Template for a Case Analysis
• Summarize the facts of the case.
• State the central ethical issue(s).
• Develop an ethical analysis of the case.
– Identify available options.
– Apply ethical ideas and principles to evaluate the options and
select (and defend) the one that is best.
• Use Freeman’s stakeholder approach to the analysis, but indicate the
difference(s) there would be if you used Friedman’s shareholder
approach.
• Use 2 of the big 3 ethical theories – Kant, Utilitarianism, Rawls.
• Use other ideas and principles from the course readings as appropriate,
e.g., Donaldson might be useful in a global business case, or Baxter in
an environmental case.
– If the actual outcome of the case is known, compare it to the
option selected.
• Conclude by summarizing your answers to the central
ethical issues.
Merck Case − Facts
• River blindness was a wide-spread problem in
poor countries, and it had no effective treatment.
• Scientists at Merck accidentally discovered that an
anti-parasite drug for animals was effective
against a parasite similar to the one that causes
river blindness in humans.
• Developing and testing a human version of the
drug would cost a large amount of money.
• The target countries could not afford the drug if it
was developed.
• Merck had a tradition and culture of placing
people before profits.
Merck Case – Central Ethical Issue
• Should Merck spend money to develop a drug that
will
– reduce the suffering and prolong the lives of millions of
poor people in third world countries, but
– for which there is little prospect for recovering their
costs and making a profit?
Merck Case − Options
• Develop the drug,
– Either at a loss, or
– Subsidized by profits from other Merck products, e.g.,
the animal version of the drug.
• Forget the drug.
• Turn the preliminary findings over to the World
Health Organization or some other UN agency
that could then fund it through charitable
contributions to the UN.
• Other?
Merck Case − Stakeholders
• Merck shareholders who generally want growth in stock
value and/or dividends.
• All of the people who would be saved from river
blindness.
• World-wide humanitarian agencies that have tried to bring
relief to river blindness victims.
• The countries in which river blindness occurs.
• Others?
Merck Case − Friedman’s View
• At first glance, it seems Friedman would say no.
– Profit motives would appear to favor forgetting about
the human version of the drug.
– There do not appear to be any legal issues in doing so.
• But at second glance, Friedman might say yes.
– There could be huge anti-Merck social sentiment if
Merck did nothing and people found out about it.
– The positive reputation and PR from developing the
drug might actually lead to extra profits for Merck. A
Merck Case − Stakeholders
• Kant
– Reversible? Merck management needs to put itself in
the shoes of the river blind.
– Respect for persons? Abandoning millions of people to
an agonizing future simply to increase profits treats
them as means only.
• What of the options?
– Can’t forget about it.
– Could turn preliminary findings over to UN.
– Could develop the drug.
Merck Case − Utilitarianism
• Sum benefits and consequences across all
stakeholders and chose the one with greatest net
benefit for all.
– Can’t forget about the drug.
– Turning preliminary findings over to UN is marginal.
– Developing the drug maximizes net benefit.
Merck Case – Davis’ 7 Steps
• Use Michael Davis’s alternative framework –
– Less harm? (aka Utilitarianism)
– Publicity -- especially given Merck’s public stance on
serving people?
– Defensibility without appearing self-serving? (aka
Rawls)
– Reversibility (what it you lived there)? (aka Kant)
– Organization’s values and culture?
– Demands of virtue?
Merck Case – Final Outcome
• Merck developed the drug with full expectation of
not recovering its investment.
– Turned out to require one pill per year.
• Moreover, Merck paid to develop the distribution
system.
• Compare this outcome to the selected option.