Legal and Ethical Considerations in Marketing, Product Safety, and Intellectual Property - Research Paper Example

? Legal and Ethical Considerations in Marketing, Product Safety and Intellectual Property 3-5) ethical issues relating to marketing and advertising, intellectual property, and regulation of product safety PharmaCare is one of the leading and most successful pharmaceutical organizations within the global industry. The organization is considered as one of the most largest and popular organization in terms of ethical business practices and high business productivity. Several leading organizations generally face ethical issues in the business operation processes due to poor management practices and lack of sustainability in each and every business operation processes. This particular industry is quite sensitive industry. The ethical issues in the marketing and advertising, intellectual property and regulation of product safety are discussed below. Marketing and advertisement is an effective communication tool that helps an organization to communicate with the end customers regarding the introduction of new product. First of all, several pharmaceutical companies implement competitive pricing strategy and promote their drugs and several products in economic price level compromising with the quality of the products. It can actually affect the health of human beings as several side effects of these drugs can create several problems in body. Secondly, the organizations used to provide emotional adverts and wrong information about the products. It is quite unethical to provide this wrong information. Thirdly, CompCare the subsidiary of the PharmaCare used to and market specific products although the compounded materials were not supposed to sold in bulk. Wrong information about client list, quality issues of drugs and price war between the organizations can be considered as the major ethical issues in marketing and advertising. In terms of intellectual property issues, inadequate workplace environment, lack of employee motivation and unethical wage distribution are considered as the three ethical issues related to the intellectual property. It is the responsibility of the management of the organization to maintain corporate ethics in the business operation processes. Exploiting people to become employee in Colberia in low wage rate are the examples of the violation of the intellectual property (Walsh, 2013). In terms of the regulation of the products safety, the organization faces several critical issues. Providing drugs in low price level to the people of low income group without considering the quality aspect can be considered as one of the ethical issues. Inadequate quality of the pharmaceutical lab can be considered as one of the major issues in the product safety regulation. Inadequate composition in several drugs became issues for the PharmaCare. 2. Argue for or against Direct-to-Consumer (DTC) marketing by drug companies Direct-to-Consumer has considered a one of the important marketing communication tools for several healthcare or pharmaceutical organizations. This DTC marketing process is quite useful and can help the society to overcome several challenges. It is true that advertising and promotion is important for each and every organization to create awareness about the products and services in the minds of the target customers (Doern & Prince, 2012). It is true that the pharmaceutical companies provide effective solutions to several critical diseases that can take away the priceless lives of human beings. After strong research and hard work, the pharmaceutical companies succeed to make a solution to these diseases. Therefore, it is the responsibility of the governments and several public bodies to increase awareness about these drugs that can ensure good health and safety of the mankind. DTC can be considered as an effective marketing communication tools. It is true that several organizations used to follow unethical steps in order to maximize business profits. But, it is true that the society and community cannot get benefits until and unless the people within the society cannot get aware about several important drugs. It is the responsibility of the legal bodies to decide what is legally right or wrong. But, it will be not good if the government of the country take some initiative to increase the awareness about the useful drugs that can help the people to overcome injuries and diseases. The organizations within this industry need to follow corporate ethics in each and every business operation processes. In this modern era, still people are losing their lives from several critical diseases due to lack of knowledge about available medicine. It is true that promotion or advertisement has both positive and negative impacts on the society. But, it is the responsibility of entire society and government of the country to reduce the possibilities of the negative impacts and issues (Crommelin and Sindelar, 2004). DTC needs to be practiced by the organizations as it can help the mankind to stay safe with good health. 