Read WTO case study: "Patents, parallel importation and compulsory licensing of

HIV/AIDS drugs: the Experience of Kenya

View film excerpt: "Fire and Blood"

Your management team is part of a pharmaceutical company that has been

subpoenaed by Congress to testify about the company's decision to oppose the

granting of compulsory licensing by the World Trade Organization to Kenya with

respect to HIV/AIDS drugs developed and manufactured by the company. A

compulsory license would permit a major Indian pharmaceutical competitor the

right to manufacture a drug patented by your company and sell it at a fraction of

the price in Kenya and possibly in other countries as well.

Your company incurred hundreds of millions of dollars in research and

development costs to produce this anti-viral drug and now it stands to lose a great

deal of money in the manufacture and sale if the patent exception and compulsory

license is granted. The shareholders will most certainly be angered over the year-

end profit and loss statement. The publicity has also cast your company in a

negative public image. It is expected that the company's advertising expenses will

be substantial to restore its family oriented reputation.

Your company was also on the brink of developing a serum to cure Ebola but has

had second thoughts given the problems in Kenya. The newspaper coverage has

already created a "no-win" situation for your company:

"Ebola Cure Not Fully Developed Because Big

Pharma Not Interested In Saving Lives Of Poor

People In Africa

https://www.techdirt.com/articles/20140805/18174628123/ebola-cure-not-fully-

developed- because-big-pharma-not-interested-saving-lives-poor-people-

africa.shtml

As you may have heard, there's been a somewhat scary Ebola outbreak in western

Africa. You may have also heard about what some are calling a "secret miracle

serum" that effectively stops the impact of the virus for those who catch it. It's an

experimental drug that hasn't undergone human clinical trials yet, but it was

apparently given to a couple of Americans and appears to be working. There's

some indication that it would take a couple months to produce a larger number of

doses -- though, again, the lack of testing here means that people really aren't sure

if it will work (or if there are serious side effects)

That said, as one article notes, a big reason that there hasn't been much testing on

this is because treating poor people in Africa just isn't very profitable for the drug

companies:

"These outbreaks affect the poorest communities on the planet. Although they do

create incredible upheaval, they are relatively rare events," said Daniel Bausch, a

medical researcher in the US who works on Ebola and other infectious diseases.

"So if you look at the interest of pharmaceutical companies, there is not huge enthusiasm

to take an Ebola drug through phase one, two, and three of a trial and make an Ebola

vaccine that maybe a few tens of thousands or hundreds of thousands of people will use."

While some may question whether or not Bausch's statement is just from frustration from

where he is, Big Pharma execs more or less confirm his claims. Remember that it was

just a few months ago that we wrote about Bayer's CEO claiming directly that they make

drugs for rich people who can afford it:

Bayer Chief Executive Officer Marijn Dekkers called the compulsory license "essentially

theft."

"We did not develop this medicine for Indians," Dekkers said Dec. 3. "We developed it

for western patients who can afford it."

As we noted at the time, it's worth comparing that statement to what George Merck, the

former President of Merck said many decades ago concerning the pharma industry:

We try never to forget that medicine is for the people. It is not for the profits. The profits

follow, and if we have remembered that, they have never failed to appear. The better we

have remembered it, the larger they have been. "

Your management team has been assigned the job of drafting a memorandum

identifying the problem; evaluating the different stakeholder viewpoints

;

and, proposing a

solution or alternative solutions to the problem. The memo will be used as the basis for

the company's testimony before Congress. You must also address whether, in the future,

the company will be willing to develop expensive drugs that will be used primarily to

cure people who cannot afford them. Both Congress and the public will want to know

your company's answer.

You may wish to use the Hosmer problem solving model (or any other model) in

analyzing the issues.

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