BM2212

Names : Daniza Dadios R. Section BSBA601P Date 03/17/2023

ACTIVITY
Merck
Merck, a major pharmaceutical manufacturer that liked to spread its bets across a range of research
directions and products, faced the most challenging decision of whether to invest primarily in one
research and development line or spread its investments in multiple lines of research.

Merck’s R&D strategy was to bring as many drugs to market as possible. Recently, the firm’s focus
shifted. Rather than developing a range of drugs, Merck has focused primarily on one drug, Keytruda, a
new cancer drug that leverages the patient’s immune system to fight cancer tumors. The drug is already
marketed to treat skin, bladder, and other cancers, but the firm is looking for even more uses.

Merck has expanded its oncology team, doctors who study and treat cancer, from 20 to 100 specialists.
The firm has over 700 clinical trials examining how Keytruda could treat more than 30 types of cancer.
Over half of Merck’s budget for clinical trials is aimed at Keytruda. Merck’s R&D head, Roger Perlmutter,
said to his staff that whatever other projects they are working on, they can stop now because they will
focus on Keytruda.

Not all clinical trials have produced positive outcomes. The drug did not appear to extend the survival of
gastric cancer patients. Still, the general news has been positive. Trials for kidney, brain, lung, and
esophageal cancers have shown positive results. The drug sales have been growing rapidly, making up 9
percent of Merck’s sales in 2017, and are projected to make up nearly 20 percent of the firm’s sales in
2019, $8 billion in sales for one drug alone. Even with its success, some wonder if Merck is investing too
heavily in this one patented drug

Answer the following questions: (4 items x 10 points)

1. Which between Milton Friedman’s and Archie Carroll’s views on business responsibility is being
demonstrated in the given case? Explain your chosen view.
I think the business responsibility that was being describe here is Milton Friedman’s view’s since
it was stated in the introduction that Merck was having two head of whether to focus on one
Research and Development or to spend investments on the multiple lines. On the other hand,
the firm’s focus shifted. Rather than developing a range of drugs, Merck has focused primarily on
one drug, Keytruda, a new cancer drug that leverages the patient’s immune system to fight
cancer tumors. The drug is already marketed to treat skin, bladder, and other cancers. Which
only means that Merck and his team decided to choose being profitable as long as they are
following the rules and regulations without deception or fraud they choose to stick on Keytruda
than to conduct experiment on how they can improve medicine for the people who have gastric
cancer patients because they choose not to investments in multiple lines of research, since they
are already earning on one drugs already which is Keytruda.
2. Who are the primary stakeholders of Merck based on the case study?
Customer, because the company did not develop range of drugs that can be cure to all types of cancers like
gastric cancer so the customer is affected because the Keytruda is not working for some patient who have
cancer like gastric so they are affected as customer because the drugs is not develop enough to help them
cure the exact cancer that they have because the drugs its self is not really for their case.
3. Who are the secondary stakeholders of Merck based on the case study?
Trade Associations because it doesn’t matter if Merck team continue to develop drugs or not they can still
earn and continue to trade but since the goal of the Company change they can only trade one product
which is Keytruda. Unlike if they continue to develop drugs for cancer the trade association might have so
may tradeoffs.
4. How do the stakeholders of Merck influence the strategic decisions of the company?
I think it impacted strategic decision of the company when the team decided to focus on one drug which is
Keytruda, maybe they decided to have one drugs for a lesser problems and lesser cost since being involve in
research in development required billions or millions of cost just to make a trial and error for drugs its quite
clever for the team and operation, but still for me its okay for them to stick in one since its already giving
them a high percentage of sales than prioritizing RD that is now or never.

Rubric for grading:

CRITERIA PERFORMANCE INDICATORS POINTS

Content Provided pieces of evidence, supporting details, and 8

factual scenarios

Organization Expressed the points in clear and logical arrangement of 2

of ideas ideas in the paragraph
TOTAL 10

Reference:
Witcher, B. (2020) Absolute Essentials of Strategic Management. New York. Taylor & Francis Group Ltd.

04 Activity 3 *Property of STI

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