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. State Boards of Pharmacy generally regulates the compounding pharmacies under the regulatory scheme. In addition to this, Federal Legislation also plays an important role in this regulatory scheme. Compounding can be defined as the preparing, mixing, processing, assembling, packaging and labeling. The state board of pharmacy generally interferes in all these activities. On the other hand, Federal regulatory scheme is being developed by the Federal legislative department that ensures the ethics and sustainability in the business operation process by several pharmaceutical companies. Food and Drug Administration should have taken strict steps towards this particular scenario in order to maintain corporate ethics and sustainability in the business operation processes. It is important for the department to review and scrutinize the workplace and manufacturing hose of the organization. It is discussed in the scenario that the organization provide drugs compounded with illegal components. FDA supposed to review each and every aspect before the introduction of a drug into the market place. In addition to this, it is clear in the scenario that the condition of the lab was not sustainable (Griffin & O’Grady, 2008). These were the primary responsibilities of FDA in order to overcome the issues. Last but not the least; the organization’s unethical marketing and advertising practices also should be restricted by FDA in order to overcome the scenario. 4. Decide whether PharmaCARE’s use of Colberian intellectual property would be ethical in accordance with: Utilitarianism The operations of PharmaCare in Colberia are opposed to the utilitarianism theory of maximizing happiness and minimizing sufferance for the people. Many multinational corporates enter into the markets of Africa and exploit the resources in the region. The reason behind PharmaCare’s outsourcing its facilities in Colberia was to lower their operational costs by exploiting cheap labor and production resources (Weber and Wasieleski, 2013). Africa is one of the countries and it is a source for abundant cheap labor particularly from the poverty stricken regions like Colberia. In countries like Africa, the labor laws cannot be properly enforced as the country fears the threat of the big companies retracting their operations from the country which may lead to increased poverty and unemployment for the people of Colberia. The workers live in poor conditions whereas the company generates profits from the blood money of the workers. The operations of PharmaCare in Colberia violate the utilitarianism principle in that the population and ecosystem of Colberia is destroyed due to the manufacturing operations of the company. Though the opening of a drugs manufacturing facility in the poverty stricken region of Colberia can be considered as a major investment in the region to create employment opportunities and increase the standards of living of the people, in reality the workers are majorly exploited as they are unable to enforce the human rights unlike the rights conscious workers in the United States. Also, the region is not developed and enough employment opportunities are not created as compared to the actual potential of the region. The firm gains much by lowering the production costs and employing cheap local workforce, but the people continue living in poor conditions of living and poverty stricken conditions. Deontology PharmaCare is renowned for the ethical principle followed while running its business. But the company has moved away from its moral duties and commitments when it comes to dealing with the workers in its drugs manufacturing facility in Colberia. It is observed that basic workplace ethics are abandoned in the company’s operations in Colberia and the workers are poorly paid, ill- treated and works in indigenous working conditions. The poverty stricken people of Colberia are ready to work for as low as USD 1 per day which is the cheapest labor that can be sourced anywhere in the world. This also means that the workers are unethically treated with getting very less remuneration for the amount of labor that they put in the business. The company has established a laboratory in Colberia for their drugs manufacturing process which deals with hazardous chemicals and materials. Many of the workers working in these labs have been affected by these hazardous materials severely deteriorating their health conditions. The laboratory facilities of PharmaCare set up in Colberia not only affect the health of the workers but also destroy the natural resources in the region and harm the people living in the region by the use of hazardous chemicals and gases in the ecosystem of Colberia. The company is also known to gather and use the freely available cures that the local healers share with the people of the company in return of very less money or assurance of improving the living standards through work opportunities and development of the area. Virtue ethics The company is one of the largest pharmaceutical firms in the world with a number of patents under its brand. Also, PharmaCare has a reputed brand image of being a caring and conscious company implementing strong ethical policies in its business practices. But, recently, the company has faced several ethical issues with its operations in Colberia, the manufacture of its diabetes drugs, showing cultural biasedness among the workers and with maintaining poor working conditions in its laboratories. The company is criticized majorly after the establishment of a wholly owned subsidiary known as CompCare. Compcare extensively misused the conditions of the Colberia region to maximize the profits of the business without having any concern for the local people and environment. Ethics of care The maintenance