Merck Case Study
There are two cases – Merck A and Merck B. The time is set at the time of the case around 1987, any perspective you take should be taken from that time perspective. Merck part A addresses Merck’s decision on whether or not to develop Ivermectin into a drug that could treat river blindness. Merck part B addresses the decision on whether to proceed with donation and distribution of the drug.
The topic to consider is whether Merck should develop, donate (for free) and exclusively distribute Mectizan even if it incurs cost?
This is a case covers leadership, organizational behavior, corporate strategy, product development, marketing and CSR that will hopefully give you real context for why or why not a company should pursue a particular strategy and what the benefits and costs of doing so are. Any opinions should be grounded in real numbers and analysis of what a plan would be what and why it will be successful and acknowledge any dangers and risks.
Case Questions:
1. Identify 5 major stakeholders in the case – identify their roles in the case. Outline 5 factors Dr. Vagelos should consider when deciding whether to invest in development and further consider a plan to donate / distribute Mectizan.
2. In considering whether to donate Mectizan – who would be the key partners in a donation strategy. Detail what you believe are the benefits to Merck and the possible dangers of giving Mectizan away for free?
3. Recreate financial income statement in excel until 1990 (from 1967, by year), you will need to make some assumptions – please note these in bullet points. Analyze the strategic decisions related to development, donation, distribution and the strategic options from a financial perspective of the proposed costs for Merck’s plan given Merck’s current financial situation.
4. Outside research: are there any precedents for goodwill, corporate social responsibility on the scale Merck is considering? Cite 1 case that your team believes is relevant for Merck’s management to consider. Do companies such as pharmaceutical companies have moral obligations that differ from other firms? Provide brief support for your stance.