraudulent character over time * Must to continue to lie to cover the first lie | * Develops a reputation of honesty * May not always be positive |

Cited Resources:
Halbert, T., E. (2012). Law & ethics in the business environment (7th ed). Mason, OH: South-Western Cengage Learning
Prentice, R.A. , & Bredeson, D. (2010). Student guide to the Sarbanes-Oxley Act (2nd ed.). Mason, OH: South-Western Cengage Learning.
S.L. Grover, “The Truth, the Whole Truth, and Nothing but the Truth: The Causes and Management of Workplace Lying.” Academy of Management Executive 19 (May 2005), chapter 3, Ethics and Corporate Responsibility, p. 53
Who Regulates Compounding Pharmacies? Medscape. Nov 20, 2012.