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Stanford Social Innovation Review 518 Memorial Way, Stanford, CA 94305-5015 Ph: 650-725-5399. Fax: 650-723-0516 Email: [email protected], www.ssireview.com Case Study Sharing Power How Merck and the WHO have sustained a fragile balance of power in their battle against river blindness By Jonathan B. Levine Stanford Social Innovation Review Spring 2005 Copyright © 2005 by Leland Stanford Jr. University All Rights Reserved DO NOT COPY

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Page 1: Case Study Sharing Power How Merck and the WHO have ... · PDF fileerly dosed the medication, she worried, ... CEO Roy Vagelos formally committed ... CASE STUDY The Mectizan Donation

Stanford Social Innovation Review 518 Memorial Way, Stanford, CA 94305-5015

Ph: 650-725-5399. Fax: 650-723-0516 Email: [email protected], www.ssireview.com

Case Study

Sharing Power How Merck and the WHO have sustained a fragile balance of

power in their battle against river blindness

By Jonathan B. Levine

Stanford Social Innovation Review Spring 2005

Copyright © 2005 by Leland Stanford Jr. University All Rights Reserved

DO NOT COPY

Page 2: Case Study Sharing Power How Merck and the WHO have ... · PDF fileerly dosed the medication, she worried, ... CEO Roy Vagelos formally committed ... CASE STUDY The Mectizan Donation

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BRENDA COLATRELLA,an executive of themultinational pharma-ceutical giant Merck &Co., remembers being

stunned at a meeting back in 1996 by aproposal made by a colleague at theWorld Health Organization (WHO).Since 1987, Merck and the WHO hadbeen partners in an innovative programto eliminate onchocerciasis, a leadingcause of blindness in the developingworld. Merck’s donations of its break-through drug Mectizan, with theWHO’s technical support, had alreadysaved millions of Africa’s poor from thescourge known as “river blindness,”using distribution by mobile drug-deliv-ery teams of health professionals fromnumerous nongovernmental organiza-tions. Though it was an unsustainablemethod in the long run to treat the estimated 120 million people at risk ofcontracting the disease across 35 coun-tries,1 it had been quite successful

over its first nine years of operation.But at the 1996 meeting, in Geneva,

the WHO’s research team was propos-ing a radical and untested delivery strat-egy that Colatrella feared could upset thewhole effort: to let local communitiesselect their own health workers – usu-ally lay volunteers with unproven capac-ity and reliability – to distribute the drugand monitor patient care.

To Colatrella’s Western sensibilities,the proposal was unfathomable. “Itdefied every protocol we lived by, start-ing with the fact that trained physiciansadministered prescription drugs, laypeople did not,” she recalls thinking. “Inearly fell off my chair.” What if thelocal, typically illiterate workers improp-erly dosed the medication, she worried,or failed to accurately record adversereactions? The Food and Drug Admin-istration, to which Merck ultimatelyanswered as a U.S. company, could pullthe plug on the program altogether.

And what if Mectizan seeped into

CASE STUDY

b y J O N AT H A N B . L E V I N E

How can organizations in

public-private partnerships,

with very different cultures

and missions, find common

ground on critical

issues of strategy?

What are the chief

concerns of corporate

donors, and how do they

influence decision making in

public-private partnerships?

When should partners

attempt to exert, cede, or

compromise control over

program decisions?

What are some principles

to guide successful power

sharing in partnerships?

60 STANFORD SOCIAL INNOVATION REVIEW www.ssireview.com

How Merck and the WHO have sustained a fragile balanceof power in their battle against river blindness

SHARING P WER

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G POWER

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CASE STUDY

the black market, find-ing uses it wasn’tapproved for? Any neg-ative impact onpatients’ health wouldbe devastating – andsurely damage Merck’sreputation, turning itsgood intentions into aPR nightmare. Cola-trella glanced across themeeting table at herMerck colleague, Char-lie Fettig, then-seniormarketing director foranti-infectives. She readhis reaction on his face:“No way, José.” He lateradded to her, privately,“This will never fly.”

But fly it did. In fact, over the pastdecade, the WHO’s community-directed treatment (CDT) strategy, pio-neered by the Mectizan Donation Pro-gram (MDP), has become a fixture ofmainstream public health delivery

throughout the Third World. More-over, with its free doses of Mectizan totreat and prevent the blindness-caus-ing eye lesions of onchocerciasis, MDPhas become one of the most laudedpublic health achievements of the 20thcentury for its coverage of an unprece-

dented number of beneficiaries.2

MDP, starting in 1987, was not onlythe first program to give away a pre-scription drug over a sustained period.It also pioneered the now-commoncross-sector partnership model thatforged standards of cooperation betweenprivate enterprise and multiple levels ofpublic organizations. The legendary pro-gram has since spawned an entire indus-try of public-private drug-donation ini-tiatives, from Pfizer’s efforts to combattrachoma, to Novartis’ work in leprosy,and GlaxoSmithKline’s in malaria andlymphatic filariasis.

