Business Law Case 1 Facts: A well-known pharmaceutical company, Robins & Robins, is working…

Business Law Case 1

Facts:

A well-known pharmaceutical company, Robins & Robins, is
working through a public scandal Three popular medications which they sell
over-the-counter have been determined to be tainted with small particles of
plastic explosive It has not yet been determined where the plastic explosives
came from, but over $8 million in inventory is impacted The inventory is
located throughout the Western United States, and it is possible that it has also
made its way into parts of Canada A recall occurs but it is mostly
unsuccessful

Last fall, the FDA had promulgated an administrative rule
which stated that all pharmaceutical companies which sold over-the-counter
medications must incorporate a special tracking bar code (ie UPC bars) on all
packaging, to ensure that recalls could be done with very little trouble This
bar code would have cost about $35 (cents) per package, which would have cost
the company nearly $3 million on this batch of inventory

Robins & Robins lobbied hard against this rule, and
managed to get it stopped in the public comments period They utilized multiple
arguments, including the cost (which would be passed on to consumers) They
also raised “privacy” concerns, which they discussed simply to get
public interest groups upset (One of the drugs impacted is used for assisting
with alcoholism treatment – specifically for withdrawal symptoms and many
alcoholics were afraid their use of the drug could be tracked back to them) Robins
& Robins argued that people would be concerned about purchasing the
medication with a tracking mechanism included with the packaging and managed to
get enough public interest groups against the rule The FDA decided not to
impose the rule

Using the above fact pattern, answer the following three
questions:

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1 TCO C
Robins & Robins immediately issued a massive recall for the tainted
medication, upon learning of the situation Despite the recall, 1400 children
and 350 adults have been hospitalized after becoming very ill after taking the
tainted medication Each of them had failed to note the recall after having
already purchased the medication It is quickly determined that they will need
liver transplants and many of them are on a waiting list During the wait, to
date, 12 children have died Their families are considering suing for 402A and
negligence, both The attorneys stated that but for the lobbying efforts, the recall
process would have been automated and the people would not have gotten sick or
died

You are an employee with the FDA You are drafting a memo to
your boss analyzing the FDA’s liability and explaining why the FDA did the
right thing in deciding not to pass the original tracking bar (UPC) rule You
are specifically being told to respond to the issue of the deaths, and
illnesses What would you write? Include (and explain fully) any defenses you
feel that the FDA could use against any negligence or public relation cases
Explain what liability (if any) could the FDA have to the victims and their
families

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