Posted: May 25th, 2022

Legal and Ethical Considerations in Marketing

Marketing, Product Safety, and Intellectual Property

Business ethics have become an increasingly essential requirement for firms, especially with the ongoing situation of globalization of the world economy. In the long run, corporate-to-corporate ethics of suitable behavior influence the achievement of businesses in a positive way, or have the power to greatly impact the behavior. As a consequence, the downfall of ethical disgrace has appeared both in Europe and in the United States of America. Important lessons can be learned from the corporate ethical downfall that vividly reveals the need and significance of business ethics (Perry-Green, 2013).

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According to dictionaries, ethics relate to those issues associated with the common nature of morals, and of the particular moral preferences to be made by an individual. Simply put, ethics are obtained from an individual’s moral values. Personal values and beliefs constitute a considerable segment of any debate concerning ethics. Ethics can be altered, shaped, and/or manipulated by an individual’s family values, social education, educational framework, religious practices, personal necessities, and professional activities. In the case of pharmacists, the major motivation for ethical conduct should be professionalism. There might be no universal standard on the code of ethics of pharmacist, but every country possesses a collection of regulations on the code of ethics or conduct for its pharmacists. Every nation’s pharmacy expert board or council has or will implement a code of ethics or conduct to protect the profession (Noordin, 2007).

Both ethical and legal considerations are feasible components in marketing, scholarly property, and product security. However, there continues to be one erratic and covert element that cannot be managed by every organization, the employee. Ethical or unethical conduct is not completely a subject of the worker’s nature; it is influenced by several factors. Workers are manipulated by the forces that surround them, their colleagues, their bosses, the payment system, company values and policies, and group norms. In this particular assignment, we shall revisit the PharmaCARE organization and how both ethical and legal considerations influenced their decision making in marketing, intellectual property of AD23, and product security.

1. 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.

There are several ethical matters associated with advertising and marketing, intellectual property, and management of product security / safety. We shall closely look at few of them and how these possess common feature which must be entailed for a company to possess a robust ethical and legal relationship.

Ethical issues in Marketing and Advertising

Each aspect of the marketing/advertising combination of a firm is subject to various laws and restrictions. Marketing directors routinely face challenges on how to deal with legal and ethical issues. As well, it is likely that each and every marketing director realizes that ‘cut-and-dry’ solutions to emerging ethical matters in the usual path of business are not easily found (Lamb, McDaniel, & Hair, 2010). A particular ethical issue related to marketing is how to be socially conscious. In the process of marketing and advertising an item to a certain group, there ought to be ethical considerations of the manner in which this will influence the individuals being targeted. Is our advertisement likely to be perceived as stereotyping? Is this actually insulting to a certain group? Is it culturally sensitive? A marketer or advertiser should answer these among other ethical issues (Lamb, McDaniel, & Hair, 2010), including: What are possible outcomes, and how wide-ranging might they extend? What is the chance of a harmful result? What is the overall nature of company responses to potential and/or ongoing ethical issues within the company? Each of these is a legal and perhaps logically expected question that should be considered in terms of social accountability in marketing and advertising (Perry-Green, 2013).

Ethical issues on intellectual property

A familiar type of intellectual property is the ‘copyright’, which applies to copying items such as movies, books, and musical songs and/or albums. To copy something and create some profit through the selling of this product is analogous to shoplifting. An individual can come up with an original work; this work inevitably has a copyright to the owner/originator. Copyright ownership refers to the specific work and definite right for the owner. Research has resulted in a list of data appropriate to retain copyright security: sound recordings and musical compositions, printed works (books, articles, musical compositions, and lecture notes), audiovisual works (movies, online videos, and television shows), computer software and videogames, dramatic works (musicals and plays), and visual works (advertisements, posters, and drawing) (Brown, 2014).

