08/11/2017

MERCK: RIVER BLINDNESS

An Ethics Case study

Shubham Kant
1605034

THE ETHICAL DILEMMA

The ethical dilemma in Merck and the river blindness was whether the company should
pursue the research which may result in profit, or choose the safer option, that was going
for the profit instead of researching the drug. The drug was considered to cure the very
deadly and detrimental disease called the river blindness. Decision makers of the
company had qualms about this research. The qualm was that the consumers could not
afford it. Also, the poor infrastructure and supply chain in affected regions would mean
the distribution would be poor at best, and completely inefficient at worst. This meant no
profit for the company.

Shareholders vs Stakeholders: Options

i. Develop the drug,
a) Either at a loss, or
b) Subsidized by profits from other Merck products, e.g., the animal version of
the drug.
ii. Forget the drug.
iii. Turn the preliminary findings over to the World Health Organization or some other UN
agency that could then fund it through charitable contributions to the UN.

The company has to take care of its customers just the same way it has to maximise
operating profitably and meet its obligations to its shareholders. This conflict makes
it difficult to balance both, because while offering the goods free will infringe its core
values of maximizing shareholders wealth, the company risks losing its key market.
Businesswise, the community compromises of customers to the company.
POTENTIAL SOLUTION & ITS CONSEQUENCES

My point of view is that the company should go forward with the development and then
distribution of the new drug for the benefit of the affected population.
The solution would be:
a) Taking up the development of new drug project.
b) Setting up of distribution channel in affected regions to ensure that no
misappropriation or fraud happens in channel
c) Comprehensive large-scale partnerships with local governments and community to
ensure public awareness and sustainable treatment
d) Develop alternate funding sources through involvement of NGOs and welfare funds
of developed nations.

According to utilitarianism approach, the goal of any business is to maximize happiness

and to maximize profits. Therefore, pursuing an option that maximizes these two proves
the most logical options. All the above options either focus on maximizing the happiness
of other parties. For example, selling the drugs to the community increases the
companys profits, offering the preliminary findings to the NGO helps the company save
a lot in terms of capital and operational expenses, but does not offer guarantee of
delivery of the drugs to the community. Additionally, it would take long for the NGO to
provide the drugs to the community within such a short time.

Although at first it may seem unethical from the perspective of Friedman, but on taking
a holistic view, the benefits stand out clearly.
a) There could be huge anti-Merck social sentiment if Merck did nothing and people
found out about it.
b) The positive reputation and PR from developing the drug might actually lead to
extra profits for Merck.