Question

Imagine you're a manager at Merck and one of your researchers has just informed you about the the possibility of using a drug to treat river blindness. Your company just developed a successful drug to treat heartworm in pets and livestock and the researcher thinks that another version of the drug could be developed to combat infectious parasites in humans.

However, the development of the drug might take 10 years and could cost over $100 million in R&D expenses. You know that the drug is targeted towards a population that will not be able to pay.

You will need to invest significantly in infrastructure in order to successfully distribute the drug and treat patients.

You could spend the $100 million on another important, lifesaving drug for which there is a profitable market.

The assignment is as follows:

Your job is to craft a memo to Merck's board of directors outlining your position.

Answer 1

The memo outlines the ethical and strategic considerations of developing a drug for river blindness, balancing the high R&D costs and lack of profitability with potential long-term benefits and reputational advantages. It emphasizes the need for Merck to prioritize social responsibility and suggests government partnerships to mitigate financial challenges while enhancing global health impact.

Step-by-step explanation:

Merck's Decision Regarding the Development of a Drug for River Blindness

To the Board of Directors,
As we stand at the crossroads of innovation and social responsibility, we must consider the potential of repurposing our heartworm drug to treat river blindness, a condition affecting millions in impoverished regions. Despite the costliness and risks involved in pursuing this R&D endeavor, which may amount to over $100 million and span a decade without guarantee of success, and our recognition that the benefactors of such a drug may not be able to afford it, we are faced with a choice between profitability and humanitarian impact.

Developing a drug for a non-profitable market poses significant financial challenges and risks leaving us with minimal advantage over the competition who may later copy the idea. However, it is essential to consider the long-term perspective and reputational benefits that committing to this cause could provide. It is not merely a question of economics but also of corporate ethics and social responsibility. Innovating in areas that competitors may neglect due to lack of profitability presents us with an opportunity to lead the industry towards a more compassionate and patient-focused future, aligning with our core values.

Government subsidies and partnerships can alleviate some financial burden, shifting our focus from a solely profit-driven approach to one that balances both public interest and sustainable business operations. The development of this drug could open doors to further research, improve our corporate image, and, most importantly, save lives. We should seize the opportunity to not only be pioneers in pharmaceuticals but also champions of global health, reflecting our company's dedication to bettering human life.

Conclusion

I urge the board to consider these aspects carefully when making the decision, as the impact of our choices extends beyond our immediate financial statements and into the history of how we address some of the most pressing health challenges of our time.