Assignment 3: Legal and Ethical Considerations in Marketing, Product Safety, and Intellectual Property
Quincy McAdoo
Dr. Teresa Smallwood
LEG 500- Law, Ethics, and Corporate Governance
08 Sep 2013

Assignment 3
Legal and ethical considerations
Marketing and advertising
Marketing is composed of the performance of business activities, which direct the flow of goods and services from the manufacturers to the consumer. Bothe the advertising and marketing industries operate within federal regulations that are monitored by the federal trade commission. The advertisers have to be careful and act ethically taking extra care when making their adverts.
Each aspect of marketing such as pricing, promotion, development and sales has a number of ethical concerns that tend to arise.
For a customer to make the right decisions with regard to a given product they need information and it is at this point that an ethical concern arises. Companies may not provide all the necessary information required for the customer to make informed choices for a number of reason that include protecting the recipe. However, the customer is denied the information they need to have knowledge about a given product. In some of the cases, the information provided tends to be deceptive and does not give the whole truth about the product.
This tends to influence the customer to make decisions on the basis of wrong and deceptive information. A good instance of this is where information is labeled on the packaging and the label. Not all information regarding the product is provided and in some of the cases, it tends to be presented in a manner that a consumer will not understand easily. This is because of the fact that the information may actually prevent the customer from buying the product since it may contain ingredients they do not want at given levels.
In advertising, the federal trade commission act has set a requirement for truth in the advertisement field. According to the bureau of consumer protection's business bureau, advertisement in the United States has to be truthful
Advertisement to children
This is the other area of concern in the marketing and advertising industry. FTC also places special emphasis on truth in advertisement when it is applied to children. However, a number of unethical behaviors are allowed. According to the former commissioner of FTC (Roscoe B. Starek) children are less likely to understand the exaggerated statements and images. This he explained by citing the example that a child may believe that a helicopter toy come fully assembled. The interpretation of the law tends to completely ignore ramifications that are unethical in legal advertisement. For instance, building a brand loyalty among children prior to their understanding about the brand and what it is may influence the child to develop negative self-image or making them dependent on the products. This in turn may result in the impediment of social development.
The advertisement of harmful products
This is the other ethical concern that arises in advertising. Different countries will have different perspectives of vice services and products. There needs to be a balance between placing of personal responsibility on the citizens in addition to the regulation of what the citizens are allowed to indulge in. Some of the vice are prohibited from being advertised in some of the media whereas others are given a free hand.
Intellectual property
Today, much of the international trade tends to be carried out according to the trade agreements that involve a substantial and uniform protection of intellectual property rights. Intellectual property can be said to be primarily the protection of given information, which the owner has the right of allowing others to access in a controlled manner. For this reason, copyrights, trademarks, and patents are all forms of intellectual property that the owners hold rights to. There are a number of ethical issues that arise and the main four can be summarized using the acronym PAPA.
Privacy
This is concerned with the type or amount of information that once can actually share with others, the information they can keep and under which conditions they can share given information. Privacy in this era is threatened by the growth in technology with capacity that is enhanced for surveillance, storage, communication as well as computation. Moreover, the increased value of this information in decision making is one of the insidious threats. For this reason, information and its privacy are actually threatened and less privacy is assured.
Accuracy - who is responsible for the authenticity accuracy and fidelity of information and who is to be held accountable for the errors that are present in information.
Property- the other ethical question lies in property and who owns given information. This includes the questions of just and fair prices for the exchange of the information, who owns the channel through which this information is transmitted and how it can be accessed.
Accessibility- accessibility is concerned with the type of information a given organization or party has the right or privileges to obtain under given conditions.
Use of intellectual property in the pharmaceutical
Critics have pointed a finger at the unethical use of intellectual property in the pharmaceutical industry claiming it is being used to set prices far above what those in third world countries can afford. Given that a good number of the raw material came from these regions, it is unethical to use intellectual property rights to set prices at very high standards (Rivk & nevin, 2004).
