Revision summary
A possible human cure for a tribal liver disease has little market; Rs 50 crore R&D may not be recovered. Stakeholders include patients, the scientist, workers and owners. Suppressing the finding is unethical; unaided spend that sinks the firm is imprudent. The sound path is partnership with government, public science and philanthropy, with a binding access clause. If partners fail, publish for public labs rather than bury the lead or sell it to be shelved.
Model answer
Copper italics in this answer — like this — are the key facts. Each one is unpacked in the Facts & figures rail.
Introduction
A laboratory accident of good news meets a profit-and-loss sheet. Tribal patients have a disease the market will not pay to cure. As CEO I still hold duties to workers, owners, regulators and those patients.
Body
Stakeholders
- Tribal patients with the incurable liver disease, who have almost no purchasing power.
- The scientist who found the lead, and the R&D team.
- Shareholders, lenders and the workforce whose wages depend on a going concern.
- Existing veterinary customers who use drug B.
- The State, ICMR-type public research, and possible public-private partners.
- You as CEO: profit is a duty, not a licence to ignore a preventable death.
Values and issues
- Beneficence and justice: a molecule that could save the poorest should not die only because they are poor.
- Fiduciary duty to the company: Rs 50 crore is not play money if it bankrupts the firm and throws out jobs.
- Transparency: do not hide the finding to protect the veterinary cash cow.
- Intellectual property: a patent can be a tool for partnership, not only a wall.
(a) and (b) Actions with pros and cons
- Option 1: Suppress the finding and continue selling veterinary B only.
- Merit: protects current profit and avoids a Rs 50 crore risk.
- Demerit: conceals a possible human therapy; ethically a betrayal of the scientist’s discovery and of patients. If the fact leaks, reputational ruin.
- Option 2: Fund the full human R&D from company cash alone and price the drug for a tribal market that cannot pay.
- Merit: maximum moral clarity if the science works.
- Demerit: may sink the firm, halt other useful drugs, and still fail if trials are negative. Heroism that destroys the company helps nobody in year three.
- Option 3: Open a structured partnership: licence or co-develop with government, ICMR, WHO-type programmes, a philanthropic foundation, or a larger firm, with a clear access clause for tribal patients (at-cost or free).
- Merit: shares cost and risk; uses public duty where the market is absent; keeps the company solvent; scientist stays engaged.
- Demerit: slower negotiations; partners may demand control; some profit is given up. Still the least bad mix of justice and prudence.
- Option 4: Ask the State for an advance market commitment, tax incentive, or orphan-disease style grant, while publishing the lead so that others may also try.
- Merit: honest science; public money for a public need; aligns with the National Health Mission logic of serving the poor.
- Demerit: political delay; competitors may free-ride. Free-riding is acceptable if patients live.
- Option 5: Sell the molecule outright to the highest bidder with no access condition.
- Merit: immediate cash, perhaps more than Rs 50 crore.
- Demerit: the buyer may shelf it (a veterinary rival) or price it as a luxury. Patients remain untreated. I would not choose this without a binding access covenant.
- Option 6: Create a not-for-profit subsidiary or patent pool for the human variant, keeping veterinary B as the commercial engine.
- Merit: ring-fences risk; states a public purpose; staff can see the firm’s character.
- Demerit: governance complexity; still needs external money.
What I would do
- Do not suppress. Thank the scientist, protect the data, and take the finding to the board as a duty item, not as a hobby.
- Seek co-development and public or philanthropic finance first; put tribal access in the contract.
- Keep veterinary production ethical and separate: do not raise animal-drug prices to secretly fund a vanity project without disclosure.
- If every partner refuses and the firm cannot bear Rs 50 crore, publish enough for public laboratories to try, rather than bury the light.
- Measure success as patients on a safe therapy, not as a press conference.
Flow diagram
flowchart TD FIND[Veterinary B human lead] --> NO[Do not suppress] NO --> PART[Public private philanthropic co-develop] PART --> ACC[Access for tribal patients] SOLO[Solo Rs 50 crore] --> RISK[Firm failure risk] SELL[Sell with no covenant] --> SHELF[Shelf or luxury price]
Conclusion
The market will not pull a tribal liver cure by itself. Suppressing the lead is the worst act. Solo bankruptcy is not required. As CEO I would partner, bind access, and if need be give the science to the public system — profit as a going concern, not as a veto on the poor.
Quick related
Students also ask
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Case study. There is a disaster-prone State having frequent landslides, forest fires, cloudbursts, flash floods and earthquakes, etc. Some of these are seasonal and often unpredictable. The magnitude of the disaster is always unanticipated. During one of the seasons, a cloudburst caused devastating floods and landslides leading to high casualties. There was major damage to infrastructure like roads, bridges and power generating units. This led to more than 100000 pilgrims, tourists and other locals trapped across different routes and locations. The people trapped in your area of responsibility included senior citizens, patients in hospitals, women and children, hikers, tourists, ruling party's regional president along with his family, additional chief secretary of the neighbouring State and prisoners in jail. As a civil services officer of the State, what would be the order in which you would rescue these people and why? Give justifications.
Next question on this syllabus topic (2015 · Q10). View answer →
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Is a private CEO obliged to become a charity?
The CEO is not obliged to bankrupt the firm. The CEO is obliged not to hide a cure and to seek public and partner routes that keep both patients and jobs alive.
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Why not just raise the veterinary price to fund human trials?
Secretly taxing animal-keepers without disclosure is another injustice. Funding must be open and shared, not a hidden levy.
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