Yet, for all of the partnership’sacclaim, Merck’s uncharted journeywith the WHO, along with the WorldBank and dozens of NGOs andnational health ministries, has givenrise to a number of conflicts over thelast 18 years that could just as easilyhave shut the program down. Howthese organizations with radically dif-ferent experience and motivationsfound common ground over contro-versial issues such as CDT is a study inthe fragile balance of power sharing. Asin any strong partnership, the successof the MDP is rooted in the art ofknowing when to exert, cede, or com-

62 STANFORD SOCIAL INNOVATION REVIEW www.ssireview.com

Merck executives Brenda Colatrella and Charles Fettig were surprised by the WHO’s plan

to let local health workers distribute Mectizan for river blindness.

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Eye lesions (left) and skin nodules (right) are symptoms of river blindness.

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www.ssireview.com STANFORD SOCIAL INNOVATION REVIEW 63

promise control over critical decisions.Typically, the dynamics have cen-

tered on the response of Merck, as thedonor, to its partners’ occasionalrequests. The ensuing debates over Mec-tizan strategy invariably have tested thecompany’s patience, budget, and policies– just as they frequently left its partnerswondering how long Merck’s “unlim-ited” commitment would last. In hind-sight, a simple guiding principle hasserved the partners well: “If we stayedfocused on the needs of the program,rather than on what was desirable orpolitically convenient for any given part-ner, then the right decisions got made,”says Colatrella, senior director for con-tributions at Merck. But that tenet wouldnot always seem so obvious in the heatof debate.

Eyes on the PrizeFrom the outset, Merck and the WHOhad a strong foundation for coopera-tion. New Jersey-based Merck was oneof the largest and most admiredresearch-driven pharmaceutical com-panies in the world. The Geneva-basedhealth agency of the United Nations,for its part, had a long history in Africaof battling river blindness, caused byparasitic worms, by attacking carrierblack flies with aerial spraying. By theearly 1980s, the WHO had helped Merckset up clinical trials in Africa for iver-mectin, the compound that wouldbecome Mectizan, and their ongoingdialogue about pricing and distributionbuilt mutual respect that would latercontribute to the MDP.3 Merck evenoffered to have the WHO take over Mec-tizan’s entire distribution strategy. Giventhe company’s unfamiliarity with Africa’sremote terrain and limited medical-delivery channels, it was hardly preparedon its own.

But by 1987, when Merck’s then-CEO Roy Vagelos formally committedto donate unlimited supplies of the drug,neither organization felt equipped to go

it alone. “It was the end of the ColdWar, and neither of us wanted to getcaught up in the politics of decidingwhich countries would receive the drug,”Fettig recalls. To field those sensitive

issues, Merck set up the Mectizan ExpertCommittee (MEC), a panel of seveneminent public health and tropical dis-ease authorities. The MEC would adviseMerck on responsible use and distribu-

tion of the drug based strictly on med-ical need – and thereby insulate the part-ners from any conflicts of interest. Tohead the committee, Vagelos recruitedDr. William Foege, the venerated former

director of the Centers for Disease Con-trol and Prevention, where he’d led theglobal campaign to eradicate smallpox.

However, Foege’s strong leadership,along with an independent MDP secre-

Focusing on the needs of the

program, rather than on what was

desirable for the partners, meant

the right decisions got made.{ }

CASE STUDY

The Mectizan Donation Program ExperiencePrinciples in Partnership Power Sharing

• Put aside individual collaborators’ agendas and stay focused on the goals of the partnership.

• Whenever possible, allow those who are most affected by a decision to determine their own needs and priorities.

• To resolve knotty disputes, use the invaluable services of an independentadvisory entity of unquestioned expertise, whose sole mandate is to further the partnership’s goals.

• Find ways to nurture important relationships, especially in the face of disagreement.

• Insist on being convinced of a partner’s proposition with the clearest evidence possible, rather than allow decisions to be made against your better judgment. Mutual buy-in creates stronger relationships based on trust rather than power.

• Work to understand the other partners’ structures, processes, and requirements to avoid being blindsided by unanticipated requests.

• Deploy your most knowledgeable and credible representatives available to balance the expertise from your strongest partners.

• Expect the unexpected: Be prepared to respond to constantly changing partner needs.

