BUSINESS ETHICS

CASE 6.3: “OFF-LABEL” MARKETING

INSTRUCTOR: A.Thớ

Course’s ID: BA020IU. Group 04

Members of group 8:

Tran Minh Quang - BAFNIU20403

Le Khanh Toan - BABAUH20027

Le Quang Trung - BABAWE19117

Dang Hong Hanh - BABAWE18684

Dang Minh Tuan - BABAIU1936

Question 1: Why would illegal marketing activities feature so frequently in the
pharmaceutical industry?

It is because of the need for off-label drugs that are still necessary that pharmaceutical companies
still defy the illegality of operating.  The pharmaceutical corporations are trying to net their
product or service noticed to the publicity as popular as possible. The more people know about
your magical treatments, the more chance you earn profit from them.  But they have to obey the
rules and promise to follow the requirements, but they have a tendency to betray by creating
false expectations and illegally exploiting these promises for their own gain. It is not unlawful to
promote or advertise your items; however, it is prohibited to make all of these false claims  in
order to get more customers and build up sales.

Besides, there are many things to consider about the law system. Some companies take
advantages from this crack. For instances, in 2015, Amarin Pharma, a small drug manufacturer,
challenged this position by claiming that limiting marketing promotions for Vascepa, its
cardiovascular health drug, violated the company’s First Amendment rights to free speech. Judge
Paul A. Engelmayer of the federal district court in Manhattan, sided with Amarin Pharma,
arguing that the FDA’s allowance for physicians to prescribe medications for nonapproved uses
(the FDA does not regulate physicians, the states do) represented sufficient incongruity to
support the argument that the FDA approach to off-label marketing was restrictive. The judge’s
decision granted a preliminary injunction that prevented the FDA from bringing any further
action against Amarin Pharma.

This Actions will let to many bad circumstances when their customers use their products for a
long term period of time, not only do they fail to cure the disease but they also create many other
dangerous illness such as cancer or chemical-poisoning. When it occur with a huge amount of
patients suffer from scientific control and fake medicines; and the root problem cannot be solved
because of the dodging the law acitivites from pharmaceutical corporations, this must be an
endemic.
Question 2: Why would pharmaceutical companies choose to continue such practices even
when it is made clear that they are illegal?

Off-label in the pharmaceutical industry is known as a drug that is prescribed for a different use
in the directions for use or does not follow the indications authorized by the drug regulatory
agency. Federal law requires drug companies and medical device companies to apply for FDA
approval of their products for specific uses by specific patient groups and at specific dosages. To
get FDA approval, companies must provide data demonstrating that their products are safe and
effective for those specific uses.

And off-label marketing is a form of drug promotion by companies operating in the

pharmaceutical sector, but this form of advertising is considered illegal. However, this form of
marketing is not legal, but there are many drug manufacturing companies or even large-scale
manufacturing companies using this form of advertising even though they have been fined with
large sums of billions of dollars. In the famous case in 2012, GlaxoSmithKline paid out more
than $3 billion to settle an off-label promotion lawsuit involving the antidepressant drug
paroxetine (Paxil) used in children and bupropion (Wellbutrin) used in children to lose weight.

Although lawsuits have occurred and billions of dollars have been spent to solve the problem,
businesses still do not give up this way of advertising and continue to operate because of the
benefits of advertising campaigns. This spread is estimated to be very large.

In fact, pharmaceutical companies have done a lot of research and it takes a lot of time and
money to produce a drug, so the drug is only sold within limits allowed by the FDA, making the
company's capital cannot be recovered and profitable in the future.

Therefore, pharmaceutical companies use off-label as a tool to increase revenue for the company
with the aim that a drug can be used in many different diseases leading to the drug being sold in
large quantities. In addition, the company is able to expand the market based on the wide use and
multidimensionality of the drug making many doctors aware of their medicine. In fact, doctors
are in need of drugs that have many functions to treat patients and doctors are the ones who have
the authority to use all drugs without permission. of the FDA. Doctors often prescribe off-label
prescriptions based on research and experience that support that use of the drug as safe and
effective. It is because of the need for off-label drugs that are still necessary that pharmaceutical
companies still defy the illegality of operating.

Question 3: What should the respective boards of directors be doing here? How should
they be held accountable?

Many such incidents of marketing and promotion have spiraled out of control, with companies
promising consumers this and that in order to earn money.
When discovered, their first concern is profit, so they only have to pay fines for what they have
done, the fines are not even proportional to the amount of revenue they have generated. Many
companies also have the ability to use more resources to prevent information from spreading.

They must take steps to minimize the impact of their actions. Customers who have purchased
from you will be compensated, and given gifts. Offer an acceptable apology and explanation in
front of the group.

How can we expect society to act ethically if we continue to give individuals opportunities even
when they don't deserve it? The fines are insignificant compared to the millions of dollars in cash
for these companies, which they can easily recoup by continuing their illegal activities. Money is
easy to earn, but freedom is another story. They should be jailed as a result of their actions. They
will bear the consequences that they have caused. During that time show them out and try to fix
the damage they caused.

Question 4: Critics argue that fines are too affordable. In other words, a $1 billion fine for
activities that generate several billions of dollars in illegal sales simply.

By and by, I concur with these pundits. The fines are turning into a little token punishment for
middle class wrongdoings in corporate America. Organizations consider them to be only a piece
of the interaction and figure out that despite the fact that they need to forfeit what appears to us
as an incomprehensible measure of cash, they are making a few times that off of their criminal
operations. A great many people would concur that on the off chance that you had a potential
chance to make $10 billion buthad to forfeit $1-2 billion of that benefit then you would simply
feel free to bounce on it. According to allies perspective the FSGO has a three stage process for
deciding money related fines which incorporates the assurance of a base fine, the culpability
score, and deciding the complete fine sum. The complete not entirely set in stone by duplicating
the base fine (found by both the idea of the wrongdoing and the misfortune endured by
casualties) by the culpability score (the level of responsibility from 1-4) and that implies a fine
can ultimately depend on multiple times its most extreme base. There is likewise capital
punishment which is set in motion when an organization is viewed as at legitimate fault for
acting in activity exclusively for criminal purposes, which is a fine set to match all resources of
the partnership. (121) So while deciding wrongdoings I believeit ought to be surrendered to the
FSGO to conclude how correctional and how much is sufficient.