Ethical Issues Facing PharmaCare


Ethics in business acts as a baseline through which enterprises operate, and they define the right course of action to take when dealing with a certain situation. One of the ethical issues that present in most businesses is false advertisements, which is meant to mislead customers (Donohue, Cevasco, & Rosenthal, 2007). The mentioned ethical issue falls under the purview of marketing and advertising ethics. Inasmuch as advertisements are promotional strategies, sometimes businesses abuse such by giving false information regarding their products. Most businesses ignore the concept of corporate philanthropy by disregarding the interests of their customers and overemphasizing profit maximization. In the case of PharmaCare, a false advertisement regarding the ability of AD23 to cure diabetes and reduce the severity of Alzheimer disease was publicized to boost the sales of the drug. However, the adverts remained silent on the side effects of the medication even though the selling company knew that the drug was a leading cause of cardiac complications among its users.

Ethical issues also arise due to failure by businesses to observe and respect intellectual rights. In most cases, disputes emerging from intellectual rights revolve around plagiarism coupled with copyright infringement among others. Copyright infringement refers to the wrongful acquisition and use of work protected by copyright law without the consent of the rightful owner (Bently & Sherman, 2014). PharmaCare violated the mentioned ethical provisions by acquiring and selling a drug that John and his originally invented. The company did not obtain consent from the inventors of the medicine. On the contrary, it assumed full ownership rights.

Other ethical issues that are evident in the business environment revolve around regulation and product safety. Numerous legislations and regulatory bodies ensure that products from various firms are safe for human consumption. Most firms avoid such reviews via fraudulent means. In the case of PharmaCare, the firm established a new company by the name CompCare to avoid the scrutiny procedures from the Food and Drug Administration.

Direct-to-Consumer (DTC) marketing by drug companies

Most drug companies have formulated different strategies for the creation of awareness of their products to the public. In the past few decades, the abuse of medicinal drugs has been on the rise owing to under-regulation by the concerned bodies. The dilemma of drug marketing by various companies cannot be narrowed to a specific option. This assertion holds because DTC increases awareness of drugs to patients, thus eliminating the need to seek medical advice from doctors after recognizing that some sicknesses are curable using locally available drugs. Direct marketing refers to “promoting a product or service straight from the seller to the consumer, without intermediary advertising such as television commercials, radio ads, or public displays” (Frosch, Krueger, Hornik, Cronholm, & Barg, 2007, p. 9). However, DTC can create awareness to the wrong people who normally give themselves unreasonable prescriptions without the doctors’ advice. Moreover, some people find a way to abuse drugs, which is unethical and unacceptable in most countries.

Therefore, in my opinion, DTC is not an effective method of drug marketing, as it does not promote the health of the public. It leads to abuse of drugs thus increasing the cost of health. DTC is an intruder to the relationships that exists between patients and health professionals. This aspect leads to undue pressure on the practitioners to give particular prescriptions, which may be expensive, dangerous, or ineffective.

I hold that DTC is an ineffective method of creating awareness to patients because it leaves behind valuable information about the drugs, and thus it is misleading. Any attempt to back DTC should ensure that information regarding the right dosage and the side effects of the drug is disclosed to the prospective customers. Most drug advertisers tend to ignore information that may not convince patients to buy the drugs and exaggerate the positive qualities. A campaign on DTC should first be enacted and approved by the FDA. This move would ensure that any strategy adopted for drug marketing by the companies would not allow the display of imagery and non-educational promotions and adverts.

Parties responsible for regulating compounding pharmacies

Compounding pharmacies are medical firms that are authorized to amalgam chemical elements into a final drug ready to be consumed by human subjects based on a prescription given by a medical expert or a legally approved prescriber (Outterson, 2012). The FDA is the primary regulatory body that regulates the production of medical substances in the US. However, individual states regulate the production of medical drugs in their respective areas of jurisdiction. In that regard, each state has legislations that govern such manufacture coupled with outlining the standards for the drugs to be produced in the state in question. The existence of varying laws in different states limits the ability of the FDA to regulate drug production and consumption. Besides, the issue of enforcement arises due to the controversy as to which agency, whether state or federal, should take responsibility when violations or omissions occur. In the case discussed in this paper, PharmaCARE avoided inspection by the regulatory bodies by creating a subsidiary that would produce and sell the controversial medicine. I believe that the FDA has a balanced relationship with the states, which gives them control over what goes on within their jurisdictions. If CompCare were not created, I believe that the FDA would have stepped in and ordered the company to discontinue until the drugs being compound were verified and approved.

Legal suit against the company

In my opinion, the actions by PharmaCARE and WellCO were illegal, and a suit against the latter would favor the plaintiff. Some of the facts that would lead to the success of a case against the company include actions of fraudulent activities, plummeted stock, fake names of patients from doctors, harm caused to patients, and wrongfully bypassing the FDA’s regulations.