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tariat set up to carry out dailyactivities, lulled Merck man-agement into a false sense thatthe program would run itself.“There was a naive expecta-tion, or wishful thinking, orboth, that we could just stepout of day-to-day planning,”recalls Colatrella. “So wenever foresaw issues like com-munity-directed treatmentevolving in the field thatwould require decisions by Merck. Butit soon became a constant effort to keepon track, and we learned we couldn’t justthrow money and medicine at it andwash our hands of operations. Unan-ticipated needs always came up.”

Leap of FaithTo appreciate Merck’s approach toengaging with partners, it helps to under-stand its corporate culture. As a visiblegiant in a tightly regulated industry,insiders have always been highly con-servative and averse to anything thatwould risk the company’s image. “Pro-tecting the corporate reputation hasalways been paramount,” recalls Fettig,

who retired in 2000. Colatrella, whotook on increasing responsibility for theprogram’s oversight over the years, sawit as her job to be skeptical, if only tomake sure the program didn’t comeback to haunt Merck. A second charac-teristic, typical in many corporate cul-tures, is arrogant thinking. “We had tolearn to constantly suppress the ten-dency to think that the way we did thingswas the right and only way,” Fettig says.

No wonder, then, that when theWHO introduced its controversial com-munity-directed treatment strategy in1996, Fettig and Colatrella resisted. Ininitial methods of distributing Mectizan,mobile teams of professional healthcare

workers from NGOs and pri-mary care centers woulddecide every detail: whowould receive the drug, howand when it would be admin-istered and communicated,and importantly, who wouldprovide medical supervision.Under CDT, however, thosedecisions would be left tolocal communities to tailor totheir own needs.

Exposing Merck to the risks of deci-sions by unproven lay health workers,including improper dosing and report-ing, black market diversion, and a lackof professional oversight, seemed toomuch for Fettig and Colatrella to evenconsider. As it turned out, their fearsweren’t totally unfounded. A few yearsafter CDT began, Mectizan would belinked to a rare death in Cameroonwhere no medical professionals werepresent to intervene. “As corporate deci-sion makers, we wanted proof that CDTcould work” without incurring suchrisks, Fettig explains. But of course, forall of the WHO’s extensive research intothe concept, “No one could give any

64 STANFORD SOCIAL INNOVATION REVIEW www.ssireview.com

A lesson on river blindness and the correct use of Mectizan to treat it in an African village.

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guarantees. And with growing field sup-port at the NGOs for a more sustainabledrug-delivery system, we were undermounting pressure to adopt the strat-egy,” he adds.

Over the following year, three keyfactors convinced Fettig and Colatrellato reconsider. First, with each passingmonth, field data confirmed that Mec-tizan was extremely safe, supporting thepremise that nonprofessionals couldadminister the drug without serious risk(rare instances like Cameroon aside).Indeed, treatment couldn’t have beeneasier: It required only one simple dosein tablet form, once a year, and pre-sented minimal side effects. “To its credit,the WHO recognized Mectizan wasuniquely suited to trial the CDT strat-egy,” Colatrella says.

Second, members of the MectizanExpert Committee – with far more pub-lic health experience than Merck – cameto strongly support the strategy. Thisled Merck senior management to deferto the MEC. After all, had Merck dis-puted their call, it would have under-mined the authority the company itselfhad set up to oversee the program.

Third, WHO experts and othersworked hard to find solutions to Merck’sbiggest objections. National task forcesdesigned a ledger system to help fieldworkers record patient data. NGO part-ners devised effective means of train-ing illiterate volunteers, such as educa-tional plays and skits from Helen KellerInternational. The MEC and MDP sec-retariat patiently designed a form toaccurately record adverse reactions.

In the end, “Merck’s skepticism wasa good voice of caution,” says Dr. BjörnThylefors, a 26-year eye-disease veteranat the WHO, and head of the MDP sec-retariat since 2001. “It pushed everyoneto carefully prepare the implementa-tion. We only had one chance to get itright, since the program would havebeen irreparably damaged if done badly.Merck’s firm stand was essential to the

formula for good partnership.”With safeguards in place to mini-

mize the risks, Merck finally agreed thatthe program’s need for sustainable dis-tribution was more important than thecompany’s own policies and rules. “Itwas a leap of faith, but we had to acceptthat our ways of working were pre-conceived for Western medicine andinappropriate for the reality of gettingthe drug out to the remotest parts ofAfrica,” Colatrella admits. “The bottomline was, without assured distribution,our very goal of eliminating the diseasewould have been in jeopardy.”

