In this case study, Merck & Co. will be examined to develop possible alternatives to the negative outcomes of pursuing the development of treatment for river blindness. Merck & Co. Inc. was one of the largest producers of prescription drugs in the world. In order to sustain their position in the market, they invested millions of dollars in research and funded various projects to develop drugs that will give them continued success. During research, various treatments for rare diseases were discovered but were not developed due to high investment costs and very little financial return. Congress encouraged drug companies to conduct research on rare disease that affected fewer than 200,000 Americans. But, no incentive was created for companies to develop drugs for diseases that affected Third World Countries. During a research project, soil samples from Japan were collected and a compound known as ivermectin was discovered. Ivermectin was an anti-parasitic drug used to treat parasites in animals and other parasitic illnesses including river blindness a disease that affected thirty-five countries and 340,000 people according to World Health Organizations. River blindness is primarily caused by parasitic worms that inhabit humans through bites from black flies through which individuals experience severe itching and long-term effects include blindness. As more clinical trials were conducted on ivermectin, Dr. William Campbell speculated the use of ivermectin to treat river blindness in humans due to the similarity of the parasites existent in animals. Regardless of its potential success, there are heavy costs associated with transforming ivermectin for use in humans as it may produce no economic benefit and have underlying risks to reputation considering there is adverse consequences should it be used improperly in Third World settings. The ethical dilemma faced by Merck is the decision to invest time and money into pursuing a feasible treatment for river blindness provided that it may or may not result in economic benefit. In addition to the shortfall in incentives to develop drugs for rare diseases, the likelihood of recovering investment costs is believed to be nil considering the inability of the affected to purchase the drug at its high price point. Also, there is possibility of adverse effects on humans and this may cause a shortfall in sales of ivermectin used for animals. Consequently, the affects will be felt by shareholders and the employees as the firm may risk financial loss. Merck needs to act in the best interest of the shareholders to ensure the financial success of the company. In this case, there is a high risk in attaining no financial benefit from pursuing the development of ivermectin. Subsequently, the investors are also at a high risk. If Merck were to proceed with the development of this drug, there is an advantage for the firm’s reputation to increase which may change employee and consumer’s perspective towards Merck. Merck holds a high stake in formulating a treatment for river blindness as there is a potential for no economic benefit, a risk of damaged reputation and consumer perception and a loss in sales for ivermectin used to treat animals. The first alternative would be to continue researching and developing a drug to cure those afflicted by river blindness and this would be the alternative I would choose. The reason to continue research and development ties back to the company’s corporate philosophy of working to create medicine for people rather than for profit. Merck should adhere to its corporate philosophy and create a drug for river blindness that will help thousands of individuals affected in developing countries.
The second alternative is to continue to make high profits through their drug compound for animals rather than investing money into developing a treatment for river blindness which runs the risk of providing no economic benefit. An adverse effect to this alternative is the reputational risk that Merck will face. By not producing a drug that is viable to treat a disease they risk demeaning their reputation and this may cause consumers to steer away from purchasing drugs produced by Merck. In addition, this alternative goes against Merck's principle of creating medicine for people rather than for profits. By not following their corporate philosophy they risk being perceived negatively by their consumers.
Thirdly, Merck can outsource the development of this project or sell project details to another pharmaceutical firm that can pursue the development of river blindness. This would adhere to Merck’s corporate philosophy while alleviating millions of individuals from the parasitic disease. Also, this alternative allows Merck to act in the best interest of the stakeholders to prevent the firm from taking any financial risks. In regards to negative feedback, it may be reasonable for Merck to seek financial assistance or funding from governments of the nations where this disease is prevalent. Merck can also seek out non-government organizations who seek to primarily help those affected by river blindness where they can then set up campaigns and fundraisers to fund the development of the drug.