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PharmaCare Company’s Ethical Issues Essay


The contemporary business environment under the circumstances of perfect competition brings up the issuesof social responsibility, integrity, and ethics(Kuppuswamy, 2009). These factors have caused uproar in the field of product advertising, intellectual property, and product safety. This paper provides a case of compounding practices by PharmaCare Company, which is implicated in legal and ethical matters. This paper seeks to shed light by screening the case of John, who is a former researcher at PharmaCare. The paper will further determine if John has intellectual rights to the AD23 drug produced by PharmaCare.

Ethical issues of advertising

Based on the current case, it is evident that advertisement goals of PharmaCare are integrated within the need for increased market share. An ethical advertisement should reflect integrity and morality of an enterprise. Besides, the ethical advertisement should cover the interests of the business as well as the customer. The ethical claims associated with advertisement involve awareness creation, pricing, and revelation of risky products, hype, data disclosure, and disregard of profits among others(Wolfe, 2014).

The need to make profit exceeded the ethical measures observed when dealing with human related products. The business behavior of PharmaCare in advertising went overboard from the ethical consideration based on the effect on consumers’ wellbeing.

Misguided presentation of the products through advertisement happened in the process of communicating to the consumers. Poorly sophisticated clients were exposed to potential risks associated with the product since they had little or no knowledge to probe the product functionality and probable repercussions. Ideally, PharmaCare breached advertisement principles by facilitating the distribution of dysfunctional products. This move violated the Food and Drug Administration’s (FDA) scrutiny measures about AD23. PharmaCare’s move to advertise directly to consumers denied poorly informed patients the chance to benefit from doctor’s prescription (Oppenheimer, LaVan, & Martin, 2014).

Ethical issues about marketing

The marketing ethical issues define the association between the business and the clients. Ethical issues are very vital in the field of drug marketing since it determines the proficiency of use and consumers’ health. The FDA in the United States has developed a national code of ethics to guide the pharmaceutical industry in a bid to fulfill consumers’ desires with trustworthy and reliable marketing data. Responsible presentation of a drug in the market should be tied to the correct information about its manufacturing and usage as well as fair price (Wolfe, 2014). Marketing ethical issues should reflect factors such as disregard of risks, inadequate product information, malicious centered marketing, and corruption among others.

Based on the above facts, PharmaCare operations were unethical because the organization failed to comply with the FDA standards for production and distribution of AD23. Besides, the company went on to supply AD23 despite the reported adverse consequences of the administered drugs associated with over two hundred cardiac deaths. Promoting CompCare and organizing marketing rallies even after the heinous crime was inhumane and unthinkable.

Pharmacare breached various ethical issues such as fair treatment, engaged the physicians in corrupt deals to promote CompCare, and confiscated vital information regarding the changed composition of AD23. In other words, marketing patterns of PharmaCare failed to address the consumers’ demands but rather focused on maximizing profits through trade of hazardous and unlicensed drugs.

Ethical issue about product safety

The organizations involved in the production of new drugs in the U.S are mandated under the law to seek approval from the FDA(Sullivan, Aikin, Chung-Davies, & Wade, 2016). This move ensures that businesses are brought under the scrutiny of approved authorities to promote product quality and safety. Thus, the decision by PharmaCare to promote the new AD23 with higher concentration without the scrutiny of the FDA about its safety was unethical and inhumane.

The standard implementation of drug safety should be facilitated via the agreement to client quality measures. The claim of compromised quality is linked to the breach of the standard legislation, and the national code of ethics. PharmaCare blatantly ignored the safety standards and continued to market the new AD23 despite the negative effects linked to the products.

Ethical issues about intellectual property

An intellectual property associates with the abuse of copyright. The violation of intellectual property is instigated by the urge to possess the art such as drug compounding, and present this drug as an innovation in the market(Kuppuswamy, 2009).

The ethics of the intellectual product entails the just use of copyright with no profit-making agenda, theft, or malicious use. Thus, compensation should be made based on agreed terms in any case intellectual rights are infringed. In this light, PharmaCare violates ethical issues about intellectual property by reformulating AD23. Besides, PharmaCare failed to comply with the FDA’s measures making the intellectual property unlawful. Furthermore, John and his research team were not consulted, hence, losing the intellectual property in the process of CompCare establishment. Essentially, PharmaCare violates all the ethical concerns by avoiding the FDA standards.

