Merck - River Blindness

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Merck and Co. and river blindness

MANUEL VELASQUEZ, Business Ethics. Concepts and cases 4th edt., Prentice Hall, Upper Saddle River, New Jersey, 1998

River blindness is an agonizing disease that affects some 18 million impoverished people living in remote villages along the banks of rivers in tropical regions of Africa and Latin America. The disease is caused by a tiny parasitic worm that is passed from person to person by the bite of the black fly which breeds in river waters. The tiny worms burrow under a person's skin where they grow as long as two feet curled up inside ugly round nodules half an inch to an inch in diameter. Inside the nodules the worms reproduce by releasing millions of microscopic offsprings called microfilaria that wriggle their way throughout the body moving beneath the skin, discoloring it as they migrate, and causing lesions and such intense itching that victims sometimes commit suicide. Eventually, the microfilaria invade the eyes and gradually blind the victim.

Spraying pesticides to eradicate the black fly faltered when it developed an immunity to the pesticides. Moreover, the only drugs available to treat the parasite in humans have been so expensive, have such severe side effects, and require such lenghty hospital stays that the treatments are impractical for the destitute victims who live in isolated villages.

In many countries people have fled the areas along the rivers, abandoning large tracts of rich fertile land. Many of them, however, eventually return because distant lands prove difficult to farm.Most villagers along the rivers come to accept the nodules, the torturous itching, and eventual blindness as an inescapable part of life.

In 1979, Dr. William Campbell, a research scientist working for Merck and Company, an American drug company, discovered evidence that one of the company's best-selling animal drugs, Ivermectin, might kill the parasite that causes river blindness. Closer analysis indicated that Ivermectin might provide a low cost, safe, and simple cure for river blindness.

Campbell and his research team therefore petitioned Merck's chairman, Dr. P. Roy Vagelos, to allow them to develop a human version of the drug which up to then was used only on animals.

Merck managers quickly realized that if the company succeeded in developing a human version of the drug, the victims of the disease were too poor to afford it.

The medical research and large-scale clinical testing required to develop a version of the drug for humans could cost over $100 million. It was unlikely the company could recover these costs or that a viable market could develop in the poverty-stricken regions where the disease was rampant. Moreover, even if the drug was affordable, it would be virtually impossible to distribute it since victims lived in remote areas, and had no access to doctors, hospitals, clinics, or commercial drug outlets. Some managers also pointed out that if the drug had adverse side effects when administered to humans, ensuing bad publicity might taint the drug and adversely affect sales of the animal version of the drug which were about $300 million a year. The risk of harmful side effects was heightened by the possibility that incorrect use of the drug in underdeveloped nations could increase the potential for harm and bad publicity.

Finally, if a cheap version of the drug was made available, it might be smuggled to black market and sold for use on animals thereby undermining the company's lucrative sales of Ivermectin to veterinarians.

Merck managers were undecided what to do. Although the company had worldwide sales of $2 billion a year, its net income as a percent of sales was in decline due to the rapidly rising costs of developing new drugs, the increasingly restrictive and costly regulations being imposed by government agencies, a lull in basic scientific breakthroughs, and a decline in the productivity of company research programs. Congress was getting...
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