Subject: Law / Business Law
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
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
In preparation for this assignment, use the Internet or Strayer Library to research examples of
intellectual property theft that occurred within the past three (3) years. Write a six to eight (6-8) page paper in which you:
1. Research three to five (3-5) ethical issues in the scenario relating to marketing and advertising,
intellectual property, and regulation of product safety and examine the extent to which PharmaCARE
violated these issues. Be sure to identify the law and then the extent of the violations.
2 Argue for or against Direct-to-Consumer (DTC) marketing by drug companies. Provide support for your
response. 3. 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.
4. Summarize at least one (1) current example (within the past three (3) years) of intellectual property
theft, and examine the effect on that company’s brand.
5. Analyze the potential product liability issues surrounding the death of John’s wife and other potential
litigants against PharmaCARE as a result of AD23.
6. Specify 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.
7. 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. 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. 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.