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TCO D. Questions: A well known pharmaceutical
company, Robins & Robins, is working through a public scandal. Three
popular medications that they sell over the counter have been determined to be
tainted with small particles of plastic explosive. The plastic explosives came
from a Robins & Robins supplier named Casings, Inc., that supplies the
capsule casings for the medication pills. Casings, Inc. also sells shell
casings for ammunition. 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. Last fall, the FDA had promulgated an
administrative proposed rule that would have required all pharmaceutical
companies that sold over-the-counter medications to incorporate a special
tracking bar code (i.e., UPC bars) on their packaging to ensure that recalls
could be done with very little trouble. The barcodes cost about 35 cents per
package. 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. Robins & Robins contract with Casings, Inc., states, in section 14
B.2.a., “The remedy for defects in supplies shall be limited to the cost
of the parts supplied.” Casings, Inc., had negotiated that clause into the
contract after a lawsuit from a person who was shot by a gun resulted in a
partial judgment against Casings for contributory negligence. Robins &
Robins sues Casings, Inc., for indemnification from suits by injured victims
from the medication, for the cost of the capsule shells, for attorneys fees,
and for punitive damages. List any defences Casings, Inc., would have under
contract theory ONLY for the damages caused by the explosives in their drugs,
overand above the cost of the capsule shells.
(Points:15). (Short answer question)
Set 3 Questions:
List any bases Robins & Robins could sue
Casings, Inc., under contracttheory ONLY for the damages caused by the
explosives in their drugs, overand above the cost of the capsule shells. (short
answer question) (Points:15)
2. TCO B. The FDA decides to require all
pharmaceutical companies to immediately implement the tracking bars (UPC) as a
result of the disaster with Robins & Robins. Robins & Robins decides
not to challenge this and begins the process of adding them to all of their
products. However, McFadden, Inc., a NewYork pharmaceutical company, realizes
that this new requirement is going to bankrupt them immediately. McFadden did
not participate in the original public comment period. However, this rule is
different from the rule that went through that public comment period in that it
specifically names four companies as being impacted: Robins & Robins,
McFadden, Inc., Bayer, and Johnson & Johnson. On what bases can McFadden
challenge this requirement imposed by the FDA, and can they be successful?
Provide at least two bases under the Administrative Procedures Act and justify
your answer. (Points: 30)
3. TCO C. Robins & Robins immediately issued
a massive recall for the tainted medication upon learning of the situation.
Despite the recall, 1,400 children and350 adults have been hospitalized after
becoming very ill upon taking the taintedmedication. 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, 12children have died. Their families
are considering suing for both 402A and negligence. 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 the attorney for one of
the dead children’s family. List the causes of action (if any) you would file
against Robins & Robins, the FDA, and the bribed FDA member. List the
elements of the causes of action, and set forth the facts that you have that
would support a lawsuit against each of the three named defendants. State any
defences any of the three would have. Analyze the success of the defences.
TCO A. It is discovered that Robins &
Robins knew about the tainted medication 2 months earlier than they announced
the recall. They hid it and, in fact, sent out contract buyers to try to buy up
all of the medication off the shelves. Their “fake” recall failed. Using the
Laura Nash method of analyzing ethical dilemmas, analyze the ethical dilemma
faced by the CEO of Robins & Robins for the fact that they saved 35
cents/package and are now in the middle of a major, life-threatening recall.
Analyze their “fake” recall as well. Show all of the steps of the model and
give a recommendation to the CEO of what to do now that the deaths are
escalating. What is the “right” thing for the CEO to do in this case? Did the
model help you come to this conclusion, or did you use some other method?
Explain.
