Business Ethics Assignment

Suggested Guidelines: “How to Read and Analyze a Business Ethics Case”

Based on these guidelines, you can develop your own method for reading and analyzing/solving cases.

(Based on the Merck and the River Blindness Case -- MRB)

1. Read the case to understand what it is about

2. Carry out an internet search based on the major issues and/or parties involved

MRB – search river blindness, Merck and World Health Organization (WHO)

Merck founder George Merck: “Medicine is for the people, not for profits”.

On the web site of Merck: culture and values, code of conduct and compliance, corporate responsibility

3. Identify the timeline – when the case starts, develops and ends

MRB – starts in 1980

1981 – budget approval to develop human version of Ivermectin

1987 – 7 years to develop the human version Mectizan

For several years Merck searched for anyone to buy the drug Mectizan

1991 – formation of the international committee for distribution

1990s and 2000s – free distribution of Mectizan (1992 South America, 1995 Africa)

By 2010 Merck had given away 2.5 billion tablets of Mectizan worth $3.5 billion to 80 million people a year

Long term advantages of making the ethical choice

4. Identify important stakeholders

MRB – people afflicted by or at risk of river blindness and their families, Merck and decision makers in the company, Merck’s shareholders, Merck’s employees, business partners and clients, WHO, United States government, governments of nations afflicted by the disease, non-profit organizations, NGO’s

5. Identify the characters together with their roles/positions in the case

MRB – Dr. Bill Campbell (research scientist for Merck), Dr. Mohammed Aziz (research scientist for Merck), Dr. P. Roy Vagelos (head of R&D of Merck later CEO of Merck), Henry Gadsden (CEO of Merck in 1980s)

6. Identify important terms to remember

MRB – Ivermectin (Merck’s best-selling animal drug),

Mectizan: human version of Ivermectin

7. Note any other relevant issues/factors/information following the timeline

For companies: environmental/industry/market based changes, financial issues, organizational changes etc.

MRB – cost of developing/testing a new drug is $100million, patients cannot afford the price, distribution problem, any side effects for humans/cheap version of the human drug could threaten sales of the animal version ($300 million)

Market conditions: for Merck net income as a percentage of sales↓, costs↑, regulations↑, scientific breakthroughs↓, research productivity↓, competition↑, generic drugs↑

1980’s approval of budget for development of human version of Ivermectin

A single pill of Mectizan taken once a year cures and prevents the disease

For several years Merck searched for anyone to buy the drug Mectizan

Merck decided to give Mectizan away for free to victims of the disease

Merck financed an international committee to provide the infrastructure for distribution.

For individuals: relevant personal career related information

MRB – Vagelos: unproven rookie, new to the company and to the topic of tropical medicine, developing the human version was a personal and departmental risk

8. Note important problems/dilemmas and decisions

MRB – a. Vagelos: risk to the company and his career vs. millions condemned to lives of suffering, blindness and death -- “important decision with an ethical component”

Decision: approval of budget for development of human version of Ivermectin

b. No one steps forward to buy the new drug to protect 100 million people

Decision: Merck decided to give Mectizan away for free to victims of the disease

c. No established distribution channels to get the drug to the people who needed it

Decision: Working with WHO, Merck financed an international committee to provide the infrastructure for distribution. Total investment now was over $200million+production costs.

By 2010 Merck had given away 2.5 billion tablets of Mectizan worth $3.5 billion to 80 million people a year.

9. Is the issue identified as an ethical problem/decision – when, where, why, how and by whom?

By Vagelos “a decision that had an important ethical component” in 1981

Whatever the risk to the company and his career, without the drug, millions will be condemned to lives of intense suffering, blindness and death.

10. Use of ethical principles in the case in the decision making process

11. Obligations/responsibilities and blaming of parties involved