Welcome to the first module of Global Business Ethics and Corporate Responsibility.
We're going to bring back the question we raised in the welcome,
is ethics part of business?
You'll remember there that I argued that ethics is
intimately part of business that you can't separate ethics and business apart.
It just doesn't work because we're dealing with people.
But now, we're going to deal with a case about Merck and a disease called
River Blindness that really challenges
this company to think about who they are and what they're in business to do.
Merck, as you probably know,
is a very large American multinational pharmaceutical company.
It focuses only on drugs and it has a series of very successful drugs.
One of their most successful was a drug to deworm animals.
Now, many of you have had pets,
so you know the problem.
Merck was the first company to come out with
a drug that actually worked deworming animals.
Interesting really though, one of their researchers said,
"Now, wait a minute.
If this drug works for deworming animals,
I think it will work for a disease called River Blindess."
Well, what is River Blindness?
Nobody at Merck had any idea.
River Blindness is a disease that strikes
between 40 and 100 million people in the very most remote places in the world.
Places where there are no even cell phones,
imagine, places where you have to go in by canoe,
where you have to walk,
where there really aren't roads,
where people are illiterate,
where they speak a language no one understands, living in tribes.
They're very, very poor,
very remote and this disease is really awful.
So I'm going to describe it to you.
I hope it's all right if you understand that.
This disease is caused by flies that bite you usually in the arm and
then they implant a worm and the worm multiply and it just itches terribly.
By the time you're 40, you're blind.
It's thought to be common.
Well, a third of the people in a community will assume they're going to go blind.
It's a very, very terrible disease and a very prevalent disease in the developing world.
So Merck's best researcher said,
"I want to develop this drug because I think we can help these people," but the cost of
developing a drug is between $10 million and $100 million, maybe more,
we never know, and you have to test the drug with human beings to see if it
works before you can put it on the market and worse it takes about 10 years to develop.
So the question Merck faced was,
should they develop this drug?
The reason that was a question was this drug is unknown in most of the developed world.
Many of you who are listening have never heard of this disease, sorry.
Certainly, you haven't heard of the drug,
and so you think this is weird.
I've never heard of this, why not?
The reason why is we have managed to eradicate
the deadly flies that cause it but in the developing world,
we haven't been able to.
Now, the World Health Organization tried.
They put hundreds of million dollars in fly eradication.
Well, frankly if you think about grades they got
a very low grade in that because no fly die frankly.
The ones that didn't reproduced.
So they're still always flies all over the place.
Now, the question is, should Merck invest in research to develop and test this drug
or should it use those same funds to develop
other drugs like for cancer or HIV or arthritis?
Diseases that we all have and that actually we pay for or our insurance pay for.
So what should they do?
Let's say that they're going to take the money and have parties.
Well, that would be nice, but they're not.
They're going to do something worthwhile but should it be in a drug for which there are
no paying customers or patients or clients or what it could do,
of course, is give the right to develop this drug to
some nonprofit organization and let them develop it.
Now, what are the issues here?
Developing the drug is obviously expensive and then it might not
work and it might harm
people in human trials and you know what happens when that happens.
You go right on the front pages and right in the media.
Social media will love it because it will be a very bad publicity.
If they don't develop the drug,
somebody's going to find out.
There are no secrets. They're going find out and say
Merck could have done this and they didn't do it.
They'll be very also low morale for the researchers who really believe
in this drug and believe that Merck is in the business to help cure disease.
So they're going to miss an opportunity and I'm not sure what it is.
Well, they could give the rights to another organization as I
mentioned but Merck would lose
its patent on the deworming animals drug and
that is an extraordinarily profitable and they don't want to do that.
So the question is,
what is the right thing to do?
Should Merck develop the drug or give it away?
Should they develop another lifesaving drug for paying customers?
How could Merck be both virtuous and profitable?
So if you think about this,
what are the rights of those people with River Blindness?
Do they have any rights?
Do those rights trump shareholder rights for return on their investments?
What's the most fair?
Think about it, 40-100 million people,
that's a lot of people.
How do you treat them fairly?
So think about those questions and post those on the forum.
One little problem here Merck discovered or maybe it's a good thing.
That is Merck's vision.
The grandfather of the founder of Merck, Merck,
I forgot to tell you is a very old company,
over 100 years old.
The founder said once,
"We're in the business to cure disease.
We're in the business to help people.
If we do that,
the profits have always followed and the better we do that,
the more profitable we have been."
After the Second World War,
when Merck was one of the first pharmaceuticals to develop penicillin,
he gave that penicillin away to the Japanese who were in
terrible economic trouble after
the war as well as of course were the Germans and all of Europe.
It gave away those drugs.
No one has ever forgotten that.
So Merck always gets a lot a lot of clients because of
that early entrepreneurial and very philanthropic gesture that they did.
So what should Merck do?
So I want you to think about that and I want you to
develop arguments so you can defend your decision.
It won't do just to say,
oh, I think Merck should help these people.
That's lovely, that's a nice thing
but if you think about going into your managers and say,
I just think we ought to do that, won't work.
You have to have good arguments and that's what we're going to work on.
Patricia WerhaneVisiting Professor