Ideas, procedures, and events are not included in copyright law. For copyright protection to be considered, both the creative and moving components ought to be fixed in a physical medium. Title(s) and names only are not subject to copyright protection. In this view, ethical matters concerning management of product security may be the best example for drug organizations. The most significant illustration is one that happened in 1938, where 107 children passed away as a consequence of providing inaccurate data. After these happenings, product security is now a compulsory obligation for organizations. Nevertheless, there has not been any significant accomplishment addressing management of product safety. In the current world, however, it is now more efficient to safeguard customer rights via management of product security (Eroglu, 1996).

Ethical Issues in the regulation of product safety

The primary ethical practice of all businesses is to make sure that they provide quality products and services while practicing social responsibility to the customer. Product security engineers are supposed to establish the safety of products, obtain agency certifications for the products, and inspect and assess the products with reference to certain standards. This is the point where a person’s, and/or company’s ethics can be put to test. As was learned earlier in the CompCARE situation, safety engineers became conscious of the problems involving the product; however, management overlooked the potential risks in favor of the large monetary compensation and corporate gains of PharmaCARE. It has been realized that we should concentrate on greater standards of product safety, for instance, not permitting the product to be produced in nations where we cannot manage the facility conditions (Perry-Green, 2013).

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

Direct-to-consumer (DTC) marketing by organizations should not be permitted. Several issues have emerged due to DTC advertisement of prescription medication. One reason for arguing against DTC is that this approach may impact the investment and/or support of certain drugs by the federal government, consumers, and insurers, without clear-cut data verifying sufficient advantages to justify the expenditures. Specifically, some observers are concerned that DTC advertisements encourage a broader use of particular drugs than their health benefit warrants. Another reason is that DTC advertisements for newly endorsed medications may result in use of these drugs in circumstances or by individuals whose possible risks were not totally known and/or considered in the drug approval process. Those worries have fueled present proposals to suspend advertisements of brand-name prescription medication to consumers during the initial two years following a drug’s approval by the Food and Drug Administration (FDA)”(Elmendorf, 2011) (Brown, 2014).

3. Parties responsible for regulating compounding pharmacies under the current regulatory scheme ‘Compounding pharmacies’ are those pharmacies where a licensed physician or pharmacist (or in case of an outsourcing facility, an individual under the direction of a licensed pharmacist), mixes, combines, or changes a particular drug’s ingredients with the goal of preparing a drug designed for the needs of a particular patient. Compounded medications are not FDA-authorized. This implies that FDA does not validate the security or efficiency of compounded medications. Both healthcare experts and consumers depend on the drug authorization procedure to guarantee that medications are efficient and created according to the Federal quality standards (The Food and Drug Administration).

Actions that either these parties or the FDA could / should have taken in this scenario

As previously learned in assignment two situations, PharmaCARE, so as to evade FDA inspection, created a completely-owned subsidiary, CompCARE, to function as a compounding pharmacy to provide the new formulation of AD23 to people on a prescription foundation. CompCARE put up a shop in a suburban office park close to the headquarters of its patients. So as to save both money and time, it carried out a rapid, low-price repair and chose Allen Jones to manage the operation’s “clean room.” Compounded drugs do not have an FDA finding of production quality prior to the marketing of such drugs. For instance, defilement of medications compounded under section 503A, or deceiving statements in the advertisement or branding of such medications, might lead to breach of the Federal law. Companies which register with FDA as outsourcing amenities under section 503B shall be controlled by FDA and scrutinized by it also in accordance to a risk-founded program. This illustration, given by the FDA is a case of how PharmaCARE escaped investigation. Even though technically the firm ought to have been scrutinized by the FDA, they did not convey the facility as outsourcing; they utilized an existing office park and carried out a repair.

