The CompCare marketing concern is associated with intellectual property theft that was committed by a global US pharmaceutical corporation PharmaCARE. A former company’s researcher, John, points out that the management of the PharmaCARE group violated the major principles of marketing law by creating a subsidiary selling body, so that to advertise an unlicensed product and to avoid the attacks of the American Food and Drug Administration (FDA).
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Moreover, the client claims that PharmaCARE manipulated his idea of using the AD23 drug as a treatment for Alzheimer’s disease. Within its six-month existence, the new company sold a vast amount of the medication directly to consumers, which inflicted tragic consequences: 200 cardiac deaths were identified to be the outcomes of AD23 consummation.
Consequently, there is a need to regard the case as an intellectual property theft and to take some consistent measures to inflict a legal responsibility for the committed act on the PharmaCARE administration.
Ethical Marketing: Core Violations of Selling and Advertising Regulations
Ethical marketing is a dimension of truthful selling. Thus, sales organizations are responsible for saying and printing the correct things as well as employing honest advertising strategies (Chonko, 2015). The major issues that utilize moral marketing concerns include no-fraud advertising, post purchase effect, and taste and controversy.
The conception of honesty, which is the ultimate ethical issue, underlines the objectivity and clearness of the product’s description. In pharmaceutics, for instance, medicine selling has to comply with the recommendations and principal medical institution’s verification. Therefore, a customer must be provided with a complete account of a drug’s properties. Moreover, it is crucial illustrating the content of impediment, its usage concerns, and possible adverse effects.
The second issue accounts for a correlation between a customer’s expectations and a real effect that is made by the product. Thus, the medication that is sold in the drugstores has to possess the assigned treatment properties and to guarantee appropriate reactions.
Otherwise, there is a chance of post purchase dissonance, which stipulates a harsh violation of marketing ethics. Finally, the last concept of advertising ethics, which is taste and controversy, pertains to the issue of contrastive effects. The matter implies that some products may match the needs of separate customers but to be unacceptable for a mass usage since some people can suffer from their effects.
Due to the regulations of drug selling, the PharmaCARE management can be convicted of abusing three primary issues of ethics. Mainly, the corporation disregarded no-fraud advertising conception while showing the qualities of the AD23 drug as an official treatment method for Alzheimer’s disease.
Since both the individual customers and pharmaceutical organizations, who were buying the product, were not informed of its prescriptive recommendations, as well as possible harmful treatment outcomes, the AD23 advertising falls into a category of dishonest marketing.
The company made a crucial contravention of the second issue, for many patients did not receive adequate treatment. Moreover, 200 CompCARE clients died of AD23 consummation. The taste and controversy issue was violated by the management of PharmaCARE as well since the product’s remedial effects targeted only a limited group of customers while those people, who were prohibited from using AD23, were not encouraged to avoid its usage.
Direct-to-Consumer Marketing in Pharmaceutics
Direct-to-consumer (DTC) selling of pharmaceutical production, as well as its active advertising, is one of the most debatable medical concerns. The matter implies separate medication companies handling its products promotions and prescribing them straightly to the patients. DTC legality is supported only in two countries of the world, which are America and New Zealand.
Moreover, the concept raises much pressure and opposition even in these states. The issue should be regarded while making a judgment on the PharmaCARE case since the corporation established a system of AD23 direct-to-customer selling, which inflicted harmful consequences for the patients’ health conditions. The act presents a harsh violation, due to a compounding nature of the company’s subsidiary.
Despite the general rebuttal of direct-to-consumer marketing, separate study works show the advantages of the strategy. Thus, it is argued that straight drugs selling makes the patients involved in health care and connects people to medical consulters since they feel a need to seek medical advice.
Moreover, it is acknowledged DCD advertising contributes to a reduction of underdiagnosis tendencies, for people who are regularly reminded of certain health problems may feel the urge to check whether their personal concerns may be the outcomes of particular diseases.
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Consequently, direct-to-consumer marketing creates a bridge between patients and official medicine (Ventola, 2011). Much attention is also paid to the Internet DCD marketing. The experts argue that this method of drugs promotion stipulates healthcare awareness and provides safety monitoring (Liang & Mackey, 2011).
