Role of the FDA with prescription drugs

Pharmacy Ethics


The author of this report has been asked to review the legal and ethical considerations in play given the test case scenario surrounding Pharmacare and Compcare. As is quickly apparent while reading the case study, the company engaged in a long and extensive list of ethical and/or legal violations as a means to maximize profit and minimize the legal and other red tape that seems to bother them even though it is there for a very good reason. The ethical issues involved will be touched upon and analyzed. There will also be an exploration and analysis of direct-to-consumer marketing of drugs, whether John is the “investor” of AD23, the arguments about John being a whistleblower and the associated protections he would have if he is and examples of intellectual property theft that have occurred in the last two years or so. While bad things do incidentally happen and crop up when it comes to drugs marketed to the public, there is a clear line between events like this that are incidental and ones that are improper or even criminal in nature.



As noted in the introduction, there are a number of legal and ethical issues that abound in the case study. One of the first is the way in which Pharmacare created the wholly owned subsidiary Compcare as a means to bypass scrutiny from the Food and Drug Administration. These barriers and milestones are in place for a reason and Pharmacare is unethical at least and lawless at worst for using a shell company to do their dirty work. However, that part of the overall process with AD23 was just the first way in which they used a secondary company to benefit financially and legally. Indeed, it would be promising and worth exploring whether AD23 could be used to slow down the progress of Alzheimer’s. However, the aggressive and entirely too quick way in which Pharmacare reformulated AD23 in a way to maximize the perceived benefits of using AD23 for Alzheimer’s led to a rather large number of cardiac issues with patients. Indeed, several hundred people seemingly died as a result of taking the reformulated version of AD23. If the drug reformulation had gone through the proper trials and tests, these cardiac issues almost surely would have been caught before the drug was fully deployed to the marketplace. This is not to say that Pharmacare would escape liability for any cardiac deaths if the drug was approved. However, the way in which they instead went when it came to getting the drug onto the market and the ensuing deaths that happened as a result are going to put Pharmacare into a rather large legal stink even if they cut ties with the company before the legal storm hit. Indeed, the process whereby Compcare skirted the law and got a bad drug (or at least a bad version of the drug) on the market happened while it was owned by Pharmacare. The two prior-related companies also skirted the law when it came to the ban on compounding pharmacies selling in bulk for general use. Indeed, that is not what compounding pharmacies are supposed to be doing as a matter of law but Pharmacare/Compcare pushed forward so as to maximize revenue. To be honest, they were trying to have their cake and eat it too in that they used the different rules for compounding pharmacies to get the drug to market but then they sold it in bulk after getting it ready in violation of what is allowed for in the drug marketplace (Lipworth, Kerridge & Day, 2013).


Perhaps the biggest ethical and legal problem, however, came after the splitting off of Compcare. There were signs just a few weeks after the shift to the new parent that the drug was probably not safe due to the cardiac events that started to arise. Rather than slam the brakes and do a recall or at least slow down the marketing of the reformulated AD23 drug, the company just carried on and continued to sell the drug anyway. This eventually led to John, one of the people that was pivotal in reformulating the drug in the first place, to become a bit of a whistleblower and suggest that things needed to change. It is interesting that John did not seem to say anything until after his wife died after taking the drug. On the other hand, he surely would have told her to not take the drug if he knew about problems ahead of time. In that way, the company is clearly doing the wrong thing while John is trying to do the right thing. The corporate decision-makers, both before and after the split, that circumvented the law all need to be brought to the proper ethical and legal authorities, up to and including criminal charges for those that kept pushing the drug despite the dubious and illegal way in which the drug was developed and sold and the way in which it was sold even more even after it was known that there were safety issues with the drug. Indeed, John’s wife was taking the drug for diabetes, not Alzheimer’s. As such, there seems like there might be a problem with AD23 in any formulation or dosage. As such, any variations or versions of the drug need to be analyzed and pulled from the market if they are indeed not safe (Lipworth, Kerridge & Day, 2013).


One last ethical issue that is perhaps not as obvious in terms but should still be mentioned is that which pertains to paying bonuses for prescription drugs and the amount in which they are sold. To use a better example than AD23, one could point to a drug like Oxycontin. When one looks at the practice of paying people more and more as more and more of the drug is sold, it is a bit unseemly and almost certainly ethically dubious. This is true given that opiate-derived prescription drugs are potentially very addicting and this often ensnares people that are taking the drugs for entirely valid reasons such as back problem and war injuries. Even if the gravity of prescribing a diabetes drug is a little less, the same principle applies. If the drug was developed and marketed in the right and legal ways and the same outcomes (minus the deaths) happened, that would be fine, in the grand scheme of things. However, the company was skirting legal and ethical rules from the word “go” and it would seem the primary and only priority that Pharmacare had was to push the drug as hard as possible to as to enrich themselves and to hell with the consequences that ensue (Das, 2012).


