Merck Case

Merck, headquartered in Rahway, New Jersey, is a major global producer of prescription drugs.
In 1978, it employed over 28,000 people and generated approximately $2 billion in annual sales.
The company had a culture focused on creativity and innovation in pharmaceutical research.

Disease Description: River blindness (onchocerciasis) is caused by the parasitic worm, Onchocerca volvulus, transmitted by the black fly.
Impact: Affects millions in the Third World; approximately 340,000 people were blind due to the disease in 1978, with over 18 million infected.
Symptoms: Severe itching, skin lesions, and eventual blindness; social and economic impacts included food shortages and family disintegration.
Historical Context: Labeled a significant public health problem by the WHO; prior treatments had severe side effects or were ineffective.

Historical Investment: Between 1975 and 1978, Merck invested nearly $1 billion in research.
Key Drugs Developed: Successful releases included Clinoril (painkiller), Mefoxin (antibiotic), and Ivomec (initially for animals).
Research Strategy: Encouraged creativity among scientists; projects reviewed extensively with a mix of analysis and interpersonal discussion.

Economic Viability: Many potential drugs had minimal financial return, particularly targeting diseases of poor populations.
Legislative Efforts: Proposed U.S. orphan drug program aimed to incentivize research for rare diseases affecting fewer than 200,000 Americans.
Lack of Incentives: No similar programs existed for widespread Third World diseases.

Research Origin: Began with soil samples from Japan; led to the discovery of avermectin and its antiparasitic properties.
Potential Beyond Animals: Dr. Campbell hypothesized the efficacy of ivermectin on river blindness, given its effects on a similar parasite in horses.
Development Decision: Merck faced tough choices regarding investment for human treatment, weighing risks against potential human benefits.

Potential Risks: Concerns over the drug’s safety in humans could damage its veterinary reputation; misuse in Third World settings posed additional questions.
Morale and Corporate Philosophy: Vagelos considered the impact of denying Campbell's proposal on company morale and the larger mission to alleviate human suffering.