Assignment 4: Legal and Ethical Considerations in Marketing, Product Safety, and Intellectual Property

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 cardiac deaths.

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:

1. 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.
2. Argue for or against Direct-to-Consumer (DTC) marketing by drug companies. Provide support for your response.
3. 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.
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. Suggest at least three (3) ways the company could compensate John for the use of his intellectual property.
5. 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.
6. Analyze the potential issue surrounding the death of John’s wife and other potential litigants against PharmaCARE as a result of AD23.
7. 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.
8. 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 instructions.
• 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.

The specific course learning outcomes associated with this assignment are:

• 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 liability.
• 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

Final Case Analysis Paper

The Final Case Analysis Paper should demonstrate understanding of the reading as well as the implications of new knowledge.  The eight-page paper should integrate readings and class discussions into work and life experiences.  It may include explanation and examples from previous experiences as well as implications for future applications.

The purpose of the Final Case Analysis Paper is for you to culminate the learning achieved in the course by describing your understanding and application of knowledge in the field.

Focus of the Final Case Analysis Paper

The Final Case Analysis Paper should focus on real life, real time application of topics covered in this course; the uses you have seen and the uses you can envision.  The paper must be submitted to your instructor no later than 11:59 pm of the time zone in which you reside on the last day of class.

Read Mattel and Toy Safety, which is Case Eight in the Cases in Business and Society section at the end of the book. This case describes the 2007 Mattel toy recalls, which were in response to findings that several children’s toys were coated in lead-based paint.

Write an eight to ten page paper that addresses the following questions. Support your opinions with scholarly research.

Do you believe that Mattel acted in a socially responsible and ethical manner with regard to the safety of its toys? Why or why not? What should or could Mattel have done differently, if anything? Be sure to support your answer using your research findings.Who or what do you believe was responsible for the fact that children were exposed to potentially dangerous toys? Why do you think so? Be sure to support your answer using your research findings.What is the best way to ensure the safety of children’s toys? In responding, please consider how the following groups would answer this question: government regulators (in the U.S. and China); consumer advocates, the toy industry, children’s product retailers; and standard-setting organizations. What might explain the differences in their point of view? Be sure to support your answer using your research findings.What do you think is the best way for society to protect children from harmful toys? Specifically, what are the appropriate roles for various stakeholders in this process? Be sure to support your answer using your research findings.
Writing the Final Case Analysis Paper 
The Final Case Analysis Paper:Must be eight double-spaced pages in length (excluding the title page, reference page, exhibits, etc.) and formatted according to APA style as outlined in your approved APA style guide. Must include a cover page:Title of paperStudent’s nameCourse name and numberDate submittedMust include an introductory paragraph with a clearly stated thesis or topic.Must address the topic of the paper with critical thought.  That is, what is your response to the content, either positive or negative, and then defend your position.  If multiple options/alternatives/positions are present and are being rejected you must also defend the reasons for rejecting an option.Must conclude with a restatement of the thesis or topic and a closing paragraph that summarizes the main point or points of your paper.Must use APA style as outlined in your approved APA style guide to document all sources.Must include, on the final page, a Reference List that is completed according to APA style as outlined in your approved APA style guide.

Select one of the following tools: the nine steps in Ackerman and Anderson’s roadmap for change, Cummings and Worley’s five dimensions of leading and managing change, or the three components of organizational change.  Explain how a leader could use this tool in guiding an organizational change.  Review several of your peers’ posts.  Respond to two peers who did not choose the same tool as you.  Discuss the similarities and differences between the tools.

Your initial post should be at least 200 words in length.  Support your claims with examples from required material(s) and/or other scholarly resources, and properly cite any references. Respond to at least two of your classmates’ posts by Day 7.

   Other MGT 435 Assignments and Discussions

–MGT 435 Ashford 2: – Week 1 – Discussion 1

–MGT 435 Ashford 2: – Week 1 – Discussion 2

-MGT 435 Ashford 3: – Week 2 – Discussion 1

–MGT435 Ashford 3: – Week 2 – Discussion 2

-MGT435 Ashford 4: – Week 3 – Discussion 2

–MGT435 Ashford 4: – Week 3 – Assignment

–MGT435 Ashford 4: – Week4 – Discussion 1

–MGT435 Ashford 4: – Week4 – Discussion 2

–MGT435 Ashford 6: – Week 5 – Discussion 1

–MGT 435 Ashford 6: – Week 5 – Discussion 2

–MGT435 Ashford 6: – Week 5 – Final Paper

United Screen Printers (USP) produces a wide range of decals for displaying promotional messages on fleet vehicles, including delivery vans, eighteen-wheelers, and aircraft.  Its decals range from flat-color designs to full-color photographic reproductions.

