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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Kenneth Jung

Professor Ellis

GB 711

20 Dec 2018

Final Examination

In recent events, governmental regulation has been a controversial issue creating a debate, those for governmental regulation and those for less governmental regulation of business. Governmental regulation can be defined as a law that controls the way businesses and organizations can operate. There are two types of government regulations, economic and social. Economic regulation aims to adjust prices and conditions of the economy. Social regulations aim to protect the interests of the public, such as the environment and health. I personally am for governmental regulation because regulations in place ensure that the markets run effectively and social matters are government properly. We will take a look at some examples from the class readings and presentations to support governmental regulation.

In the book Pain Killer by Barry Meier, we read about Purdue Pharma and their potent painkiller, OxyContin and their violations of products liability law. We analyzed the company's aggressive marketing tactics by overpromoting and prescribing in large quantities since origination of OxyContin in 1996 to 2004. The abundance of OxyContin during this period led to increased abuse, addiction, and in some cases death. The Food and Drug Administration (FDA) a federal agency under the US Department of Health and Human Services was responsible to review OxyContin before it reached consumers. But during this time there was significant external pressure from Purdue Pharma, lawyers, and lobbyists to push the drug for sale. The constant pressure eventually led to the FDA approving for sale of OxyContin in 1995 without significant research and placed trust in Purdue Pharma's independent studies. Purdue Pharma claimed that if a patient took 60 mg of OxyContin they could not become addicted. This claim had no proper evidence and it was obvious that Purdue Pharma was stating anything they could to downplay the drug's risks. OxyContin's original label stated that, “delayed absorption as provided by OxyContin tablets, is ‘believed' to reduce the abuse liability of a drug.” As years went by until the early 2000's reports of overdose and death begun to rise significantly. The FDA finally took notice of these statistics and instructed Purdue Pharma to add and strengthen warnings about the drug's potential for misuse and abuse. It took more than five years for the FDA to react to the ongoing opioid crisis to remove the misleading label and add a warning label of the drug's serious or life threatening risks. A few years after the FDA issued a warning letter to Purdue Pharma in 2003 to pull advertisements because they were misleading with information. Had the FDA properly tested OxyContin by going through the adequate trials and properly warning patients, the opioid epidemic could have been avoided or altered to some degree. Which is why I strongly believe that we need governmental regulation because although the FDA's response was reactionary, they did what they were supposed to by protecting the public health by ensuring the safety, efficacy, and security of human drugs.

In class we listened to the environmental law group's presentation on the book, “Stand Up That Mountain” by Jay Erskine Leutze. It revolved around the small community in Avery County, North Carolina fighting the Clark Stone Company to save their beloved Belview Mountain. The Clark Stone Company obtained a permit for Putnam Mine on Belview Mountain, which was a gravel quarry stretching over 151 acres of land and close in proximity to the Appalachian trail. In a relatively small town, the local community begun to take notice of the company moving in with their heavy machinery and equipment. Soon after, the Clark Stone Company begun to start the dynamite process to access the mine. The locals experienced loud noises, traffic from the mountain through the local roads, shaking from the dynamite explosions and as a result some nearby homes had cracked foundations. The locals were unhappy about this and begun their own investigation. They knew that they would not be able to fight Clark Stone Co alone, so they reached out to Jay Leutze, a lawyer and a trustee for Southern Appalachian Highland Conservation for help. Together, they discovered that the state's mining act was violated and created national attention gaining supporters from locals, Appalachian trail enthusiasts, and major conservation associations. Jay and the locals knew that this would be an uphill battle, because it was extremely difficult to get a mining permit revoked and they would be going up against Clark Stone Co. Jay and supporters begun by looking at how the permit was issued and why no one disputed it. They discovered that no notice was given because it was 50 feet behind a property line and since the North Carolina's Mining Act requires the operator to notify at least one party, Clark Stone Co only notified their own subsidiary paving company and the person they leased the land from, keeping the information in a closed loop. After this discovery, Jay learned that the North Carolina Department of Environment and Natural Resources (DENR) could deny permits if, “The operation will have significantly adverse effects on the purposes of a publicly owned park, forest or recreation area.” By raising awareness that the DENR overlooked the protection of the Appalachian Trail, the DENR responded by revoking the mining permit. Clark Stone Co fought the revocation, but it was eventually decided that the DENR had the authority to revoke a permit if it was found in violation of the Mining Act. Even the government such as the North Carolina DENR can make mistakes. But, with the help of some locals and Jay Leutze, the concerned individuals were able to bring it to the attention of the government, and the DENR enforced the law.

Governmental regulation is used to achieve a balance between social, environmental, political, and economic issues. Regulations are often seen as negative but it is still necessary. Without regulation, markets and/or environments may not work effectively or properly. The overall reason for governmental regulation is to ensure a fair and truthful operation within the market. As we discussed in the Purdue Pharma case, governmental regulations are needed to protect the health and wellbeing of patients, as well as enforcing the law on Purdue Pharma's actions. Lastly, we learned in the environmental law presentation that the governmental regulations were in place to protect the environment, social and economic value of the natural resources. With looser government regulations, we would allow corporations and companies to become stronger and decide actions in their best interests. Governmental regulations are in place to protect the people who may not have a strong voice individually but together we have the power.

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