Could PharmaCARE face legal exposure surrounding its practices? Support your response

Yes. This is due to the fact that PharmaCARE registered CompCARE as a compounding subsidiary. In accordance with the FDA webpage and regulations therein, outsourcing facilities which register under section 503B are managed by the FDA and ought to observe the current good manufacturing practices (CGMP) necessities; these facilities are required to be scrutinized by FDA with respect to a risk-founded program. A compounder can be an outsourcing facility under section 503B. An outsourcing facility shall be possess the ability to be eligible for exceptions from FDA authorization requirements, and needs to brand products with sufficient guidelines for utilization; this does not imply an exception from CGMP requirements. The outsourcing facilities:

Ought to observe the requirements of CGMP,

Shall be scrutinized by FDA in accordance with risk-founded programs, and must satisfy various other conditions such as reporting undesirable impacts and/or outcomes, and providing the FDA with particular and specific information concerning the products they compound.

In accordance to the news release, in case of registration of compounders with the FDA as outsourcing facilities, hospitals, including other health care providers, could offer their patients medications which were compounded in outsourcing facilities subject to federal oversight and CGMP requirements (Perry-Green, 2013)

4. 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.

A considerable issue that PharmaCARE made the most from is that the intellectual property policies in the U.S. are the predictable and transparent legal organizations that are suitable in the settling of disagreements. All organizations conducting their business actions in the U.S. have the freedom of utilizing the outstanding legal organization that is capable of assisting in the maximization of its intellectual property skill (Laczniak, Bowie, & Klein, 2005). The development in the legal systems has resulted to the promotion of the philosophy of respect following the predictability and legal organization.

Technically speaking, John’s work as a scientist in compounding AD23 was less outright ‘invention’ than modification. He and his team took the original Pharmacare AD23 drug and modified it to enhance its potential health benefits. This might be analogous to adapting a recipe for a cake, beginning with the original chocolate cake recipe, and then modifying it by specific decorations, such as nuts, whipped cream, or fruit, according to the requests of the consumer. The cake could be varied for different individuals, with one serving having almonds and another raspberries. The basic cake recipe is not significantly changed, only modified.

In this case, especially given the rising deaths from AD23, including John’s own wife, he must decide between seeking ownership of AD23 (and the concomitant liability for the deaths as the drug ‘designer’), or seeking to be a ‘whistle-blower’, with a primary goal being to halt sales of AD23 due to its obvious and increasing harm to the public. It is indeed the case that Pharmacare has profited from John’s work and vision in terms of his (and his team’s) efforts. However, John as an ethical individual must make a choice between monetary remuneration as ‘designer’, and ethical propriety in seeking to halt AD23. There is a basic incompatibility between a desire for remuneration for sales of a ‘killer drug’, and a desire to halt its sales. It would seem logical that if John’s ‘case’ is made on the basis that he wants more funds from PharmaCare, then the legitimacy of his claim, that the drug is dangerous to the public, is weakened by his desire to profit.

5. Suggest at least three (3) ways the company could compensate John for the use of his intellectual property.

Through monetary compensation.

By giving him credit he deserves.

Handing over all copyright of the invention to him

6. 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.

In 2013, with reference to the set factual foundation at the guilty plea, Soileau agreed to the allegation that he utilized a portable USB storage device to gain access the computer belonging to his previous employer at Applied Electronic Systems and Sondex that are both situated in Broussard, Louisiana, as well as companies of General Electric Oil and Gas (GE). He downloaded from the computer, more than 3,700 files having diagrams, pictures, and other data associated with the devices and equipment utilized in oilfield investigation work. Later on, Soileau presented the stolen data to his new employer at Advanced Electronic Services; they together utilized the data obtained for various tasks conducted at Advanced Electronic Services. After being interrogated by the security personnel of General Electric Oil and Gas (GE), he eventually agreed that he had taken the computer files without permission and subsequently had presented them to his employer. Federal bureau investigation (FBI) agents on the case associated Soileau with the computers utilized in theft via USB storage devices (Federal bureau of Investigations, 2013).

7. Analyze the potential issue surrounding the death of John’s wife and other potential litigants against PharmaCARE as a result of AD23.

