Merck Case Study

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 discovered the antiparasitic properties of the substance ivermectin. Based on this substance, the drug Ivomec was developed as a drug to fight against dangerous intestinal bugs and insects in bugs. One particular researcher, Dr. William Cambell, noticed a characteristic in ivermectin showing that it might also be able to fight against the parasite that causes the disease onchocerciasis commonly known as river blindness. He reported this observation to the head of Merck research labs, Dr. P. Roy Vagelos.
River blindness is a disease that affects over eighteen million people in Third World countries. It is caused by a parasitic worm carried in a species of flies. Through bites on humans, the larvae of the worm are able to grow under the skin of humans. This leads to severe itching, lesions, and blindness. Currently, over 340,000 people have been blinded by river blindess. The extremely low income level of the victims of river blindness means that the vast majority of victims won’t be able to afford the drug. Additionally, research on the effectiveness of ivermectin in fighting river blindness will be costly, and the potential drug would most likely not pay for itself, never less earn a profit. Vagelos must consider both its