Question

Managers and the Legal Environment (8th Edition) CSP's

7.1   HEM Pharmaceuticals Corporation designed a new drug, Ampligen, to fight chronic fatigue syndrome. Typically, new medicines go through several phases of clinical evaluation before approval by the Food and Drug Administration (FDA) and general release onto the market. As a part of the process, HEM began a clinical trial with ninety-two patients to evaluate the effectiveness, side effects, and risks of Ampligen. The patients signed consent forms that warned them of the experimental nature of Ampligen and the possible side effects. The patients were free to withdraw from the trial at any time, but if they remained in the study, they were required to accept the risks of treatment, forgo other drugs, not become pregnant, and submit to intensive and uncomfortable testing for one year. In return, after the trial ended, they would be entitled to receive Ampligen for a full year at no charge.

At the end of the trial, a manager at HEM considered refusing to provide the year’s supply of the drug to the patients free of charge on the grounds that there was no binding contract. If you were that manager’s supervisor, what would you recommend? Why? [Dahl v. HEM Pharmaceuticals Corp., 7 F.3d 1399 (9th Cir. 1993).]

Answer 1

Organizational executives reflect their company's business activities. Here, HEM Pharmaceuticals Company introduces on the market a new medication which has to be checked until according to requirements of the Food and Drug Administration (FDA). The applicant signed the agreement according to the guidelines and had to agree with all of the clauses. On the other hand, corporate officials should obey other laws, such as supplying Ampligen free of charge for a full year. Furthermore, if the contractor does not follow the rules after the successful conclusion of the trial period, he violates the terms of the contract. Another ethical problem is that of the company's irresponsibility. I would have recommended my boss to meet the agreed terms as the company's leader. I would've told him that business principles are important to every company more or less. Nevertheless, in comparison to the result obtained by the organization, a successful outcome can only be accomplished through the imaginative hallucination of a corporation, but of its entire work force. Therefore, according to the contract terms, I would then have offered the patient the drug for a whole year.

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