Due Week 9 and worth 300 points
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 drug.
Your senior partner has asked you to write a memo outlining the following
issues for review by the senior partners.
In preparation for this assignment, use the Internet or Strayer Library to
research examples of intellectual property theft that occurred within the past
two (2) years.
Write an eight to ten (8-10) page paper in which you:
- Research three to five (3-5) 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.
- Argue for or against Direct-to-Consumer (DTC) marketing by drug companies.
Provide support for your response.
- Determine the parties responsible for regulating compounding pharmacies
under the current regulatory scheme, the actions that either these parties or
the FDA could / should have taken in this scenario, and whether PharmaCARE could
face legal exposure surrounding its practices. Support your response.
- 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.
- Summarize at least one (1) current example (within the past two  years)
of intellectual property theft, and examine the effect on that company’s
- Analyze the potential issue surrounding the death of John’s wife and other
potential litigants against PharmaCARE as a result of AD23.
- 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
- 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. Check with your professor for any additional
- 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
The specific course learning outcomes associated with this assignment
- 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
- 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 governance.
- Write clearly and concisely about law, ethics, and corporate governance
using proper writing mechanics.