When it comes to direct-to-consumer drug marketing, it is hard to give a definitive answer. However, given the totality of the implications and details involved, it would probably be wise to dial back or even ban the practice from a legal standpoint. At the very least, there are some types of drugs and such where there should be pause before pervasive marketing is allowed. Indeed, having consumers deciding their own fate when it comes to most purchases of life is not a big deal and is accepted to be the norm. However, when one is talking about anti-depressants or drugs for any sort of chronic condition such as diabetes, there should be some different rules. Just as one example, real-life experience tells us that the first-line drug for diabetes has been Metformin and this will likely not change for a while. Regardless, the patient will usually never know as much as a doctor or other trained medical person will know about what drugs are best, which ones should be avoided and why. Beyond that, a lot of the brand name drugs (especially those with a patent still in force, thus precluding a generic) are extremely expensive and there are often drugs that work just fine and are much cheaper. To be sure, there are already situations where drug companies are either limiting themselves or the tenets of corporate social responsibility are taking root. Indeed, one would be hard-pressed to give an example of any drug in the opiate (e.g. Vicodin) or benzodiazepine (e.g. Xanax) being advertised on any sort of widespread basis. Even further, the author of this report does not recall ever seeing ads for either one of those types of drugs. Drugs relating to diabetes and depression, on the other hand, are pervasive. Tresiba, Abilify and a few others are just one example of this. In general, the author of this report would say that while free markets and consumer choice should rule the day, both of those should be tied to informed consent based on timely and proper advice from a physician and not in response to an ad spiel on television. This is not to say that doctors and medical professionals in general are not in the practice of pushing drugs based on pressure from pharmaceutical sales representatives. This is proven in the case study for this report when looking at the practice of getting fictitious names from doctors so as to pad the prescriptions that are being filled. However, that is a regulatory issue for the FDA if it comes to that and not all doctors give into that pressure. Indeed, many doctors aim to give the best advice and the best drugs based on the situations and health issues as they exist rather than what is most profitable for the drug companies or the doctor’s office or location in question (Das, 2012).


As for what the FDA could have or should have done, it is interesting and a bit concerning that Compcare, at Pharmacare’s direction, would be able to use a compounding pharmacy to get a drug to market and then sell the drug in bulk in clear violation of the law and the normal approval process when it comes to drugs. To be sure, there is a time and a place for compounding pharmacies as the formulations and dosages that come “off the shelf” are not always perfect or proper for all situations. For a one-off type of prescription that is not available in an easy to find way, that is the perfect situation for a compounding pharmacy. However, it is infinitely concerning that Compcare was able to do what it did without the FDA or some other regulatory agency stepping in and putting the kibosh on the drug being sold in a widespread way. It should have sent up huge red flags to see such mass amounts of the drug flood the market even though the drug did not go through the FDA approval process that would be the norm had the drug been pushed through the system (the proper way) by Pharmacare. Put another way, there is no acceptable explanation that the author of this report could accept that would satiate the hunger to find an answer as to why it took 200+ cardiac deaths and/or a whistleblower to get the FDA’s or any other regulator’s attention. To be sure, Ford did pretty much the same thing when it came to the shoddy and extremely unsafe design of the Ford Pinto. In that instance, just like this one, it had to take people dying painful and fire-ridden deaths to get the attention of the media, the public and that of regulators (Lee, 1998). In both cases, regulators were not doing their jobs. There were clear rules in place but they were broken and the FDA seems to have been asleep at the wheel. If Pharmacare sold something like a baseball bat or a hat, that would be one thing. However, the regulatory presence and enforcement mechanisms should be omnipresent and impossible to circumvent when it comes to anything relating to public safety or health such as drugs, cars, child’s toys and so forth.