Product safety
According to the strict liability theory which is currently gaining significance acceptance, manufacturers are wholly responsible for all the harm that result from a dangerously defective product even in cases where due care has actually been exercised and contracts observed. However, there are ethical issues that tend to arise with regard to product safety including;
Partial or faulty information
In this case, the manufacturers may fail to adhere to the regulations and requirements and hence would give deceptive information concerning a given product so as to ensure that it actually sells
Increased prices
As the measures become strict to comply and ensure safety, other manufacturers tend to increase prices of given products or reduce the amount/ quality or quantity of the product. This would mean that the consumer would be the one to pay the price for the safety of the product. In this case, the company or manufacturers act in a manner that is unethical.
Direct to customer marketing
Marketing has played a central role for drug manufacturers to be able to move drugs to consumers. In recent years, drug companies have resulted to direct to customer marketing to ensure that their products are recognized by the consumers and bought. However, it is about time that this trend stops for a number of reasons that include;
Bias
A number of studies have shown that DCT advertising actually promotes the use of drugs by providing biased educational material as well as emotional appeal that pulls the consumer to use these drugs more than other healthy alternatives (Kaphingst, rudd, & daltroy, 2004). On the other hand, the advertisements tend to create some level of distance between the patients/ consumers and the physicians, who would be at a better position to give advice and direction pertaining given health issues. The ads tend to manipulate and give power to the patient since they are biased and simply designed to ensure sales increase. Moreover, the public is manipulated in to thinking constantly and worrying about their health from such ads, which result in unnecessary worry and concern.
Manufacturers are involved less educating and more selling which is the direct opposite of what they should do. For this reason, they do not focus on assisting patients with what really matters. Although the patients and the general public is made aware and provided with information that is beneficial to them, there is also a potential adverse effect on those who get to see and hear the message but do not have the condition that needs to be treated.
According to a survey that was carried out to determine the effects of direct to customer marketing, most physicians agreed that a majority of their patients had watched or heard about the ads, which encouraged them to ask thoughtful questions. Moreover, these physicians felt that these ads did not provide the information with regards to the risks and benefits equally well. 78 percent of these physicians felt that their patients understood the benefits of this drug very well as compared to 40 percent of them who felt that their patients understood the possible risks. About 65 percent of the physicians said that the ads confused their patients concerning the risks and benefits. According to 8 percent of the physicians, they felt that they were being pressured to prescribe given types of drugs when they were asked (Murray, donelan & lee, 2004).
These are some of the reasons as to why DTC should be stopped and end put to it. Patients no longer feel the need to try alternative means of staying healthy since the drugs present a one-step means of recovery.
Compounding pharmacies regulation
Pharmacy compounding is the process that involves the mixing of drugs for given patients. The philosophy behind is that individual bodies is different and may require medications that are prepared specifically for their needs.
Individual state boards of pharmacy play the role of regulating their own pharmacies respectively (compounding or otherwise). However, the federal government oversight also has a part to play in the regulation. The federal guidelines have to be observed with regards to large scale manufacturing of the drugs.
Despite the fact that a number of experts and members of the congress argue that FDA already has sufficient authority over each form of compounding under 1938 food and drugs legislation. According to Robert Courtney, a former pharmacist in Kansas, FDA should be given a greater oversight of the compounding pharmacies. There is need for FDA to statutorily to be able to regulate compounding and the specifically needs to be able to distinguish between compounding and manufacturing. In order to prevent such occurrences such as the case that happened NECC, FDA needs to be empowered to be able to revoke the compounding licenses directly or require an additional licensing for large scale compounding. In this case, FDA would be responsible in overseeing and hence going a long way in protecting the public from the compounding pharmacies and any fatalities that may arise (Laza & kowalczyk, 2012).
Ethics in pharmaCare
Any company in business must operate under certain ethical standards if it is to portray a moral picture in the eyes of the society. It is these standards that help the company be ethical and therefore live up to expectations of the governing laws and the society.
Utilitarianism
Although the drug was meant to benefit the patients with given disease such as the Alzheimer’s disease, the company showed that that was not their main aim by the fact that they dismissed reports about the drug negatively affecting patients and that even some had died. In this case, the company still acted in ways that were not ethical with regard to utilitarianism.
