Legal and Ethical Considerations in Marketing, Product Safety, and Intellectual Property

Legaland Ethical Considerations in Marketing, Product Safety, andIntellectual Property

EthicalIssues Relating To Marketing and Advertising, Intellectual Property,And Regulation Of Product Safety

Thereare various ethical issues that relate to marketing andadvertisement, regulation of product safety as well as intellectualproperty.

Advertisingand Marketing

Itis considered unethical to advertise or market harmful products.Different countries perceive the advertisement of vice or harmfulproducts in a different way. Striking a balance between bestowingresponsibilities on consumers and regulating what consumers areallowed to engage in, is a matter of concern in advertisement(Keillor, 2011). In the United States, some form of vice areregulated while others are prohibited with others being given a freehand. Pharmaceuticals advertisement poses an increase in prices,which is considered an ethics issue. Besides, the advertisement ofdrugs in the media fails to provide the list of risks that areassociated with these drugs.

Ethicsand Intellectual Property

Intellectualproperty is an area in law which is concerned with protecting therights of those who come up with ideas. There are variouscontroversial opinions regarding intellectual property. One suchethical concern is intellectual property in medicine. The sharing ofknowledge has allowed the medical society to advance the treatment ofalmost all illnesses. One of such a case is the U.S Human GenomeProject which is a conglomerate of medical researchers comingtogether to map human DNA. The group aimed at analyzing the structureand maps the location of about 80,000 genes constituting human DNA,and establishes the sequence of the 3 billion DNA sub units. Thegroup intended to make this information available to the public so asto help save lives (Keillor, 2011). Keeping such information confinedcould withhold information essential to medical researchers for usein preventing and treating medical problems.

Theinvention of obstetric forceps which is an important invention inmedical field used when there are issues with labor had been kept asecret for years by Queen Ann the inventor and the surgeon.Consequently the number of mothers and babies saved by this inventionremain low that it could be. The information was discovered byaccident and has saved several lives since them. These are some ofthe ethics arising from intellectual property.


Manufacturersof products are required by the law to give consumers adequateinformation regarding the product, including the ingredients used inthe product, the health risks associated with the product especiallyfor drugs and alcohol and pharmaceuticals as well as the safe useperiod (Keillor, 2011). However, manufacturers are always reluctantto provide information regarding the ingredients for fear of theircompetitors stealing their recipe hence may not provide it all toconsumers which is unethical. In addition, manufacturers may withholdsome information on their product during advertising such as fastfoods which have been linked with obesity epidemic in the UnitedStates as it may be negative to their business. These practices areunethical.

ArgumentAgainst Direct-to-Consumer (DTC) Marketing by Drug Companies.

Directto Consumer Marketing (DTC) by drug companies is an aspect ofcontroversy in many countries. DTC advertising is likely to amplifythe request rates of the drug and the likelihood of the drug beingprescribed by medical professionals. This causes an increase in thecosts of these drugs. In an analysis by managed care industry between1999 and 2000, prescriptions written for the top fifty intensivelyadvertised drugs rose by 24.6 percent as compared to just 4.3 percentfor all the other drugs combined. This presents adverse effects whichare downplayed by DTC marketing. In addition, when DTC marketing isdone, real life and long term safety studies concerning the drug areusually in progress which places millions of lives in danger. Forexample, Vioxx an anti-inflammatory drug that was used to treatarthritis was extensively marketed and featured Olympians BruceJenner and Dorothy Hammill with more than $100 million in promotion.The result was increased prescription, but was later pulled out ofthe market for being linked with doubling the risk for stroke orheart attack. According to the FDA, Vioxx was directly responsiblefor over 139,000 heart attacks and about 30,000 deaths resulting fromheart attack or stroke (NCSL, 2013).

RegulationOf Drug Companies by FDA

TheFood and Drug Act (FDA) through its subsidiary Division of DrugMarketing, Advertising, and Communication is responsible forregulating the advertisement and marketing of pharmaceuticals to seethat marketing and advertising ethics are met. The DDMAC acknowledgesthree forms of DTC advertising including consumer advertising productclaim ads, help seeking ads, and reminder ads. DDMAC mandates thatsuch ads comprise of the drug name, a fair balance of info relatingto its effectiveness and risks.