PharmaCARE, on the other hand, did not really do anything (in general terms) that other drug companies do not already do, even if they do it in a more legal and ethical way. Indeed, drug companies are usually given patents that give them exclusivity for a time so that they can recoup their investment and fund protections from legal action that seem to plague drug companies even when the side effects and risks are clearly known and stated and there is not a clear case of a drug being dangerous. After that time is up, however, the companies that market generic versions (e.g. Teva) are able to offer a cheaper option for patients that are not hell-bent on getting the brand name drug. (Bhardwaj, Raju & Padmavati, 2013). As for whether John is the “inventor” of the AD23 drug, the answer would be “no,” at least in terms of rights and intellectual property. The reason is that he made the discovery with his team and he was doing so on company time. As such, the invention of the drug is something that Pharmacare (and later Wellco) can claim to use and own in terms of intellectual property rights (Manap, Shapiee, Tehrani & Shariff, 2016). At the same time, John would probably be protected from liability in two major ways. First, he is acting as a whistleblower and he took his concerns in-house before taking them public. Second, unless it can be proven that he was involved in any of the decisions to continue pushing the drug from a marketing standpoint and/or he was involved with the bypassing of the regulatory and marketing rules that Pharmacare clearly violated, John is probably extremely safe. Even if he did have knowledge or involvement in any of that, his status as a whistleblower would afford him protection and perhaps even immunity if the FDA or other government agencies wanted to procure his complete and unfiltered testimony. What is stated about what John did, however, does not seem to rise to the level of John being prosecuted. Indeed, drug formulations and versions fail all of the time, and in one or more different ways. Sometimes, the drug does nothing but sometimes the drug is effective at one thing but causes other problems, the latter being applicable to AD23. Even with John’s status of not being able (legally) to demand a certain cut of the profits from AD23 and its sales, the company could still compensate him for what he did. Just three ways in which they could do that is a pay raise, a flat bonus or a percentage of the sales, even if the percentage is rather small. As it actually happened, John did indeed get large bonuses for his work. The same was true for the other executives and managers that were involved, per the case study (Pfeffer et al., 2015).


Just one example of intellectual property theft in the past two years would be the recent judgment against music artists Pharrell and Robin Thicke. Indeed, they had a hit song fairly recently called Blurred Lines. The estate of Marvin Gaye sued the artists on the grounds that their song stole a signature sound or riff from the work of the deceased singer (Gordon & Clarida, 2014). In the end, it was found that there was merit to this claim and a judgment was lodged against the singers as a result. To be sure, a song’s “sound” or its lyrics are deemed to be the intellectual property of the artist(s) that writes it and people that appropriate and use that sound or lyric string without proper credit and attribution face penalties in civil court if they get probably busted. On the other hand, there are cases where the evidence is less clear. Indeed, Lady Gaga was assailed for her song “Born This Way” in that it seemed to be entirely too similar to the work of Madonna some years ago when she had her song “Express Yourself.” No legal action was lodged in that case as, presumably, the songs have a similar but by no means identical sound. Even so, there was sniping and accusations in the media (Hammer & Wynter, 2012).


As for the legal issues that John and other family members of people who died after taking AD23, there is a pretty clear-cut legal case for all of them to sue on the grounds that the company illegally pushed and expedited the drug and kept doing so even after it was clear that an investigation or even a recall should have been done. Pharmacare did none of that and John has now come forward. To have a whistleblower that was so intimately and directly involved in the process is really a smoking gun and then some. Since he is a whistleblower, John should indeed be afforded protections. The risk of retaliation is not nearly as high given that John no longer works for any of the companies involved. Even so, he will surely be accused of lying for his own personal gain or protection (since he was involved in the drug’s development) and/or that he is only reacting to the death of his wife, who was not taking the drug for Alheimer’s. However, it is clear that Pharmacare clearly violated ethical principles left and right. Lastly, if what Pharmacare did does not rise to the level of criminality (both personal and corporate), it absolutely should be and the laws should be changed if there is not something that the company and the involved executives could be charged with. It is indeed a medical version of Enron. Surely, Wellco and Pharmacare will both be in very big trouble from a legal and corporate existence standpoint once the proverbial lids blow off of this scandal.


In the end, it is clear that Pharmacare and Compcare clearly broke the law. Wellco’s exposure seem to be much less but they will no doubt be ensnared in some ways no matter what they do. What happened in this case study is absolutely criminal and people should be charged and prosecuted in this case on an individual basis whenever possible. Any indictment or punishment of the company itself will unfortunately hurt many people that were not involved in the deceit and ethical/legal lapses. However, this sort of company culture and structure cannot be allowed to exist as it currently is. Companies that act in good faith and go through the proper processes should not be harassed by lawyers or the government. Companies like Pharmacare, on the other hand, need to be made an example of.




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Gordon, S. R., & Clarida, R. W. (2014). Robin Thicke’s Legal Battle with Marvin Gaye’s


Heirs. Entertainment & Sports Lawyer, 31(1), 17-21.


Hammer, A.J. & Kareen, W. (2012. Target Justin; Madonna “Express Yourself” Diss to Lady


Gaga?; Who is the Hottest Mama in Hollywood?; SHOWBIZ Viral Video


Showdown. Showbiz Tonight (CNN).


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Development, Regulation, and Utilization. Therapeutic Innovation & Regulatory


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