Nov 26, 2020 in Coursework

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Abstract

The key goal of this paper is to provide a clear and concise analysis of the events unfolding in the Elans Pharmaceutical case. In the initial section of the paper, the focus is on providing a distinctive relation that might be found between the events of the case in respect to elements of ethics and compliance. Subsequently, the paper provides a personal perception on the matter of whether the CIA has immense capacity to prevent such frauds from happening again. In the last section, the paper provides two debatable questions that are related to the aforementioned case.

Case Study Analysis: Elan Pharmaceuticals Inc.

The Case about both Ethics and Compliance

The activities of Elan can be perceived as having intense elements of breach of ethics and compliance set forth to govern drug production and promotion in that matter. The company's decision to embark on availing and distributing Zonegran goes against measures set by OIG (Department of Justice, 2010). It should be understood that OIGs formulated policies and regulations are focused on different unique frauds against the Federal Health Care or citizens. One of these compliance, which focuses on guiding ethics, stipulates against engaging in illegal kickbacks and other illegal forms of remuneration that are provided to numerous agencies associated with the pharmaceutical company at hand.

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Thus, the decision involved with the company paying commissions to physicians for drug prescription activities is deemed unethical and non-compliant with the aforementioned OIG guideline. First, it should be mentioned that the core production of the drug was aimed at curbing epilepsy (Department of Justice, 2010).

However, the company, through its baited physicians, used the drug to cater to secondary needs that included treatment for bipolar disorder and obesity. Consequently, this unethical behavior increased healthcare risks amongst its end-users. Second, the company, which is mainly a research and development firm, is engaged in the production and marketing of the product. This, in turn, can be associated with an inhumane attitude towards others in the larger society. Third, the company also engaged physicians in its fraudulent yet risky activities (Department of Justice, 2010). The company conducted payments to physicians each time they prescribed the drug for secondary and related purposes.

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OIG compliance agreement towards the administration of kickbacks and other remuneration activities is ascertained on criminal grounds (Burke and Saner II, 2003). The compliance also impacts such penalty measures as civil monetary sanctions, like in the case of Elan Pharmaceuticals, and omissions from participation in health care initiatives (Department of Justice, 2010).

Speaking further, the compliance provides room for the pharmaceutical companies to operate within safe harbors and under the anti-kickback laws. However, taking a closer look at the activities of Elan, it is indecisive to claim that it operated within the aforementioned policy formulation. It can also be argued that despite the safe harbors, provided by OIG in dealing with matters related to allowing kickbacks to physicians, the activity at hand was risky and dangerous (Burke and Saner II,2003). This is associated with the fact that Zonegran was meant for treating epilepsy and not such diseases as eating disorders and bipolar disorders.

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CIA's Capacity in Dealing with Similar Pharmaceuticals Cases

Personally, I believe that the CIA can deal with and thus, prevent activities of a similar nature in due course. This is associated with the fact that the CIA has formulated stringent measures and penalties that might help tackle any possible violation in the future. For instance, the CIA has allowed immense levels of partnerships with both OIG and IRO. This has ensured that matters related to changes in the activities of a company dealing with drug production are scrutinized closely and recommendations provided at an Effective Date (ED) (Burke and Saner II, 2003).

In consequence, any suspicions that are detected, and perceived as having gone contrary to the policies of the CIA, are interdicted and analyzed efficiently. It is also safe to ascertain to the assumption that the regulation puts forward hiring of Chief Compliance Officer, which reports directly to the Chief Executive Officer, is an effective measure that helps attribute liability to specific professionals. Other measures recognized and supported by the CIA direct pharmaceutical companies to form both Compliance and Audit Committees that are mandated with the task of analyzing the right course of business. Additionally, the penalties recommended for precedent cases are unfavorable for businesses that might decide to engage in fraudulent behaviors.

2 Questions for Debate and their Respective Stands

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Question No. 1: Does the amount which is set for penalties match with the overall level of fraudulent activities of the company, given that the US government loses billions of dollars in matters related to the aforementioned drug frauds?

Stand: I think that effective measures should be developed to establish the exact losses caused by the fraudulent activities. This will help to set penalties that even surpass the fraudulent profits earned so that the activity is discouraged completely. Otherwise, stipulating ineffective measures might not do much in curbing the menace as the manufacturers might engage in the activity and use a portion of their fraudulent profits to cover for penalties.

Question No. 2: How sure is the CIA that the implementation of the policies will be effected without breaches?

Stand: Given that the CIA has overlooked the need to administer properly scrutinized independent Chief Compliance Officers to all pharmaceuticals companies, it is uncertain that elements of liaisons might be formed to continue with the activity without being noticed. My stand is that the CIA should impose Chief Compliance Officers that are independent but at the company's cost.

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