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Lecture 4

ADM 1101 Lecture Notes - Lecture 4: Corporate Social Responsibility, Onchocerciasis, Prescription Drug


Department
Administration
Course Code
ADM 1101
Professor
Kevin Petit- Frere
Lecture
4

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Lecture Notes Session 4
Social Context of Business
3/10/2016
Summary:
Merck is a drug development and manufacturing company that focuses on producing drugs for the
main purpose curing illness and focuses on the needs of humanity before the desire for profit.
Merck created and manufactured a drug to cure river blindness in Africa, and since they did not
receive any clients interested in purchasing the drug, they decided to manufacture and distribute it
for free for life.
Corporate Social Responsibility is the way that a corporation achieves a balance among its
economic, social, and environmental responsibilities. There are various arguments for and against
CSR, though CSR is a widely accepted and expected characteristic of business. There are 3 different
views refering to CSR: Amoral, Personal, and social views. Every corporation classifies as either a
program or as an approach. As with anything business related, there are also barriers to CSR.
Important Questions Lecture Notes
What makes Merck different
from regular corporations?
Should Merck Invest in a
drug that might not generate
profit, but will benefit
millions of patients?
Corporate Social Responsibility:
Merck
Whether they would invest or not in the drug for “river
blindness”
85 Million at risk of the disease. 3rd world countries.
Disease bad in some regions in Africa.
Merck
One of the largest prescription drug companies.
Dependent on two products under patient protection.
(That were about to expire)
Motto “We try never to forget that medicine is for the
people. It is not for the profits. The profits follow, if we
have remembered that, they have never failed to
appear.”
Took 12 years and 200,000,000$ to bring a drug to
market.
Research
Test
Patient Protection
Approval
Not a guarantee of success. (May not work)
Issue: rare diseases/poor consumers - Cannot make a
lot of money.

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Who are the stakeholders of
Merck developing the drug
and bringing it to market?
Should Merck give away the
drug for free if they can’t
sell it? Why or why not?
What is Corporate Social
Responsibility?
Ivermectin: treats animals with wide range of
parasites.
Decision risk: What is the adverse health effects? What
about the black market? What if they don't pursue -
What would that do to morale?
If you were the researcher, would you fund the research toward a
treatment for the disease?
Stakeholders:
Shareholders, Inflicted, employees, the government's,
the media, distributors, competitors ect.
What actually happened: They did approve the drug.
Bettered the employee's moral
Furthered their knowledge into parasitology.
Someone would come forward with funds.
Government, private funds, NGO’s.
Stakeholders would pitch in.
Challenge: Issues getting the drug to the people
that need it.
Shaky corporation with WHO, lots of Skeptics.
On the hunt for 3rd party buyers. NO takers.
Life saving drug, but no buyers or to distribute
it.
Should Merck give the drug away for free?
How to get the drug to as many as possible?
Brand image/good will, Donation tax is
deductable.
Worries about precedent, although mostly
positive.
How do distribute the drug?
Remote villages of the infected.
How would it operate?
They would give it away for free.
Developed a distribution program - Highly
respected experts in the field.
1 pill per year that treats river blindness.
Goal of eliminating river blindness by 2020.
Trained lots of volunteers.
Corporate Social Responsibility
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