Although it is one of the oldest forms of printing, screen printing is superior to most of the more modern approaches because it permits making heavier deposits of ink onto a surface, resulting in more vibrant and longer lasting finishes.  Screen printing works by blocking out areas on a silk screen so that ink passes through only the unblocked areas to make an impression on the vinyl decal.

Many in the industry believe that the economics of fleet graphics makes them an extremely attractive form of advertising and should lead to their continued penetration of a largely untapped market.  One industry source estimated that the cost of fleet graphics works out to be $2.84 per 1,000,000 visual impressions. 

Given the highly cost effective nature of using fleet graphics as a form of advertising, it is speculated that organizations will increasingly exploit this form of advertising.  In addition, as organizations become better aware of this advertising medium, it is likely they will want to change their message more frequently.  According to managers as USP, this may be on the of the major factors that is apparently driving the competition to focus more on short lead-times and prices, and less on decal durability.

USP is about to begin its annual evaluation of proposed projects.  Six projects have been proposed as described below.  USP currently has annual sales of approximately $7 million.  It typically allocated up to 10% of sales to these types of projects.

1. Purchase new large press.  There is currently a three-and-a-half to four-week backlog in the screen printing department.  The result of this is that USP’s total lead-time is 4 to 6 weeks in comparison to an industry average lead-time of 3.5 to 4 weeks.  In a typical month, USP ships 13% of its orders early, 38% on time, and 49% late.  It has been estimated that 75% of the backlog is waiting for press 6, the largest press in the shop.  Furthermore, press 6 is in dire need of replacement parts but USP has been unable thus far to locate a source for these parts.  Given the problem of finding replacement parts and the fact that the press is somewhat outdated, this proposal calls for purchasing a new large press for $160,000.  Based on estimates that a new large press could process jobs 50-100% faster than press 6, it is calculated that the payback period for the new large press would be one year.
2. Build new headquarters.  USP’s CEO fervently believes that the company needs to have a strong corporate identity.  He therefore purchased land and had plans drawn up for the construction of a new corporate headquarters.  Analysis of the new headquarters indicated that although it would improve operating efficiencies, the savings generated would not pay for the new building (estimated to cost $4 million).  Many of the board members viewed the project as too risky since it would increase the company’s debt as a percent of capital from almost 0 to 50%.
3. Pursue ISO 9000 certification.  This proposal also comes from USP’s CEO.  ISO 9000 is a set of standards that provides customers with some assurance that a supplier follows accepted business practices.  In some industries, obtaining ISO 9000 certification is essential, such as industries that export to Europe and the domestic automobile industry.  It was less clear what competitive advantage pursuing ISO 9000 would provide USP at this time.  On the other hand, the process along would help it document and perhaps improve its processes.  The cost of this initiative was estimated to be $250,000-$300,000 and would take one year to complete.
4. Develop formal procedure for mixing inks.  This proposal comes from USP’s plant manager.  At present, mixing inks is a highly specialized skill that consumes 2-3 hours of the team leader’s time each day.  This project would focus on developing ink formulas to make the task of mixing inks more routine, and less specialized and subjective.  The team leader is paid $25,000 annually.  The cost of pursing this project is estimated to be $10,000.
5. Purchase and install equipment to produce four-color positives in-house.  The lead-time to have positives made by an outside supplier is typically one week and costs $1,500-$6,000.  According to this proposal, the cost of purchasing the equipment to produce four-color positives in-house would be approximately $150,000 plus $25,000 for installation and training.  The variable costs of producing positives in-house are estimated to be $375 per job.  If produced in-house, the lead-time for the four-color positives would be approximately an hour-and-a-half.
6. Purchase inkjet printers.  An alternative to purchasing a new screen printing press is to add capacity based on newer technology.  Given the inkjet’s production rate, 6 inkjet printers at a cost of $140,000 would be needed to provide the equivalent capacity of a new large screen printing press.  The major disadvantage of the inkjet printers is that compared to the screen printing process, the outdoor durability is more limited.  In general, inkjet printers are more economical for small orders, while screen printing presses are more economical for large orders.