Doing well while fighting river blindness: the alignment of a corporate drug donation programme with responsibilities...

Using the example of Merck's donations of ivermectin, to show how tax incentives and non-profit collaborators can make corporate largesse consistent with obligations to maximise returns to shareholders.

We obtained information from publicly available data and estimated Merck's tax deductions according to the US Internal Revenue Code. Reviews of Merck-Kitasato contracts and personal interviews provided additional information regarding key lessons from this collaboration.

Our best estimate of the direct cost to Merck of the ivermectin tablets donated during 2005-2011 is around US$ 600 million, well below the stated value of US$ 3.8 billion. Our calculation of tax write-offs reduces the net cost to around US$ 180 million in that period. Indirect market benefits and effects on goodwill further enhanced the compatibility of Merck's donation programme with the company's profit-maximising objective. The case offers lessons for effective management of collaborations with public and non-profit organisations.

Merck's role in the donation of ivermectin for the treatment of onchocerciasis is widely and justly acknowledged as a prime example of corporate largesse in the public interest. It is nevertheless important to note that several public and non-profit collaborators, and United States taxpayers, played significant roles in increasing Merck's incentives, and indeed ability, to conduct the donation programme that changed so many lives in poor countries, while meeting its responsibilities to shareholders. Overall, the record indicates responsible corporate management of Merck's ivermectin programme and demonstrates the feasibility of socially responsible policies in a manner compatible with obligations to shareholders.