Nevertheless, the PharmaCARE case demonstrates a vivid example of DCD marketing manipulation, which leads to the adverse outcomes. Primarily, the company that is established as a compounding industry is forbidden to sell any medicine directly to the consumers. That is why, the action is considered to be a violation of the American FDA laws.
Moreover, the strategy of the CompCARE included misinforming the customers of the product’s characteristics and prescriptive recommendations. It promoted the drugs that were not thoroughly tested. Consequently, safety profiles were not followed by the corporation. Therefore, direct-to-customer marketing may be safe and profitable only if it follows the legal regulations of production control.
Managing Compounding Pharmacies: Legal Implications
The illegality of AD23 selling was inflicted by the limitations of the compounding pharmacies’ rights. Thus, such institutions can be licensed to take up drug marketing only if they register for acquiring a status of the outsourcing facilities (U.S. Food and Drug Administration, 2013).
Therefore, the group that was founded by PharmaCARE did not qualify for the exemption since it did not address the FDA so that to receive an official permission for creating a subsidiary industry. In contrast, the management of the company committed an illegal act by stealing a personal intellectual property of the employee, who worked for the corporation, and advertised it as a product of separate industry.
The parties that should hold a legal responsibility for the violation of the FDA laws are both the management of the PharmaCARE Corporation and the group’s representatives, who were appointed to the positions of CompCARE administrators and handled AD23 marketing.
The jurisdiction concern could have been avoided if the PharmaCARE management had followed the Compounding Quality Act regulations. Thus, the safe scenario implies filing an application for receiving a status of an outsourcing facility to the FDA.
In this case, the governmental institution could initiate regular inspection of the production according to the risk-based concerns and review the adverse effects of AD23 usage. As a result, the PharmaCARE management would have received a separate patent for handling the compounding pharmacy industry and selling the product straightly to the clients (U.S. Food and Drug Administration, 2013).
The PharmaCARE group manipulated the central issues of the U.S intellectual property law to save its patent and to keep its reputation. Thus, according to the American IP law, patents are allocated by the federal government of the USA to the individual companies, which ensure recognition of their primary products (American Intellectual Property Law Association, 2015).
The PharmaCARE’s obligation was to issue an official declaration of CompCARE being its subsidiary company so that to sell its medication legally. However, the management of the successful pharmaceutical company was aware of the possible problems that could be evoked by AD23 usage. In case of emergency, which occurred, the PharmaCARE could have lost its patent. That is why, the company’s management decided to keep its reputation unhindered by handling CompCARE from afar.
Intellectual Property Theft: Searching for Truth
The PharmaCARE company used the idea of one of its employees and used it as a foundation for developing a compounding pharmaceutical business. Since John, who suggested AD23 being used as a treatment for Alzheimer’s disease, did not give any official allowance for his conception’s appliance, the right to mental privacy was harshly violated.
A complex definition of an IP right provides an overview of its content. Thus, according to Warburton (2014), “intellectual property right is the right to enjoy the benefits of ownership of intangible assets as a result of unique intellectual work” (p. 1). The right for using certain ideas by the companies is guaranteed by a patent. Accordingly, the CompCARE industry, which had no legal marketing license, operated a stolen medical design and sold the products that were based on the embezzled conception.
Since every person is entitled to claim his/her right to mental property, John can issue a complaint against the PharmaCARE Corporation for the illegal usage of his AD23 treatment technology. One may argue that the researcher should face a court exposure since his investigation inflicted lethal consequences among the customers. Nevertheless, this is not correct, for John never offered the product for mass marketing but wanted to examine its properties and to adjust it to the full value medical usage first.
Thus, the researcher can receive recompense from the PharmaCARE management in three ways. First, the worker can estimate the infringement and require a respective financial coverage through a court. Second, the employee may decide to continue working on the project jointly with PharmaCARE if the company provides his design with a full patent. Finally, John can register his copyright individually, get separated from the company, and receive a financial recompense from the PharmaCARE management for him to develop the AD23 design.