Whena drug company is seeking to carry out a marketing campaign toconsumers, the DDMAC supplies an untitled letter requiring thecompany to comply with regulations. The letter does not serve as awarning and no stipulation that action will be taken on violators. IfDDMAC feels that the company has violated the regulations, a warningletter is issued which require the company to review the campaign.The company is given 15 days to comply, after which a fine may beimposed. The main problem is that, the law provides a penalty notexceeding $250,000 for first time violators in any three-year period,and not exceeding $500,000 for any other violation thereafter. Theissue is, these fines only make a portion of the total advertisingbudget for most pharmaceutical companies (Federal Food, Drug andCosmetic Act, Chapter III)

FDAshould have compelled the company to immediately withdraw from themarketing of the AD23 and impose fines and regulation to its futurebusiness. This would have prevented an escalated demand for the drughence saving lives. The FDA should be given more powers includingrevoking licenses for violators besides monitory fines which seem tobe very insignificant for drug companies.

EthicalPrinciples and PharmaCARE’s Use of Colberian Intellectual Property


Utilitarianismis a consequential form of ethics which focuses on the outcome of anaction to determine its ethical value (Shaw,2010).In utilitarianism view, PharmaCARE is ethically right as its productsultimately helped in curing several diseases in various parts of theworld.


Putforth by Emmanuel Kant, deontology judges the morality of an actionby how the action followed the stipulated regulations (Shaw,2010).In the current situation, PharmaCARE is a U.S based company whereintellectual property is highly observed. In addition, the companyprotects its intellectual property back in the U.S. Therefore, byusing Colberian intellectual property, PharmaCARE is ethically wrong.


Virtueethics stress the role of a person’s character and the virtues thata person’s character represents for determining or assessingethical behavior (Shaw,2010).PharmaCARE’s management are people who are well aware of ethicalvalues and would not allow anyone to violate their intellectualproperty. As such, they did this intentionally for self gain which isethically wrong on basis of virtue ethics.

Ethicsof care

Careethics is a virtue which entails maintaining the world of, andmeeting the needs of others and oneself (Shaw,2010).In this context, PharmaCARE intended to use the knowledge ontraditional medicine to manufacture drugs that would enhance thelives of millions of people world over and not only in Colberia.Thus, they are ethically right.

Inmy own ethical stand, PharmaCARE did wrong as it took advantage ofthe people of Colberia. Since they are ignorant of intellectualproperty and the country’s regulations are not as stringent as inthe U.S, PharmaCARE saw an opportunity to exploit business. This isethically wrong.

PharmaCAREProtection of Intellectual Property in U.S and Colberia

Intellectualproperty in the United States is protected by the law. Intellectualproperty rights give the owner of an invention or idea the right toshun others from access to use their property for a given period oftime. IPR are protected using various approaches including patentsand trademarks. PharmaCARE uses these mechanisms to protect itsintellectual property in the U.S.

Patentsprotect an invention from being replicated, sold or used by anotherparty for a certain period of time. There are two types of patentswhich are applicable to PharmaCARE. They include

UtilityPatents: patents are used to protect inventions that have a specifiedfunction such as chemicals, technology or machines (Keillor, 2011).

Designpatents: these are patents meant to protect the way a final productappears or is packaged.

Toensure their products are patented, PharmaCARE applies and getapproved for a patent through the U.S patent and Trademark Office.

Trademarks:Trademarks are used to protect the names and symbolizing marks of aproduct or a company. PharmaCARE uses trademarks to safeguard fromimitation by other drug companies. The main aim of trademarks is tomake it convenient for consumers to distinguish from competitors.Once a business begins suing particular mark to identify the companyor a product, trademarks becomes automatically acquired (Keillor,2011). The company can use the term TM without necessarily filingthis symbol or name with the authorities. For example PharmaCARE is atrademark which under the U.S law is well protected againstinfringement.

Unfortunately,PharmaCARE has taken advantage of the ignorance of the people ofColberia and have used their intellectual property unlawfully.