of ethics of care is essential to maintain an effective balance between the profit generation and the integrity and morale of the company (Smith and Dubbink 2011). The maintenance of ethics is critical to guide the decisions of the management. PharmaCare has been criticized for earning profits at the expense of people and environment. The way the management of PharmaCare has conducted their business processes by exploiting the human resources in poor countries and by destroying the environment has damaged the ethical reputation that the company had established though years of its existence. Your own moral / ethical compass The moral compass of an individual would suggest that the activities of PharmaCare in its recent operations are completely against the normative ethics that a business should follow. A company is expected to make profits but not at the cost of the people and our environment. The exploitation of people to maximize the profits of a business is morally and ethically wrong. A company is expected to take care of its employees, the ecology and contribute the society and community instead of exploiting the natural resources and human resources for its selfish motives of profit generation. 5. Analyze the way PharmaCare uses U.S. law to protect its own intellectual property while co-opting intellectual property in Colberia. The increasingly evolving global economy has made the protection of intellectual property rights a critical area of concern for all the major corporates across the globe. The intangible assets of the pharmaceutical companies form more than 80% of the market value of the businesses with the rest 20% being represented by the tangible assets. The increasing importance of the protection of intellectual properties has become popular in the United States law as a quasi- intellectual statute for protecting intellectual property rights from infringement concerns. PharmaCare can use the newly implemented United States laws for protecting its patents and intellectual properties in its operations in Colberia, South Africa. The major classes of invention on which Intellectual property rights can be implemented are: the invention in products, processes, the composition of different matters or chemicals to form the drugs, machines as well the new usage of any of these classes (Davidson and Stevens, 2013). The United States Patent and Trademarks Office have enforced the Intellectual Property policy to encourage the protection of intellectual property domestically as well as internationally. It also aims at improving the effectiveness of the Intellectual property Rights of the Businesses of United States all across the globe. 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. PharmaCare can compensate the damages done to the environment of Colberia by employing certain activities that are responsible towards the society, environment and the community at large. The company can take effective healthcare initiatives as a part of its strategy to compensate the damages. Since, Colberia is a very poor and backward region, PharmaCare should assist the people through free healthcare facilities, distribution of medicines and educating the people on general health and wellness issues. The company can establish clinics to treat the people at low costs and start free of cost clinic trial programs. The company can also sponsor support for chronic diseases like HIV and AIDS to encourage patients to start the therapies. The company has to assume a very responsible role as these diseases are life-long diseases which require continuous medicine and treatment for the patients. Healthcare often appears to be inaccessible and expensive for the backward countries. PharmaCare should try to improve the health and well ness of the people in Colberia by providing expert assistance of doctors, build clinics and hospitals for their treatment as well as initiate a program of educating and training the local people on the basic health awareness issues. 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. The actions of PharmaCare can be compared to the incident of Berkshire Hathaway having to discontinue one of its creative techniques as it was leading to financial loss and unethical practices in the organization. The Berkshire Hathaway had implemented a new program of allowing the shareholders to allocate a portion of their dividends to different social causes. A salesperson of the company started a campaign against Berkshire Hathaway on the internet because one of the causes in which the shareholders could invest was the cause of Planned Parenthood which operated various abortion clinics. The employee strongly objected to this cause and due to the campaign started by her on the web the company had to discontinue the new program. The program though designed to employ social causes had to be stopped because of the negative effects on ethical and financial aspects of the business (Halbert and Ingulli, 2012). 