This wasn't an accidental discovery; Merck had another medication that they thought might work if suitably modified. Long story short, they had to spend millions of dollars to develop and test the medicine and prove it safe and effective on humans. There had been some hope that someone (charities, the World Health Organization, somebody like that) might help defray the costs of manufacture and distribution, but it never happened. Merck has given out some hundreds of millions of doses and impacted millions of lives, and never received a penny for this miracle drug.
It wasn't just this one drug, either—that was an extreme example, but Merck were not in the habit of maximizing income to the detriment of patients. In an interview on American Public Media's Marketplace radio program, a former CEO commented that the purpose of Merck was to relieve suffering and cure disease; if they did that, they'd get some money. This CEO did not think it reasonable to raise the price of any medicine any more than the rate of inflation. In his view, it was okay to "leave money on the table," since Merck could get a reasonable return while fulfilling their mission.
What would happen to such a CEO today? Would activist investors take over the board and replace the CEO with someone that would raise prices and stop the giveaways? How can Merck continue to give away medicines in today's climate of fear and greed?
And what, if anything, can I do as an investor to help companies like Merck continue to do acts of benevolence?
One theory of investing says to forget about benevolence and invest for maximum return. But wouldn't that tend to discourage, even extinguish, corporate benevolence of the "river blindness" variety?
One could imagine creating a stock fund concentrating on socially responsible investments, but if the returns aren't there, there won't be enough investors. The system of capitalism tends to concentrate wealth, as many have pointed out—perhaps most notably Professor Piketty in his Capital in the 21st Century; trying to counteract this tendency is like trying to fight the laws of physics.
Yet we must at least think about trying. Philanthropy on the scale of Merck's giveaway of the "river blindness" drug would be exceedingly difficult to get with individual donations or government subsidies. If Merck were of a mind to make money on the drug, no amount of government subsidies would be enough to supply the drug to all who need it. (Government subsidies can barely keep our 20th-century Caltrain system afloat financially.)
So I'm stumped, at least for the moment. I'm sure others have given a lot more thought to this, and from my understanding, Merck are still giving away the "river blindness" medication. So it appears that there's still hope. But a comprehensive answer? I've no idea.