Curem Pharma
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In the mid 1970s, the population of certain countries in central Africa suffered from a malady called Rivers Disease. The disease, which threatened 80 million people, had already victimized almost 20 million of whom 600,000 had become blind. In fact, the disease was so common, that children in the affected countries assumed that as they aged they would become ill and then blind. The process was thought to be just another part of “growing up”.
The scientists at one large international pharmaceutical company (Curem) believed that a veterinary compound that was in the final stages of pre-production testing might have applicability to Rivers Disease. While significant research would be required, scientists at the company were reasonably confident they could produce a drug that would relieve the early symptoms of the disease (itching so severe that it occasionally resulted in suicide) or possibly even provide a cure. The task, however, would require a budget of $20 million annually (approximately 2% of total research expenditures) which would be spent over a seven to eight-year period. In addition, any success in the research program would require significant additional expenditures to pay for extensive testing which would be part of a possible submission to the FDA.
Even if successful — and there was no guarantee of success — the drug would have no applicability outside of a few poor countries in remote areas of Africa. Unlike other medications that are typically used in many parts of the world and can, therefore, have poor populations subsidized by more affluent ones, Rivers Disease was limited to a large Central African region remote from the rest of society.
As Executive Vice President of Curem Pharmaceutical, Curt Berg has been given the responsibility of making the decision as to whether or not the research should be undertaken. Various governments and private foundations had already been contacted and all had declined to help fund the project. As no modern infrastructure existed in the affected countries, it was even conceivable that Curem might not find a third party able to administer the drug directly to the victims even if the research should prove successful. In short, the company had the opportunity to invest a large amount of research money in the hope of creating a product that had no present distribution channels and was designed for a patient population with no apparent ability to pay for even a small portion of the products cost.
As Curt contemplates his decision, he is well aware of his responsibility to shareholders to maximize returns. On the other hand, there are all of those sick people who have no other realistic hope of a cure. For the first time in his tenure with Curem, Curt asks for a meeting with the firms senior executive committee.