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
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
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Next question in the 2015 paper (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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