The CDT debate yielded anotherimportant lesson: Target communitiesmust not simply buy into program deci-

sions made bydonors; they musttake ownership ofthem. Before CDT,Merck – like mostdonors – took theattitude that outsideprofessional care hadto be provided for poorcommunities. Butlocal health workersin some 62,000 com-munities across Africaand Latin Americahave since proventhey’re not only capa-ble of responsibly dis-pensing Mectizan,they’re also better atit. By harnessing localcommitment andsocial networks, theynearly doubled cov-erage in many coun-tries to as much as 87percent after adopt-ing CDT,4 while infec-tion rates in somedropped from over 50percent to near zero.5

The episode not onlytaught Merck the

value of yielding to the wisdom oftrusted partners, but it also left a farricher health delivery system by chal-lenging them to perfect their game.

Protecting the RelationshipIf Merck’s aversion to risk led it to chal-lenge the WHO’s aggressive CDT strat-egy, the health agency’s own culturalquirks have occasionally created ten-sions in the partnership as well. In par-ticular, the WHO has always been sen-sitive to associating with the privatesector. As steward of the will and poli-tics of its 192-member national healthministries, it has routinely sought tosteer clear of any conflict of interest, oreven the appearance of influence, par-

www.ssireview.com STANFORD SOCIAL INNOVATION REVIEW 65

CASE STUDY

Local health workers distribute Mectizan in a village in Togo.

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ticularly from the for-profit pharmaceuticalindustry. Although theMDP’s success has wonover many at the WHOto partnering with pri-vate industry, Thyleforssays, “There are stillvoices there today whoprefer to control manyprograms” with out-siders, including thedrug donation initiatives.

One particular inci-dent in the early 1990s, followed by oth-ers over the years, was seen by many asa thinly veiled attempt by the WHO todistance itself from Merck by seizingmore control over the MDP. Its directorof African operations at the time pro-posed stockpiling Mectizan under hisown program’s distribution center inBurkina Faso. A strong and vocal per-sonality, the director argued that localstorage would make the tablets avail-able faster for emergency response. Butwhen Merck investigated shipment data,it found no significant delays had everheld up urgent requests.

Moreover, shipping the drug enmasse, rather than sending individualcountry orders through the MectizanExpert Committee’s standard applicationprocess, would have undermined itsauthority – Merck’s only source of objec-tive guidance – and relegated the com-pany to a backseat player in its own pro-gram. Stockpiling also would have guttedmany of the tracking and reporting pro-cedures that helped make the programsuccessful, not to mention exposing sup-

plies to diversion and mis-use. “Once the drug wason the ground, we’d havelost control over whereit went, how it was used,and by whom,” says Colatrella. Not onlywere there no urgent needs warrantingthe proposal – there were plenty of rea-sons to reject it.

However, it was clear to Colatrellathat simply saying no to the Africandirector, one of the most powerful fig-ures in public health and a key clientand advocate of the program, was notan option. An unceremonious rebuffcould easily have destabilized the part-nership, and her managers constantlyreminded her, she says, that “the com-pany’s relationship with the WHO was

much bigger than MDP.” So Merckredoubled efforts to minimize emer-gency response times – redirecting ship-ments or borrowing tablets from othercountries when necessary to assure thatshortages wouldn’t develop. MDP thenasked the WHO for a plan to protect sup-plies against diversion and other risks.When it never delivered, the proposalquietly faded away.

As with CDT, Merck in the end putthe program needs ahead of politicalconcerns – in this case standing itsground despite the risks. But by takinggoodwill actions to mitigate the WHO’sperceived problem, it also protected oneof the key relationships underlying thepartnership. The African director nevermentioned the incident again.

The Virtue of CompromiseKnowing how far to bend to a partner’srequest is a refined skill. But sometimes

66 STANFORD SOCIAL INNOVATION REVIEW www.ssireview.com

CASE STUDY

JONATHAN B. LEVINE is an independent researcher and consultant in the field of corpo-rate social responsibility and international development strategies. He provides programdocumentation, strategy assessment, and international research for corporations, nonprof-its, and government agencies. A senior associate of the Center for Corporate Citizenship atBoston College, he was formerly a journalist with Business Week magazine in Europe andthe United States. Additional background is at www.jonathanlevine.com.

