Management Team Assignment #2

• ReadWTO case study: "Patents, parallel importation and compulsory licensing ofHIV/AIDS drugs: the Experience of Kenya (bb)
• View film excerpt: "Fire and Blood" (bb)

• Your management team is part of a pharmaceutical company that has been subpoenaed byCongress to testify about the company's decision to oppose the granting of compulsory licensingby the World Trade Organization to Kenya with respect to HIV/AIDS drugs developed and manufactured by the company. A compulsory license would permit a major Indian pharmaceutical competitor the right to manufacture a drug patented by your company and sell it at a fraction of the price in Kenya and possibly in other countries as well.
• Your company incurred hundreds of millions of dollars in research and development costs to produce this anti-viral drug and now it stands to lose a great deal of money in the manufacture and sale if the patent exception and compulsory license is granted. The shareholders will most certainly be angered over the year-end profit and loss statement. The publicity has also cast your company in a negativepublic image. It is expected that the company's advertising expenses willbe substantial to restore its family oriented reputation.
• Your company was also on the brink of developing a serum to cure Ebola but has had secondthoughts given the problems in Kenya. The newspaper coverage has already created a "no-win"situation for your company:
• "Ebola Cure Not Fully Developed Because Big Pharma Not Interested In Saving Lives Of Poor People In Africa
• https://www.techdirt.com/articles/20140805/18174628123/ebola-cure-not-fully-developed- because-big-pharma-not-interested-saving-lives-poor-people-africa.shtml
• As you may have heard, there's been a somewhat scary Ebola outbreak in western Africa. You may have also heard about what some are calling a "secret miracle serum" that effectively stops the impact of the virus for those who catch it. It's an experimental drug that hasn't undergone human clinical trials yet, but it was apparently given to a couple of Americans and appears to be working. There's some indication that it would take a couple months to produce a larger number of doses -- though, again, the lack of testing here means that people really aren't sure if it will work (or if there are serious side effects).
• That said, as one article notes, a big reason that there hasn't been much testing on this is because treating poor people in Africa just isn't very profitable for the drug companies:
• "These outbreaks affect the poorest communities on the planet. Although they do create incredible upheaval, they are relatively rare events," said Daniel Bausch, amedical researcher in the US who works on Ebola and other infectious diseases.

"So if you look at the interest of pharmaceutical companies, there is not huge enthusiasm to takean Ebola drug through phase one, two, and three of a trial and make an Ebola vaccine thatmaybe a few tens of thousands or hundreds of thousands of people will use."

While some may question whether or not Bausch's statement is just from frustration from where he is, Big Pharma execs more or less confirm his claims. Remember that it was just a few months ago that we wrote about Bayer's CEO claiming directly that they make drugs for rich people who can afford it:

Bayer Chief Executive Officer Marijn Dekkers called the compulsory license "essentially theft."

"We did not develop this medicine for Indians," Dekkers said Dec. 3. "We developed it for western patients who can afford it."

As we noted at the time, it's worth comparing that statement to what George Merck, the former President of Merck said many decades ago concerning the pharma industry:

We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been."

Please I only need help with the question in bold

Your management team has been assigned the job of drafting a memorandum

-identifying the problem;

-evaluating the different stakeholder viewpoints;

-and, proposing a solution or alternative solutions to the problem.

The memo will be used as the basis for the company's testimony before Congress.You must also address whether, in the future, the company will be willing to develop expensive drugs that will be used primarily to cure people who cannot afford them.Both Congress and the public will want to know your company'sanswer.

You may wish to use the Hosmer problem solving model (or any other model) in analyzing the issues.