In the course of PharmaCARE’s utilization of AD23, without consideration to fatalities that arose from the utilization of the medication, it failed to satisfy its brand assertions which states that it cares about the health of its consumers. Quite a number of deaths arose from the use of AD23, however, PharmaCARE chose to continue with its manufacture and take no consideration of its adverse impacts to the health of its customers. The drug was causing more harm than good to its consumers. This is a total violation of ethics, and the total reverse of the caring point-of-view that it sells to its consumers. Hence, PharmaCARE can be faced by several legal accusations with the inclusion of manslaughter and negligence among them.

8. 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.

During the Seoul Summit that took place in November 2010, G20 leaders classified safeguarding of whistle blowers as one of the top priority segments in their global anti-corruption agenda. Appreciating the significance of efficient whistleblower safeguarding laws and regulations, leaders, in point 7 of the G20 Anti-Corruption Action Plan, appealed to the G20 nations to lead by:

“To protect from discriminatory and retaliatory actions whistleblowers who report in good faith suspected acts of corruption, G-20 countries will enact and implement whistleblower protection rules by the end of 2012..” (Protection of Whistleblowers, 2011)

Up until now, John can present the argument that he is reporting the fraudulent and unethical affairs of PharmaCARE and CompCARE that lead to the death of more than 100 individuals.


In summary, ethical and legal considerations should be taken into serious consideration when it comes to advertisement, marketing, and product safety, because they are very important components to a firm. Firms ought to equalize the requirement of marketing a product / products ethically with legal accountability if they intend to be successful at the long run. There exist very many federal policies which influence both product safety and marketing. They can fall into several classes of regulatory actions and we ought to be well-informed if we intend to safeguard both the customer as well as the firm. PharmaCARE has not demonstrated strong ethical and legal accountability relationships in the firm. On the other hand, they have shown that they are not ethical at all since they are not implementing the plans which they have mentioned to practice. In addition, they are not concerned with product honesty. This is true since the firm recognizes the flawed character of their medication but has not undertaken any necessary steps to eradicate it from the market place and hence save the lives of patients including that of the workers who manufacture the drug (Perry-Green, 2013). The fact that PharmaCARE is informed about the deaths arising from the utilization of AD23 by suffering patients and is not taking any steps concerning the issue is quite unethical.

PharmaCARE is not all concerned with its legal accountability. This is because it was capable of evading the regulations and policies of the Food and Drug Administration (FDA) via the utilization of compounding companies; CompCARE being the case. With the new legislation that has not long ago been passed, real world PharmaCARE companies, including others, will not be presented with future opportunities to continue evading ethical responsibility without facing very rigid punishments.


Brown, K.C. (2014). Legal and Ethical Considerations in Marketing, Product Safety, and Intellectual Property. Morrisonville: Strayer University.

Elmendorf, D. (2011). Potential Effects of a Ban on Direct to-Consumer Advertising of New Prescription Drugs. Retrieved from prescription drug:

Eroglu, L. (1996). Drug research, ethic rules and regulations. Security period, pp. 1-6.

Federal bureau of Investigations. (2013, April 23). Branch Man Pleads Guilty to Theft of Intellectual Property. Retrieved from

Keeping Watch Over Direct-to-Consumer Ads. (2013). Retrieved from The Food and Drug Administration:

Laczniak, G., Bowie, N., & Klein, T. (2005). Ethical Marketing. New Jersey: Pearson Prentice Hall.

Lamb, C.W., McDaniel, C., & Hair, J.J. (2010). Marketing. Ohio: Cengage.

Noordin, M.I. (2007). Ethics in Pharmaceutical Issues. In Contemporary Issues in Bioethics (pp. 83-102). Wadsworth Publishing.

Perry-Green, L.D. (2013). Legal and ethical considerations in Marketing, Product Safety, and Intellectual Property. Morrisville: Strayer University.

G-20 Action plan (2011). Protection of Whistleblowers. Cannes.

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