The Merck River Blindness Case: Should a Company Give Away a Cure? (Friedman vs. Freeman)

In 1978, Merck discovered that a drug it had developed could cure river blindness, a disease that had blinded millions of the world's poorest people. There was just one problem: the people who needed it could not pay, and no government or agency would fund it. Should Merck spend millions developing a drug that might never earn back a dollar? And if it worked, what then? This case walks through one of the most instructive decisions in business history and uses it to open a question that sits underneath all of management: to whom is a leader responsible, and how do they decide? We work through both answers, Milton Friedman's shareholder view (the social responsibility of business is to increase its profits) and R. Edward Freeman's stakeholder theory (a firm is responsible to everyone it affects), then test them against what Merck actually chose to do. Built for MBA and upper-level undergraduate courses in business ethics, leadership, strategy, and corporate social responsibility. Instructors are welcome to use this in their own classes. Discussion question: If Merck's donation had simply cost money forever, with no payoff, would the decision still have been right? Case facts drawn from Weiss & Bollier, "Merck & Company, Inc.: Having the Vision to Succeed," and the Mectizan Donation Program's published history. #BusinessEthics #Leadership #StakeholderTheory #MiltonFriedman #CSR #MBA