Argument against Direct-to-Consumer (DTC) marketing strategy

The high rate of competition has compelled companies to seek malicious strategies to complement marketing efforts(Friedman & Gould, 2007). Despite the bold specifics outlined by the FDA against DTC, PharmaCare undertakes DTC strategy in promotion activities. Thus, the use of direct communication enables PharmaCare to conceal critical information regarding the potential risks of AD23.

DTC facilitates a careless environment whereby the consumer is exposed to the dangers of relaxed rules and insufficient regulation. To promote the use of the drugs without doctor’s prescription, companies attach written manuals to encourage consumers to self-administer drugs(Friedman & Gould, 2007).PharmaCare utilizes advertisements to make huge profits that are used to silence political activism in favor of taxes. Besides, PharmaCare offers discounted prices to influence many consumers to stay loyal to their products such as AD23. Therefore, PharmaCare rarely considers researching to establish best practices in human health.

Determining of bodies responsible for regulating compounding pharmacies and if PharmaCare could face legal exposure surrounding its practices

The top management of PharmaCare is the first body responsible for regulating the company’s activities. PharmaCare should take responsibility for the adverse effects related to the consumption of the AD23. Contrary, the executives in PharmaCare have prioritized profit making at the peril of consumers’ health. PharmaCare avoided evaluation of AD23 by the FDA since it suspected quality issues with the product. Besides, PharmaCare utilized the CompCare to promote and sell AD23 on prescription terms.

The adverse effects reported following the death of over two hundred patients encouraged PharmaCare to seek alternative ways to gain from emerging developments as well as evade the law. Second, the research team led by John is also responsible since they overlooked the risks that could arise upon implementation of these new developments. The research team concentrated on reformulating the AD23 but failed to predict the adverse effects and the possibility for exploitation by PharmaCare.

A third party responsible was the FDA. The FDA is a state-based board that oversees the processing, packaging, and promotion of pharmaceutical products in the US(Humphrey, 2012). Even though PharmaCare did not allow the FDA’sscrutiny of their compounding practices, the FDA should have acted within its power and conduct investigations. The FDA serves as the sole state machinery tasked with overseeing drug production.

Therefore, the FDA should be given more powers to stage investigations for any authorized pharmaceutical. The FDA should also acquire powers to halt any compounding activity that ignores the ethics of marketing, advertising, safety guidelines, and the intellectual property. PharmaCare could face legal exposure because it prioritizes widening of its new product line without considering the ethical aspects ofprotecting human health. Following the deadly effects of the new AD23, PharmaCare should have stopped production of this product to show its commitment to human safety.

Evaluation of the manner in which PharmaCare used U.S. law to protect its intellectual property and if John has any claim to being the true ‘inventor’ of AD23

The U.S has elaborate laws that protect the right to intellectual work(Humphrey, 2012). The PharmaCare was aware that the U.S law offered protection on its intellectual property. Besides, operating beyond the U.S borders ensured that PharmaCare operations were also covered by the international laws regarding intellectual work. The emergence of CompCare was intended to formulate the new drug and sell it on a prescription basis in a bid to cover the new production with the U.S laws. PharmaCare has a legal body that works within the U.S law to protect the activities of the company. Besides, PharmaCare undertakes an evaluation of the organizations it associates with to ensure that they are legally allowed to function within the U.S.

Since John was an employee of PharmaCare working with a team under corporate agreements, he could not enjoy absolute rights as an inventor of the new AD23. Thus, John’s efforts were constrained within corporate conditions to help PharmaCare in AD23’s research and development. Furthermore, John cooperated with a team hired by the company. The research team made the development of the new product a shared intellectual property. This aspect suggests that John is only a contributor and can only claim shares to the intellectual property.

Possible ways PharmaCare could compensate John for utilizing his intellectual property

First, PharmaCare might choose to identify John as the Chief co-founder of the new AD23 upon licensing of the new product. This step could ensure that John feels being appreciated for the huge development in the medical field. Second, PharmaCare might seek to promote John’s career path by selecting him as the company’s research partner. Selecting John to lead further research in the company serves as a source of motivation to seek more breakthroughs in the field of medicine.

Third, a portion of company’s profit should be divided between the research group and the enterprise. John should be the priority beneficiary since he contributed immensely towards the establishment of the high-selling drug. It is also reasonable for the company to compensate John for the loss of his wife. This compensation is essential to avoid lawsuit since the AD23 belonged to the intellectual work linked to PharmaCare.