PharmaCAREPossible CSR in Colberia

PharmaCAREhas done great damage to the people of Colberia by use of itsintellectual property as well as damaging the environment. Tocompensate the people, it is advisable for the company to practiceCorporate Social Responsibility (CSR). CSR is a way of giving back tothe society and other stakeholders including the government.PharmaCARE can

Establishwater and electricity projects in the country and particularly forthe community in which they operate so that they can improve theliving standards of this population. Majority of the community livein deplorable conditions in mud houses.

Thecompany which makes considerable profits from the knowledge and thelabor of the people of Colberia could also engage in descent housingprojects for the population. This can include establishing affordablehousing for the population, particularly their employees.

Inaddition, the company can engage in rehabilitation of theenvironment. From tree planting projects to water conservationprojects.

Furthermore,the company can offer free health care to the population since thecompany has benefited greatly from the community. The company canestablish dispensaries that are fully equipped to provide health andmedical services to the people of Colberia.

Merck&amp Co. Ethical Issues

Merck&amp Co. is a pharmaceutical company which has engaged in a numberof unethical practices including DTC marketing of its Vioxx drug thatwas meant to treat arthritis but apparently the drug caused increasedrisk for stroke and cardiovascular disease. Recently, the companyrevealed that its Medco pharmacy benefit management plan booked $14billion in revenue that never was. This was ahead of a planned publicoffering. The results saw the company’s shares fell by about 2.15percent (Keillor, 2011). Though this was insignificant, unethicalaccounting can result to serious financial losses for a company.

Determinethe Success PharmaCARE and WellCo Shareholders in Lawsuits Againstthe Companies

Filinga lawsuit against these companies, stakeholders would benefit fromcompensation by the company. First employees of PharmaCARE includingTom, Donna and Ayesha would be heavily compensated on various groundssince they had compelling evidence against the company’s misconductincluding the use of bogus patient names to facilitate its directmarketing technique.

Consumersalso can succeed in compelling the company to cover for their medicalexpenses since the company continued to sell AD23 even after it waslinked to heart attack.

DoesPharmaCARE Live Up to its Brand

PharmaCAREdoes not live up to its brand. Through its new initiative “WE CAREabout YOUR world” PharmaCARE was focused on the environment throughrecycling and other green initiatives. However, this is not exhibitedin its practices as the company’s lobbying efforts and PACsuccessfully evaded environmental laws and regulations among them theextension of Superfund tax established by Comprehensive EnvironmentalResponse, Compensation and Liability Act (CERCLA). In addition, itsoperations of extracting herbal medicine from the forests in Colberiahave largely degraded the environment.

Inaddition, the company’s trademark “We CARE about YOUR health”is only a fuss. First of all, the company has been producing drugs atthe expense of their employees’ health. Donna and Tom have sufferedfrom unsafe working environment. In addition, the company did nottake any action to stop the distribution of AD23 even after researchclearly portrayed that the drug was associated with heart attack. Asif nothing was happening, the company continued to market the drug,which resulted to 200 deaths.

Recommendationfor PharmaCARE Ethical Future

Unethicalpractices can have detrimental effects on a company. To be ethical,PharmaCARE can observe three things.

  • The company should ensure that it pays benefits to the traditional healers who provide them with useful information regarding traditional herbs.

  • The company should pay the locals at Colberia considerable wages so as to be able to live a descent life.

  • The company should provide good working environment for its employees at its production plant. This will ensure that they are safe and healthy.

  • In addition, the company should engage in sustainable production by ensuring that their operations do not result to damage of the environment.

Thesemeasures will improve the company’s image as well as reducefinancial losses through lawsuits.


FederalFood, Drug and Cosmetic Act, Chapter III)–Prohibited Acts andPenalties” FDA.gov 13, 2014).

Keillor,B. (2011). International business in the 21st century. SantaBarbara, CA: Praeger.

NCSL(2013 October). Marketing and Direct-to-Consumer Advertising (DTCA)of Pharmaceuticals. Retrieved June 13, 2014).

Shaw,W. 2010, BusinessEthics: A Textbook with Cases.London: Cengage Learning.