Assignment 4: Legal and Ethical Considerations in Marketing, Product Safety, and
Intellectual Property
You are a new associate at the law firm of Dewey, Chetum, and Howe. John, a former researcher
at PharmaCARE, comes to your office. He has concerns about PharmaCARE’s use of AD23, one
of the company’s top-selling diabetes drugs. Two (2) years ago, after PharmaCARE’s research
indicated that AD23 might also slow the progression of Alzheimer’s disease, John and his team
of pharmacists began reformulating the drug to maximize that effect. In order to avoid the Food
and Drug Administration’s (FDA) scrutiny, PharmaCARE established a wholly-owned
subsidiary, CompCARE, to operate as a compounding pharmacy to sell the new formulation to
individuals on a prescription basis. CompCARE established itself in a suburban office park near
its parent’s headquarters. To conserve money and time, CompCARE did a quick, low-cost
renovation.
CompCARE benefited from PharmaCARE’s reputation, databases, networks, and sales and
marketing expertise, and within six (6) months had the medical community buzzing about AD23.
Demand soared, particularly among Medicare, Medicaid, and Veterans Affairs patients. Seeing
the opportunity to realize even more profit, CompCARE began advertising AD23 directly to
consumers and marketing the drug directly to hospitals, clinics, and physician offices, even
though compounding pharmacies are not permitted to sell drugs in bulk for general use. To
circumvent this technicality, CompCARE encouraged doctors to fax lists of fictitious patient
names to CompCARE. PharmaCARE sold CompCARE to WellCo, a large drugstore chain, just
weeks before AD23 was publicly linked to over 200 cardiac deaths.
As CompCARE and its new parent company enjoyed record profits and PharmaCARE’s stock
price approached $300 per share, reports started surfacing that people who received AD23
seemed to be suffering heart attacks at an alarming rate. The company ignored this data and
continued filling large orders and paying huge bonuses to all the executives and managers,
including John, whose wife recently died from a heart attack after using AD23.
John has come to you with an internal company memo describing the potential problems with
AD23, and information describing the company’s willingness “roll the dice” and continue to
market the drug.
Your senior partner has asked you to write a memo outlining the following issues for review by
the senior partners.
In preparation for this assignment, use the Internet to research examples of intellectual property
theft that occurred within the past two (2) years.
Write a ten (10) page paper in which you:
1. Research three to five (3-5) ethical issues relating to marketing and advertising,
intellectual property, and regulation of product safety and examine whether PharmaCARE
violated any of the issues in question.
2.
Argue for or against Direct-to-Consumer (DTC) marketing by drug companies. Provide
support for your response. 3. 4.
5.
6.
7.
8. Determine the parties responsible for regulating compounding pharmacies under the
current regulatory scheme, the actions that either these parties or the FDA could / should have
taken in this scenario, and whether PharmaCARE could face legal exposure surrounding its
practices. Support your response.
Analyze the manner in which PharmaCARE used U.S. law to protect its own intellectual
property and if John has any claim to being the true “inventor” of AD23. Suggest at least three
(3) ways the company could compensate John for the use of his intellectual property.
Summarize at least one (1) current example (within the past two [2] years) of intellectual
property theft, and examine the effect on that company’s brand.
Analyze the potential issue surrounding the death of John’s wife and other potential
litigants against PharmaCARE as a result of AD23.
Specify both the major arguments that John can make to claim that he is a whistleblower
and the type of protections that he should be afforded. Justify your response.
Use at least (5) quality resources in this assignment. Note: Wikipedia is not an acceptable
reference and proprietary Websites do not qualify as academic resources.
Your assignment must follow these formatting requirements: Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins
on all sides; citations and references must follow APA or school-specific format. Check with
your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the
professor’s name, the course title, and the date. The cover page and the reference page are not
included in the required assignment page length. .

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