8. Determine the success PharmaCare and WellCo shareholders would have in suits against the companies. The shareholders are people who have an ownership as well as interest in the business. PharmaCare, being a pharmaceutical company has an array of stakeholders primarily due to the production of life saving drugs. Therefore, the company has increased responsibility towards the shareholders. The shareholders of PharmaCare are the patients, pharmacists, doctors, the management, psychologists, nurses, the government, the employees, the general public as well as the suppliers. The possibilities of success of the shareholders of both PharmaCare and WellCo in lawsuits against the companies are high. This is because the shareholders have an important stake in the activities of the company. PharmaCare violated the laws by participating in unethical activities and neglecting the working conditions and rights of their workers. The brand reputations of the companies are badly tarnished due to the use of unethical practices in the businesses (Brenkert, 2010). The stakeholders can easily accuse the company of violating the business laws by misleading the workers in Colberia by creating the idea that the fair labor laws were not applicable to them as they were not the residents of the United States. The company can be accused for exploiting the labors and violating the human rights of the people in Colberia (Drover, Franczak, and Beltramini, 2012). 9. Determine whether or not PharmaCare lives up to its brand. Support the response. PharmaCare was considered as a well reputed company renowned for its business practices and code of conduct. Through years, the company has followed the practice of providing medical drugs for free or at a discounted price to the low income groups of people. The company also runs a foundation that sponsors educational programs on health and wellness. The company has also launched a program called “We care about your world” which is aimed to promote the commitment of the business towards the society and the environment. This program implements recycling processes, waste management, several green initiatives to sustain the environment and the society. But the activities of the company were found to be in contradiction with the rules as prescribed in the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The company has been promoting its commitment towards the environment but it has already harmed the brand reputation by breaking the environmental regulations and laws. The company has been severely criticized for destroying the environment and depleting the natural resources in Colberia. The actions of the company were considered ironical as the company showed no concern for the same place from where it continuously sourced the labor and raw materials required for the production processes. Now, the company is trying to gain the confidence of their stakeholders by initiating healthcare activities and providing the supply of medical drugs at low prices. But this does not seem sufficient to make up for the damage that the business has done to the society. Instead their sudden interest in benefiting the people and the environment is likely to draw more criticism as their actions seem oriented toward the motive of improving their corporate image and strengthening the business rather than real concern for the society. To conclude, the company has not lived up to the brand reputation. Instead it has tarnished its image in an almost non-rectifiable manner and it seems that the company will have to put in enormous efforts over a long time to recreate the positive reputation that it had in the minds of the people. 10. Recommend at least three (3) changes PharmaCARE can make to be more ethical going forward. PharmaCare must change several of its strategies and business practices in order to offset the negative effects on the company reputation. The company must abandon all the unethical practices followed in the business. The company must follow the policies and principle for the pharmaceutical companies as stated by the International Federation of Pharmaceutical Manufacturers & Associations and the Food and Drug Administration Authority (FDA). The company must start by being more responsible towards its shareholders mainly the employees. The company should take care of adhering to the labor laws and policies and immediately abandon the discriminatory practices followed within the business. It should also aim to provide proper compensation and clean and safe working conditions for the employees. The company should be responsible for its decisions and actions and should act in a manner that shows its commitment towards the well-being of its employees. PharmaCare should be more responsible towards the environment and the community at large. The company should involve in effective Corporate Social Responsibility (CSR) activities to improve the image of the brand and give back to the society. This is highly critical for the company to maintain its sustainable competitive advantage in the industry. PharmaCare should take effective steps to compensate the damages it has done to the society as well as its own position in the industry. The different CSR activities may include waste management programs, green initiatives, medical awareness camps, health benefit programs and other initiatives. References Brenkert, G. G. (2010). The limits and prospects of business ethics. Business Ethics Quarterly. Vol. 20 (4), p.703-709. Crommelin, D., & Sindelar, R. (2004). Pharmaceutical Bio-technology. New York: CRC Press. Davidson, B. I., & Stevens, D. E. (2013). Can a code of ethics improve manager behavior and investor confidence? An experimental study. Accounting Review. Vol.88 (1), p. 51-74. Doern, G., & Prince, M. (2012). Governing Bio-Realms. Toronto: University of Toronto Press. Drover, W., Franczak, J., & Beltramini, R. (2012). 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