The marketing history contains a vast number of intellectual theft cases that were sustained in marketing sphere. Though the IP embezzlement is a core problem of pharmaceutics, it often extends to multiple domains such as science and information technologies. For instance, in 2014, a group of swindlers, who stole much private data from such large computer companies as Microsoft and Valve Corporation, was caught in the USA.
According to the police reports, the conspiracy group functioned from different countries of the world accessing the computers of the leading information technologies institutions and using their unreleased programs, software, trademarks, and other confidential information to yield a profit. Specifically, the fraudsters were convicted of using the primary Microsoft’s gaming designs such as Xbox One.
The members of the embezzlement group are claimed to gain approximately $200 million through IP theft (The Federal Bureau of Investigation, 2015). Since the case became the first instance of IP theft in the Microsoft Corporation’s practice, the company’s management was significantly affected by the event. The products that are used by millions of users throughout the world attract much attention if there is any sign of fraud or malfunctioning in their work.
That is why, Microsoft makes many efforts so that to identify the source of data sleek. Specifically, the company’s management brought together different units and combined them into one working group that verifies all Microsoft systems and searches for malware. Thus, the case is similar to the PharmaCARE scandal since the pharmaceutical company was trusted by many medical organizations of the world as well, and the event put its reputation in question.
Law Protection: An Overview of the Consequences
It is crucial to review the outcomes of AD23 marketing so that to identify the guilt implications within the case. Thus, it may be argued that John, as a creator of the medical design, is guilty of 200 deaths that followed the product consummation. However, there are many consistent arguments that mitigate the scientist’s involvement in the prosecution. Mainly, the employee can not be blamed, for he did not intend to sell the product that was used by PharmaCARE.
Moreover, the advertised medication usage resulted in a cardiac death of his wife. Consequently, he is a victim of AD23 manipulation and can be susceptible to the moral compensation for the committed crime. Finally, the author of the project can be viewed as a whistleblower in this case since he was the first person who announced about the crime and started seeking legal protection of his intellectual property.
The author of the medical design suffers from a significant moral pressure in the situation, for his AD23 project was expected to bring many benefits to a global society by becoming a primary treatment of the Alzheimer’s disease. Instead, the researcher was forced to track the tragic consequences of his product’s manipulative marketing. Nevertheless, John has to be prepared for the possible media and public attacks as well as the pressure from the PharmaCARE management’s side.
The author of the project has to protect his security by creating a complete account of information that concerns AD23 marketing so that to have a reliable evidence of the committed crime. The scientist, however, does not have to spam the PharmaCARE’s activities in public or through the Internet. A compilation of the data should serve exclusively as a material for official investigations. Any information that concerns the project creation, verification, validation, and marketing might be useful.
Thus, John should include everything from treatment samples to the screen captures into a single paper trial. Finally, copyright registration for the AD23 usage can become a guarantee of the author’s legal rights for continuing the further work on the project. Thus, a burden of responsibility for the illegal marketing should be fully imposed on the PharmaCARE company management.
American Intellectual Property Law Association. (2015). Retrieved from http://www.aipla.org/about/iplaw/Pages/default.aspx.
Chonko, L. (2015). Ethical issues in sales decision making. Journal of Personal Selling & Sales Management, 35(2), 91-92.
Liang, B., & Mackey, T. (2011). Reforming direct-to-consumer advertising. Nature Biotechnology, 29(1), 397-400.
The Federal Bureau of Investigation. (2015). The fourth member of international computer hacking ring pleads guilty to hacking and intellectual property theft conspiracy (DEST no. 5144.TDDA89A).
U.S. Food and Drug Administration. (2013). Compounding Quality Act (DEST no. 6745. GRTA98A).
Ventola, C. (2011). Direct-to-consumer pharmaceutical advertising. A peer-reviewed journal for managed care and hospital formulary management, 36(10), 669-674.
Warburton, C. (2014). Intellectual property theft. The Encyclopedia of Criminology and Criminal Justice, 13(1), 1-6