Deontology
Deontology refers to the study of nature of duty and obligation. Despite the fact that they are represented to have made a commitment to caring for the environment, they are shown to do the direct opposite in the African nation with regards to how they use the native and destroying their habitat. However, they display duty and obligation by the fact that they provide free drugs to the low income consumers and scholarships in healthcare educational programs.
Apart from these, they show less duty towards their employees, who are suffering due to the bad work environment and the patients who are dying due to the complications brought about by the drugs.
Virtue ethics
Virtue ethics is associated with one's character and the ethical behavior of an individual. The executives and management of the company threaten to fire the employees since they are complaining of poor health as a result of the mold present in their working condition is a sign that they (executives) are acting in ways that are immoral and thus unethical. As responsible individuals, they should have shown concern and humanity by taking the concerns seriously so as to allow them to seek medical assistance. Personal virtues are also shown to be lucking by the fact that the company executives do not want to take responsibility for what the drugs has done to the patients, some of whom die. Whereas they live in luxurious places, they do not seem to care about the poor natives who have to walk for long distances to deliver the plants used for manufacturing the drugs.
Ethics of care is also shown to be lacking by the manner in which the company treats the employee, both natives and those working in the company. Even less care is shown where the company ignores data about the dying patients whose health has been complicated by using the new drug. My personal ethical compass says that the natives should have been compensated since it was there environment being destroyed and their intellectual property being used. Moreover, the company should have compensated the workers since they were getting sick as a result of poor working conditions in addition to compensating patients and recalling the drugs.
Environmental laws
Through the extension of the superfund, the company could carry out its activities as long as they would act in accordance with the law. Moreover, the initiatives of the company which include a commitment to the environment through a number of initiatives create a good image of the company since they are shown to care for the environment through these initiatives. Through the extension of the superfund, any hazard to the environment from the company could be taken care of and effects reduced.
In the native African region, the company destroys the habitat in addition to endangering the native species. They co-opt the intellectual property in Colberia due to the fact that the people there are poor and desperately looking for any work that will provide them with a living. The main reason as to why the company may be doing this differently in the African region would be due to less restrictive rules and laws.
Compensation
Given that the company has acted in a number of ways that are unethical towards the naive in the African region, there are a number of ways through which they can compensate the people. This may include;
Initiatives to protect the habitat
The company has destroyed the habitat and endangered the natural species in their quest for the plant. For this reason, they should come up with ways of working with the locals to reduce the effects and provide monetary support that will ensure that these initiatives are well implemented.
Better pay for the workers
They Colberians are paid a dollar a day despite the fact that they have to walk long distances and deliver about 50 pounds of the baskets containing the indigenous cures. The company should try and increase their pay and together with the workers develop better strategies that will guide how they work together. A dollar a day for that much work is unethical and a way of taking advantage of the workers. By providing better pay for the services, the company would have compensated the natives
Development initiatives
The Colberians are said have low standards of living where many of them live in primitive huts without any electricity and running water. The company, which has been said to provide scholarships and free medicine to the poor, should also come up with initiatives that will see to it that the lives of the people in the region are improved by introducing strategies that will see development through better education, provision of electricity and water. By doing so, the company will have given back to the community.

References
Rivka amado & nevin m. Gewertz (2004). Intellectual property and the pharmaceutical industry: a moral crossroads between health and property. Journal of business ethics 55 (3).
Kaphingst ka, dejong w, rudd re, daltroy lh. (2004) A content analysis of direct-to-consumer television prescription drug advertisements. J health commun;9(6):515–528.
Murray e, lo b, pollack l, donelan k, lee k. (2004) Direct-to-consumer advertising: public perceptions of its effects on health behaviors, health care, and the doctor-patient relationship. J am board fam pract;17(1):6–18.
Lazar k, johnson cy, kowalczyk l. Pharmacy board adopts new rules. The boston globe. 2012. Http://www.bostonglobe.com/lifestyle/health-wellness/2012/11/01/mass-pharmacy-board-approves-tougher-rules-for-compounding-pharmacies/em9bzmguut1u6sd96ty2km/story.html accessed november 12, 2012.