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Title: For Cathya... Assignment 3: Legal and Ethical Considerations in Marketing, Product Safety, and Intellectual

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PharmaCARE (We CARE about YOUR health®) is one of the world’s most successful pharmaceutical 

companies, enjoying a reputation as a caring, ethical and well-run company that produced high-quality 

products that saved millions of lives and enhanced the quality of life for millions of others. The company 

offers free and discounted drugs to low-income consumers, has a foundation that sponsors healthcare 

educational programs and scholarships, and its CEO serves on the PhRMA board. PharmaCARE 

recently launched a new initiative, We CARE about YOUR world®, pledging its commitment to the 

environment through recycling, packaging changes and other green initiatives, despite the fact that the 

company’s lobbying efforts and PAC have successfully defeated environmental laws and regulations, 

including extension of the Superfund tax, which was created by Comprehensive Environmental 

Response, Compensation, and Liability Act (CERCLA). 

Based in New Jersey, PharmaCARE maintains a large manufacturing facility in the African nation of 

Colberia, where the company has found several “healers” eager to freely share information about 

indigenous cures and an abundance of Colberians willing to work for $1.00 a day, harvesting plants by 

walking five (5) miles into and out of the jungle carrying baskets that, when full, weigh up to fifty (50)

pounds. Due to the low standard of living in Colberia, much of the population lives in primitive huts with no 

electricity or running water. PharmaCARE’s executives, however, live in a luxury compound, complete 

with a swimming pool, tennis courts, and a golf course. PharmaCARE’s extensive activities in Colberia 

have destroyed habitat and endangered native species. 

Two (2) years ago, after PharmaCARE’s research indicated that one of its top-selling diabetes drugs 

might slow the progression of Alzheimer’s disease, its pharmacists began reformulating that drug to 

maximize the effect. In order to avoid 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 set up shop in a suburban office park near its parent’s headquarters, 

and to conserve money and time, did a quick, low-cost renovation and designated Allen Jones to run the 

operation’s “clean room.” 

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 VA patients. Seeing the opportunity to realize even more 

profit, CompCARE began advertising its services and the availability of AD23 to consumers and 

marketing the drug directly to hospitals, clinics, and physician offices, even though compounding 

pharmacies are not supposed to sell drugs in bulk for general use. To get around this technicality, 

CompCARE encouraged doctors to fax in lists of bogus patient names. 

As production increased and hours were extended, one of Allen’s techs pointed out what appeared to be 

mold around the air vents. Allen immediately contacted the facilities’ supervisor, who came over to 

inspect the lab. As time went on, workers began coughing, sneezing, and getting headaches at work, and 

one employee, Donna, who had a perfect attendance record, got so sick she could no longer come to 

work due to chronic bronchial problems. Eventually, she filed for worker’s compensation. Allen’s best 

supervisor, Tom, threatened to complain to OSHA about the air quality in the lab, and one of the techs, 

Ayesha, filed an EEOC complaint alleging she had not been promoted to supervisor because she was a 

Muslim; in fact, although Ayesha was a very good worker, Allen did not believe she had the management 

or people skills necessary to be a good supervisor. Allen discussed these issues with his boss, the 

Director of Operations, who told Allen that if he wants to keep his job and receive his promised bonus, he 

needs to fire Donna, Tom, and Ayesha, and keep his own mouth shut about the mold and the bogus 


As CompCARE and its parent company enjoyed record profits and PharmaCARE’s stock price 

approached $300 per share, reports started filtering in 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 paid huge bonuses to all the executives and managers, including Allen, who, after being 

named “Employee of the Year,” was beginning to miss production schedules due not only to his staff’s 

increasing use of sick leave, but also his own health issues. 

PharmaCARE sold CompCARE to WellCo, a large drugstore chain, just weeks before AD23 was publicly 

linked to over 200 cardiac deaths. Both PharmaCARE and WellCo saw their stock price plummet.

Review the PharmaCARE/CompCARE scenario in Assignment 2 to complete this assignment.

Write a ten to twelve (10-12) 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.

2. Argue for or against Direct-to-Consumer (DTC) marketing by drug companies.

3. Determine who regulates compounding pharmacies under the current regulatory scheme, what 

the Food and Drug Administration (FDA) could / should have done in this scenario, and whether 

the FDA should be granted more power over compounding pharmacies.

4. Decide whether PharmaCARE’s use of Colberian intellectual property would be ethical in 

accordance with: 

a. Utilitarianism

b. Deontology

c. Virtue ethics

d. Ethics of care

e. Your own moral / ethical compass

5. Analyze the way PharmaCARE uses U.S. law to protect its own intellectual property while coopting intellectual property in Colberia.

6. Suggest at least three (3) ways the company could compensate the people and nation of Colberia 

for the use of its intellectual property and the damage to its environment. 

7. Compare PharmaCARE’s actions with those of at least one (1) real-world company whose 

creativity in skirting legal technicalities led to ethical lapses and financial loss. 

8. Determine the success PharmaCARE and WellCo shareholders would have in suits against the 


9. Determine whether or not PharmaCARE lives up to its brand. Support the response. 

10. Recommend at least three (3) changes PharmaCARE can make to be more ethical going 


11. Use at least three (3) quality resources in this assignment. Note: Wikipedia is not an acceptable 

reference and proprietary Websites do not qualify as academic resources. 

our 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.

The specific course learning outcomes associated with this assignment are:

• Analyze and assess legal and ethical restraints on marketing and advertising, relative to both 

consumers and organizations.

• Analyze and evaluate laws and regulations relative to product safety and liability.

• Explore copyright laws and intellectual property rights and assess how well they balance 

competing interests.

• Use technology and information resources to research issues in law, ethics, and corporate 


• Write clearly and concisely about law, ethics, and corporate governance using proper writing 



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