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Fact Pattern 19-1 In 1999, the Drugs-R-Us Began Testing Its New Drug, Reduceo

question 256

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Fact Pattern 19-1
In 1999, the Drugs-R-Us began testing its new drug, Reduceo, a medicine to help people lose weight. Tests looked promising and, in 2006, the company applied to the FDA for approval to market Reduceo as a prescription drug. In March 2009, the FDA granted Drug-R-Us approval to market Reduceo. Reduceo was sold with some "diet enhancing" cookies that contained no drugs but were claimed to help dieting with Reduceo.
Frank saw an ad for the new drug. The Reduceo ad stated that it was a "wonder drug" and "tests prove it is the safest weight reduction drug on the market today!" Frank was interested and made an appointment to see his doctor.
Frank's physician prescribed the new drug for his patient. Frank had no success using other weight-loss drugs, and dieting and exercise seemed ineffective. Frank took Reduceo from June until the end of August and lost 25 lbs. He also ate Reduceo's cookies. He was delighted with his weight loss, but was concerned because dots appeared before his eyes, causing disorientation. One day, the dots appeared before Frank's eyes while he was driving. He became disoriented and hit a tree and was seriously injured. He sued Drugs-R-Us, alleging negligence in manufacturing and inadequate warning of possible effects, as well as for deceptive advertising.
-Refer to Fact Pattern 19-1. When Reduceo was submitted for FDA approval, what other standard did the FDA apply in its approval process besides the one listed in the last question?

Definitions:

Generally Accepted Accounting Principles

A collection of commonly-followed accounting rules and standards for financial reporting.

Non-Manufacturing Costs

Expenses that are not directly related to the production of goods, including selling, general, and administrative expenses.

Prevention Cost

Expenditures incurred to avoid defects in products or services, including costs associated with quality planning and assurance.

Rework Costs

Rework costs are expenses associated with fixing defective products or correcting service delivery errors to meet customer specifications or quality standards.