1. What are the ethical issues in this situation? Which issues must Berlex consider first when determining how to distribute Betaseron?
2. Given the shortage of the drug, how should Berlex decide who receives it and who waits? Give a specific plan.
3. How should Berlex handle the logistics of distribution?
4. How should Berlex determine the drug’s relative pricing (assume the drug costs about $12,000 per year)?
5. Who, if anyone, should be involved in the decision making?

The United States Food and Drug Administration’s (FDA) approval of interferon beta- 1b (brand name Betaseron), made it the first multiple sclerosis (MS) treatment to get FDA approval in 25 years. Betaseron was developed by Berlex Laboratories, a U.S. unit of Schering AG, the German pharmaceutical company. Berlex handled the clinical development, trials, and marketing of the drug, while Chiron Corporation, a biotechnology firm based in California, manufactured it. The groundbreaking approval of Betaseron represented not only a great opportunity for Berlex but a dilemma. Supplies were insufficient to meet initial demand, and shortages were forecast for three years. With insufficient supplies and staggering development costs, how would Berlex allocate and price the drug?