Brand and River Blindness

Stake for Vagelos as chief operating officer and for Merck as a company in deciding whether to invest in Dr. Campbells idea Although Dr. Campbells idea of a drug (Ivermectin) that could resume River blindness was a path-breaking opportunity for Merck, the company was faced with a number of ethical, financial and moral issues that forced its CEO to undergo deep design and contemplation before investing in this idea. * Feasibility There were concerns close the use of this drug on humans and the potential adverse expression effects, if any. High Costs The high costs associated with explore and development coupled with the fact that the drug was to be used by lower income groups meant that it showed inadequate or no economic promise. * Cannibalization From a pure business standpoint, Merck overturned that this drug could cannibalize profits from the animal version of the drug by the creation of possible black markets in the affected countries. Percentage of research budget that Merck should invest in drugs that forget produce a nonstandard return on investmentAs a company that produces drugs to cure diseases in twain humans and animals, Merck operates in a complex dynamic that requires it to take decisions that whitethorn not lead to favorableness. Further, its unified philosophy always revolved almost the fact that the companys first priority was the pencil eraserty of state and only then did profits follow. I, therefore, believe that Merck should invest a giving amount ( 80%) of its research budget even on drugs that willing produce a substandard ROI, provided the drugs promise to fully cure diseases without pestiferous side effects and they are the first in the market to do so.This could help them build a sanitary brand equity, goodwill and report card in the long run thereby creating a foundation for profitability in future. For instance, I believe that Merck has a social responsibility and a moral obligation to invest heavily in the cure for River blindness. Mercks explanation to a shareholder who might complain about a decision to invest in research on River blindnessMerck could use the chase points to strengthen its decision to invest * Improves image of the company The decision will lead to a positive impression about the management and its freight leading to high brand equity and good reputation, resulting in future profits. * Improves employee productivity Working towards a philosophy that the company consistently stands for will motivate employees and lead to higher job satisfaction thereby change magnitude employee productivity and hence profits. Attracts support from investors and society The decision could be a significant differentiating factor. This coupled with superior brand image could generate investor fire and support from the community. It could also be used as a trade tool. Mercks selection of drugs to invest in As stated earlier, Merck must(prenominal) strive to achieve a balance between pr ofitability and corporate social responsibility.The following criteria could be used to make decisions * Definite and safe treatment The drugs have a strong potential to result in safe treatment to life-threatening diseases, without harmful side effects. * First promoter advantage Merck must invest in drugs that give it a strong advantage to develop patents and move into market spaces that are unexplored by other drug companies. * Profitability While it must remain line up to its corporate philosophy, it must also target profitability to sustain itself and claim its position in the industry in the long run.