Current example of intellectual property theft, and evaluation of the influence on Company’s brand

According to Walker (2015), “a hacking group based in the U.S achieved unauthorized access to computer networks of several organizations including Microsoft Inc. Epic Games Inc., and Zombie Studios between 2012 and 2014” (para. 3). The group managed to steal about $ 100 million worth of intellectual property. Alcala, one of the group members,pleaded guilty for spearheadingthe stealing of trade secrets and intellectual property from the victim companies.

These revelations made significant implications to the three companies’ reputation. The fact that the hacking team managed to make access to the companies’ database without detection meant that the companies’ products could not be trusted for safety. Besides, this manifested much ease to hack the Microsoft, Epic Games and Zombie Studios’ programs and their unreliable protection from cyber-crimes.

Summary of the potential issue surrounding the death of John’s wife and other potential litigants against PharmaCare because of AD23 effects

The death of John’s wife is attributable to the negligence by PharmaCare to conduct intensive research before authorizing the sale of AD23. The urge to maximize profits motivated PharmaCare to overlook human health and blackmailed oversight authorities via corruption to pursue its unscrupulous activities. The resulting adverse effects of the drug led to hundreds of deaths and other side effects. Despite the compensative payments provided for the affected families, various bodies can succeed lawsuits against PharmaCare.

The principal claim involves unethical and unlawful operations of PharmaCare. John is a potential litigant since he has evidence of possible effects of AD23 as well as information implicating PharmaCare’s unwillingness to stop marketing AD23 despite the heightened concerns about quality. The overall society can team up and file a lawsuit to seek compensation for being exposed to dangerous health conditions.

Identification of both the major arguments that John can make to claim that he is a whistleblower and the type of protections that he should be accorded

The U.S law asserts that a whistleblower is an individual reporting a malicious or unlawful endeavor towards a particular group(Oppenheimer et al., 2014). John could qualify as a whistleblower if he sought for protection from the legal entity. The labor union, state law, and the company’s regulations are obliged to offer John privacy and protection from sanctioning. John was aware of the side effects of AD23, but he was not certain that AD23 had caused the death of his wife and hundreds of other patients.

His knowledge about the side effects provided a claim to present before the law firm of Dewey, Chetum, and Howe. John had an upper hand in this case since he was aware of the unrelenting spirit of PharmaCare to roll the dice no matter the circumstances. Besides, John was in possession of an internal memo of PharmaCare that disclosed the possible faults with AD23. These facts set John free from any responsibilities for the problems, and he could be accorded sufficient protection as a whistleblower.


The case of PharmaCare entailed the ethical considerations involved in the compounding pharmaceuticals. AD23 reformulation was rated to be a highly competitive product, and that could prevent the proliferation of Alzheimer’s disease. Intentionally, PharmaCare conducted unethical promotion of AD23 to increase market share. Fortunately, the sales increased substantially. The adverse results were the death of John’s wife and hundreds of other patients. Despite the inhumane consequences, PharmaCare did not halt the sale of AD23. Consequently, these aspects caused ethical and legal challenges concerning PharmaCare’s business behavior.


Friedman, M., & Gould, J. (2007). Consumer attitudes and behaviors associated with direct‐to‐consumer prescription drug marketing. Journal of Consumer Marketing, 24(2), 100-109.

Humphrey, J. (2012). Food safety, private standards schemes, and trade: the implications of the FDA Food Safety Modernization Act. IDS Working Papers, 2012(403), 1-65.

Kuppuswamy, C. (2009). The ethics of intellectual property rights: the impact of traditional knowledge and health on international intellectual property law. Asian Medicine, 5(2), 340-362.

Oppenheimer, M., LaVan, H., & Martin, W. (2014). A framework for understanding ethical and efficiency issues in pharmaceutical intellectual property litigation. Journal of Business Ethics, 132(3), 505-524.

Sullivan, H., Aikin, K., Chung-Davies, E., & Wade, M. (2016). Prescription drug promotion from 2001-2014: data from the US Food and Drug Administration. PLoS One, 11(5), 1-7.

Walker, D. (2015). Man pleads guilty to intellectual property theft conspiracy impacting Microsoft, other firms. Web.

Wolfe, S. (2014). Proposed US Food and Drug Administration guidance for industry on distributing medical publications about the risks of prescription drugs and biological products.JAMA Internal Medicine, 174(10), 1541-1543.

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"PharmaCare Company's Ethical Issues." IvyPanda, 29 Sept. 2020, ivypanda.com/essays/pharmacare-companys-ethical-issues/.

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IvyPanda. (2020) 'PharmaCare Company's Ethical Issues'. 29 September.

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