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River blindness is a

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America as well. Villagers

(above) receive Mectizan

from health workers such

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CASE STUDY

www.ssireview.com STANFORD SOCIAL INNOVATION REVIEW 67

knowing the proper response doesn’tmake the job any easier. Eight years intothe Mectizan partnership, a number ofNGOs timidly requested that Merckreformulate and repackage the drug. Foryears field workers had quietly com-plained that its 6mg tablets, wrapped infoil packs of 100, caused considerablewaste when they had to be cut into half-doses for small children. The discardedfoil also posed an untenable environ-mental problem as volumes grew. Theirrequest for 3mg units in bottles of 30, 100,200, and 500, plus smaller foil packs,would solve those problems, plus betteraccommodate communities of differentsizes. “We didn’t feel we could possiblyask Merck for more on top of what wasalready a donation,” says Catherine Cross,manager of international relations forSight Savers International. “But the fieldrequests were becoming hard to ignore.”

What the NGOs figured was aneffort of perhaps several months, how-ever, turned into a nearly three-yearordeal. It required Merck to retestpotency stability for the new formulationand persuade its manufacturing divisionto make the packaging changes – idlingexpensive foil machinery in the process.It also had to get clearance from regu-latory authorities, set up a new bottlingline, and produce new labels and physi-cian circulars. “We felt blindsided,” recallsColatrella. “The NGOs made a verygood case, and we completely under-stood once we heard it. But it meantasking other divisions of the companyto do things that would impact theirown operations and performance goals,and it was hard to justify the costs. Yetif we hadn’t cooperated, it would haveappeared that we lacked commitment toneeds in the field.”

After putting off the decision fornearly a year, Merck finally compro-mised on 3mg tablets in bottles of 500only. The solution wasn’t ideal, but it sat-isfied the partners. More important,Cross says, “Merck’s willingness to listen

and accommodate” them totally dis-armed many of the partners’ early pre-conceptions of the company as a con-trolling ogre “with horns and a tail.”The virtue of compromise not onlysolved the problem but also strengthenedthe partners’ trust and won Merck alliesfor future challenges.

Constructive ConflictAll partnerships come with conflicts. Bymost accounts from partners to the Mec-tizan Donation Program, it has done afar better job than most in turning thosepotentially destructive differences intoconstructive collaborations. Indeed,nearly all 34 respondents from 21 inter-national organizations involved in MDPagreed in a recent survey that “conflictis resolved skillfully” in the partnershipand that “consensus-building is per-formed well.”6

The experiences above offer somebasic guidance in sharing the power inpartnerships. The lesson of the com-munity-directed treatment decision sug-gests deferring to the position in a con-flict with the greatest expertise, as longas partners trust each other and riskscan be mitigated. On the contrary, theMectizan stockpiling episode implies it’sbest to stick to your guns – as did Merck– where there’s no hard evidence for aproposal or when the risks are greaterthan the rewards. However, compro-mise is the obvious path when both sidesof an issue have equally strong argu-ments, as in the tablet reformulationdilemma.

Still, even the best instincts in shar-ing decision making can’t compensate

for having the essential elements of part-nership success in place. In the case ofMDP, top management of all the part-ners genuinely bought into its goals; theexpertise and reputation of membersof the Mectizan Expert Committee, asa critical decision-support mechanism,was unassailable; the drug itself turnedout to be highly efficacious, safe, andsimple to administer; and as respon-dents to the recent survey acknowl-edged, all partners shared the program’ssingle and clear vision of eliminatingthe disease of river blindness.

No pat set of principles, of course,can assure harmonious decision making.But as Colatrella puts it, “There’s noth-ing wrong with insisting on being con-vinced” of a partner’s position. In thelong run, taking the time to reach agree-ment creates stronger relationships basedon trust rather than power.

1 J. Sturchio and B. Colatrella, “Successful Public-Private Partnerships in Global Health: LessonsFrom the Mectizan Donation Program,” Economicsof Essential Medicines, ed. B. Granville (London:Royal Institute of International Affairs, 2002).2 W. Oswald, E. Leontsini, and G. Burnham, “Inno-vative Practices for Improved Access to EssentialMedicines: Women, Poverty, and the Role of Com-munity in the Control of Disease,” Johns HopkinsBloomberg School of Public Health, Nov. 18, 2004.3 D. Peters and T. Phillips, “Mectizan Donation Pro-gram: Evaluation of a Public-Private Partnership,”Tropical Medicine and International Health 9, April2004.4 Oswald, Leontsini, and Burnham, “InnovativePractices for Improved Access to Essential Medi-cines: Women, Poverty, and the Role of Commu-nity in the Control of Disease.”5 Sturchio and Colatrella, “Successful Public-PrivatePartnerships in Global Health: Lessons From theMectizan Donation Program.”6 Peters and Philips, “Mectizan Donation Program:Evaluation of a Public-Private Partnership.”

Merck’s willingness to listen disarmed

the partners’ early view of the company

as an ogre “with horns and a tail.”{ }

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