Introduction to the Case First established in 1668 in Darmstadt, Germany, Merck is currently (in 1978) one of the largest prescription drug producers in the world. After coming off a 10 year drug drought in the late 1970s, Merck put a large amount of money into research to continue its dominance in the prescription drug industry. The research-first approach worked and since then Merck has increased sales significantly. Merck’s mission was well stated by founder George W. Merck. “We try never to forget that medicine is for the people…not for the profits” (Bollier 3).
Merck researchers have been investigating soil deposits from the Kitasato Institute in Japan looking for naturally occurring antibiotics. In this research they
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Fully disclosing the situation, rather than burying it, and sharing research with the competition would be difficult, but it would prevent a media disaster for the company. On the other end of the spectrum there is the option to develop the drug and to distribute it for free. There are certainly financial “cons” to this option. Merck would lose a significant amount of money to bring the drug into development. While the cost would probably be less than the average cost of $200 million dollars, the loss would still be considerable. Distribution could also potentially cost the company money unless it was able to find an aid organization or foundation to cover the distribution costs. This could also hurt the sales of Ivomec if there were any complications with the new drug. However, this route would most honor the mission of Merck’s founder George W. Merck. It also is a very charitable option to take, and Merck would most likely receive a lot of positive media attention for this decision. The positive publicity would boost Merck’s public image and could potentially pay for itself in the long term by convincing new customers to come to Merck. A final alternative is to develop the drug and sell it at production price. Because the victims of the disease would be unable to afford the drug, another method of payment would have to be established. I would recommend pairing with a