Case2 (adapted from Trevino and Nelson, 2017)
It takes about €180 million in research and 12 years to bring the average drug to market. Pharmaceutical companies need to know that they will make sufficient profit on their investment.
You are a senior executive for a multinational pharmaceutical company. The company has identified a particular drug as a possible cure for a particular form of blindness across several sub-Saharan African countries, caused by a rare species of parasite. The drug is shown to kill a similar species in other animals, but more research is needed to determine the safety and effectiveness of the drug in humans. This will cost hundreds of millions of Euro, as well as years of research and the expertise of several scientists. However, since the disease affects some of the poorest countries in the world, the company is likely to make zero profit.