Template for a Case Analysis Summarize the facts of the case. State the central ethical issue(s). Develop an ethical analysis of the case. Identify available options. Apply ethical ideas and principles to evaluate the options and select (and defend) the one that is best. Use Freeman’s stakeholder approach to the analysis, but indicate the difference(s) there would be if you used Friedman’s shareholder approach. Use 2 of the big 3 ethical theories – Kant, Utilitarianism, Rawls. Use other ideas and principles from the course readings as appropriate, e.g., Donaldson might be useful in a global business case, or Baxter in an environmental case. If the actual outcome of the case is known, compare it to the option selected. Conclude by summarizing your answers to the central ethical issues.

Merck Case − Facts River blindness was a wide-spread problem in poor countries, and it had no effective treatment. Scientists at Merck accidentally discovered that an anti-parasite drug for animals was effective against a parasite similar to the one that causes river blindness in humans. Developing and testing a human version of the drug would cost a large amount of money. The target countries could not afford the drug if it was developed. Merck had a tradition and culture of placing people before profits.

Merck Case – Central Ethical Issue Should Merck spend money to develop a drug that will reduce the suffering and prolong the lives of millions of poor people in third world countries, but for which there is little prospect for recovering their costs and making a profit?

Merck Case − Options Develop the drug, Forget the drug. Either at a loss, or Subsidized by profits from other Merck products, e.g., the animal version of the drug. Forget the drug. 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. Other?

Merck Case − Stakeholders Merck shareholders who generally want growth in stock value and/or dividends. All of the people who would be saved from river blindness. World-wide humanitarian agencies that have tried to bring relief to river blindness victims. The countries in which river blindness occurs. Others?

Merck Case − Friedman’s View At first glance, it seems Friedman would say no. Profit motives would appear to favor forgetting about the human version of the drug. There do not appear to be any legal issues in doing so. But at second glance, Friedman might say yes. There could be huge anti-Merck social sentiment if Merck did nothing and people found out about it. The positive reputation and PR from developing the drug might actually lead to extra profits for Merck. A

Merck Case − Stakeholders Kant Reversible? Merck management needs to put itself in the shoes of the river blind. Respect for persons? Abandoning millions of people to an agonizing future simply to increase profits treats them as means only. What of the options? Can’t forget about it. Could turn preliminary findings over to UN. Could develop the drug.

Merck Case − Utilitarianism Sum benefits and consequences across all stakeholders and chose the one with greatest net benefit for all. Can’t forget about the drug. Turning preliminary findings over to UN is marginal. Developing the drug maximizes net benefit.

Merck Case – Davis’ 7 Steps Use Michael Davis’s alternative framework – Less harm? (aka Utilitarianism) Publicity -- especially given Merck’s public stance on serving people? Defensibility without appearing self-serving? (aka Rawls) Reversibility (what it you lived there)? (aka Kant) Organization’s values and culture? Demands of virtue?

Merck Case – Final Outcome Merck developed the drug with full expectation of not recovering its investment. Turned out to require one pill per year. Moreover, Merck paid to develop the distribution system. Compare this outcome to the selected option.