bireetion: Read the article and answer the questions required below it. Introduction Let's begin with a case study of Merck and Company, discussing how they dealt with the problem of developing a drug that was potentially life-saving but which presented them with little, if any, chance of earning a return on their investment. The drug was {rmer/{tin} one of their best-selling animal drugs. The potential market for the drug was those suffering om river blindness an agonizing disease aficting about 18 million impoverished individuals in Africa and Latin America. The disease is particularly horrendous: worms as long as two feet curl up in nodules under an infected person's skin, slowly sending out offspring that cause intense itching, lesions, blindness, and ultimately death (though many sufferers actually commit suicide before the final stage of the disease). The need for the drug was clear. However, the victims of river blindness are almost exclusively poor. It seemed unlikely that Merck would ever recoup the estimated $100 million it would cost to develop the human version of the drug. Moreover, if there proved to be adverse human side effects, this might affect sales of the very protable animal version that were $300 million of Merck's $2 billion annual sales. Finally, Congress was getting ready to pass the Drug Regulation Act, which would intensify competition in the drug industry by allowing competitors to more quickly copy and market drugs originally developed by other companies. Their managers felt, ultimately, that they were obligated. They even went so far as to give the drug away for free. This story seems to run counter to the assumption that, given the choice between prots and ethics, companies will always choose the former. The choice, however, may not be as clear-cut as this dichotomy suggests. Some have suggested that, in the long run, Merck will benet from this act of kindness just as they are currently beneting om a similar situation in Japan. The main ethical dilemma in the story is a conict of values especially protability and ethical practices. For example, the company had to decide between prots that are the core of the company's operations due to the shareholder's wealth maximization objectives, and the company's image from the corporate social responsibility perspective and the welfare of the community the external publics who are both the company's customers and community. Therefore, is at cross roads because it has a responsibility to serve company all these W and meet the interest of all these public without compromising the interest of the others. River Blindness The disease 9mm, known as river blindness, is caused by parasitic worms that live in the small black ies that breed in and about fast-moving rivers in developing countries in the Middle East, Aica, and Latin America. When a person is bitten by a y (and some people are bitten thousands of times a day), the larvae of the worm can enter the person's body. The worms can grow to almost two feet long and can cause grotesque growths on an infected person. The real trouble comes, however, when the worms begin to reproduce and release millions of microscopic baby worms into a person's system. The itching is so intense that some infected persons have committed suicide. As time passes, the larvae continue to cause severe problems, including blindness. In 1978, the World Health Organization estimated that more than 300,000 people were blind because of the disease, and another 18 million were infected. In 1978, the disease had no safe cure. Only two drugs could kill the parasite, but both had serious, even fatal, side effects. The only measure being taken to combat river blindness was the spraying of infected rivers with insecticides in the hope of killing the ies. However, even this wasn't effective since the ies had built up immunity to the chemicals. The Ethical Dilemma The company has to take care of its customers just the same way it has to be operated protably and meet its obligations to its shareholders. The nexus between these publigs makes it a difcult balance because the company works to meets the needs of the customers. While offering the goods ee will infringe its core values of maximizing shareholder's wealth, the company risks losing its key market. m, the community compromises of customers to the company. As an m the company stands to gain om the publicity it will gain om its service to the community and humanity as a whole. However, by providing the drugs to the community ee of charge, the company risk losing its residual prot. While the company had an option of using its nancial assets to develop the human version of the m it is clear that the nding would be costly to the company, but then is the corporate image that comes with seeing the community surfer while they could offer alternative solution to death. The company has values that serve as its foundation for moral codes and ethical reections. It is also important to note that the company has had history of charitable offerings to the community that later becomes the company foundation for driving growth and revenue. Considering the fact that the company has had a successfully operation in Japan following its ee streptomycin when other companies were eeing Japan, the company realizes the accruing benet of such operations. Moral Paradigm and Shareholder's Wealth il'he moral paradigm is to pursue an option that provides the most utility. Maximizing the shareholder's wealth would only benet the shareholders, but then providing the drugs to the community would benet a large community. The utilitarian paradigm is therefore, a very important paradigm that can be used a basis for supporting the decision to provide the drugs to the community. Both utilitarianism and am support providing her drugs to the community because maximum happiness, while at the same time saving the community from extinction. The idea behind the decision is that the result justies the means. In this case, the result is not merely the community, but also the company's image as a socially responsible company. Turning the preliminary ndings to the world health organization or another UN agency to nd it though charitable organization seemed like the most logical options that could help the company save on operational expenses, but still allow the company to participate in drug delivery. However, this option has its own downsides. For example, the company is a corporate entity, turning the preliminary ndings to an NGO would mean losing contact with customers on the ground. The disease is an opportunity for the company to establish a connection through the contact points. The company stands to benet direct contact with the customers (drug recipients) by offering the drugs directly. It can also strengthen itsm brand by proving its position about corporate social responsibility. Maximizing Ethics Adds to Prot The goal of any business is to maximize ethics (maximize happiness) and to maximize prots. 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 company's prots, offering the preliminary ndings 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. Questions : In your own words 1. Was Merck morally obligated to develop this drug? Explain your side of this issue. 2. Is it not that the decision of Merck about not selling mm and instead give it for free to victims does not show concern for all stakeholders? Defend your answer? 3. What have you learned out of this case? Briey narrate this lesson