Merck Company Case

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Executive Summary Merck & Co., Inc. was, in 1978, one of the largest producers of prescription drugs in the world. As a for-profit company, the company’s core philosophy is to think of people before profits: “It is not for the profits.” A possible drug named Ivermectin for Onchocerciasis, which is commonly known as River Blindness, has been discovered as a derivative during Merck’s scientist Dr. William Campbell’s research on medicines for animal health treatment. Caused by a parasitic worm carried by a tiny black fly, the disease brought about visual impairment and skin lesions to millions of people in Africa. The World Health Organization (WHO) estimated in 1978 that some 340,000 people were blind because of it, and that a million more were suffered from various degrees of visual impairment. However, the drug needs to be tested extensively and researched further before it can be used in humans. This would require millions in investments but little financial returns, because most of the affected people in third world country cannot afford the drug. Merck spent a lot of money on research and believed that its future success depended on inventing new drugs. A possible hope for Merck was that some international organization like WHO might partially fund the program. Dr. Vagelos would make the final decision. Analysis Although Dr. Campbell’s idea of a drug that could cure River blindness was a great opportunity for Merck, the company was faced with a number of ethical, financial and moral issues that forced its CEO to contemplate before investing in this idea. First, the odds of developing a successful drug are rather low and entail high investments. On an average it took 12 years and $200 million to bring a new drug to market. Also, there were worries about ivermectin might do harm to patients’ health because it had some negative side effects on mammals.
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