How PharmaCARE used the US law to protect its intellectual property

One of the ways in which the mentioned company protected intellectual property was through the acquisition of patents. Patents give exclusive rights to one’s invention, thus barring another person from producing, using, importing, or selling the invention within the specified period. A plant or human cell cannot be patented. However, the discoverer may obtain a patent on a biological matter in a purified, isolated, or changed form. Western pharmaceutical companies that isolate an active chemical in a plant and create a genetically engineered plant or animal can receive a patent. On the other side, indigenous peoples, who use the natural form of the plant, cannot secure such patents (Bently & Sherman, 2014). The company ensured that it had registered its trademark according to the United States’ intellectual law. Besides, all its innovations were registered according to the provisions of the intellectual laws in the United States, while co-opting intellectual property in Colberia.

Three ways the company could compensate John for the use of his intellectual property

Both the employer and employee jointly own patent rights of inventions acquired in the course of employment. Therefore, the employee is entitled to compensation from the employer in case the latter adopts the invention. In the PharmaCARE case, John is entitled to compensation that would be determined based on the profitability of the invention. The compensation to John would take the form of

  • A lump sum monetary compensation
  • Increased salary and enhanced working conditions
  • Fridge benefits and post-employment benefits

Current example of intellectual property theft

The most recent case involving patency is between Microsoft and Changhong. Microsoft is accusing Changhong of using its product keys wrongfully without obtaining consent from the aggrieved party. The case of these stolen product keys has negative impacts on the brand name and image. With the free product keys available, companies that have opted to use the product with these keys do not have access to all the upgrades, which can have a direct impact on the user experience. Therefore, with the product keys been stolen, there has been negative effects on the brand. Besides, the negative experience from users due to such stolen product keys can lead to the loss of customers and revenue.

Potential issue surrounding the death of John’s wife and other victims

The law requires medical officers to act in the best interest of patients and provide quality care to all without discrimination. Besides, the medical code of ethics, through the principle of beneficence, requires medical practitioners to act in a manner that maximizes the patients’ health coupled with minimizing harm (Schwam, 2011). The drug sold by PharmaCARE was linked to cardiac complications, and it led to deaths among users. John and other affected individuals would file a legal suit against the company requiring compensation from the company for the loss suffered. The court would determine the damages to be paid to each victim. John and his accomplices also have the option to file a case against the company based on negligence since the subsidiary company was informed that the drug was the main cause of heart disease, but it ignored the report. The company had an ethical duty to minimize the patient’s harm, but it did not attempt to comply with that provision.

Major arguments that John can make to claim that he is a whistleblower

To proof that he is a whistleblower, John may argue that he was only working under the instructions of the employer, who directed that they carry out research to unravel the medicinal quality of AD23. Additionally, the company only relied on the preliminary reports submitted by the researching team and never initiated research to determine the side effects of the drug. Therefore, John could rely on the view that the company never allowed him to conduct further research on the side effects of the drug before introducing it to the market. If the company allowed further research, perhaps John could have unearthed the side effects of the drug, thus preventing the deaths. Lastly, John could argue that he informed the company that the drug was not fit for human consumption since it was associated with cardiac illnesses. He can rely on the memo that he presented to the company warning it to stop selling the drug to patients due to the imminent danger that it posed.

Protections available for John

The Occupational Safety and Health Act (OSH Act) protect workers against retaliation for complaining to different entities about diverse issues in the workplace (Stanberry, 2006). The Act protects employees from retaliation by employers owing to their disclosure of issues arising in the workplace. John has the right to continue enjoying any post-employment benefits as per the agreement between him and the company prior to his retirement.


Bently, L., & Sherman, B. (2014). Intellectual property law. Oxford, UK: Oxford University Press.

Donohue, M., Cevasco, M., & Rosenthal, B. (2007). A decade of direct-to-consumer advertising of prescription drugs. New England Journal of Medicine, 357(7), 673-681.

Frosch, L., Krueger, M., Hornik, C., Cronholm, F., & Barg, K. (2007). Creating demand for prescription drugs: a content analysis of television direct-to-consumer advertising. The Annals of Family Medicine, 5(1), 6-13.

Outterson, K. (2012). Regulating compounding pharmacies after NECC. New England Journal of Medicine, 367(21), 1969-1972.

Schwam, E. (2011). Severe accidental overdose of 4-aminopyridine due to a compounding pharmacy error. The Journal of Emergency Medicine, 41(1), 51-54.

Stanberry, B. (2006). Legal and ethical aspects of telemedicine. Journal of Telemedicine and Telecare, 12(4), 166-175.