BAYER AG: ANTHRAX AND CIPRO

Aman P39121, Chittesh P39131, Munish 39145, Saransh P39162, Shivani P39166, Yuvraj P39177

Executive Summary

In 2001, a massive terrorist attack happened in America and soon after that attack a disease
named Anthrax started spreading rapidly which was viewed as a bio-chemical terrorist attack.
Cipro was the medicine manufactured by Bayer AG for the treatment of this fatal disease. As the
news of the disease started spreading, people panicked and started purchasing the medicine in
advance. This led to the shortage of Cipro in the market and the government started blaming
Bayer AG for their inability to supply for the demand in place. Also, there was a communication
gap between the company and the government. Bayer AG should try to improve the
communication and also, increase the production to satisfy the demand that is being generated.

Introduction

Bayer AG, a pharmaceutical company was a diverse international health care and chemicals
group which developed many innovative products like Aspirin. In 2001, a disease named
Anthrax started spreading rapidly in the United States of America. Cipro was the medicine
manufactured by Bayer AG for the treatment of this fatal disease. The medicine was patented in
the name of Bayer AG and could not be produced by any other firm. As the news of the disease
spread, people panicked and started purchasing the medicine in advance. This led to the shortage
of Cipro in the market and the government started blaming Bayer AG for their inability to supply
for the demand in place. Bayer AG stumbled majorly in its political and public-relations efforts
though it increased the production to match the demand. Also, the health and human services
secretary -Tommy Thompson questioned the selling price of the medicine Cipro and the profit
that the company was making at the time of Bio- terrorism. The Senator- Charles Schumer
thought of scrapping the patent of Bayer AG so as to enlist other companies to produce the same
product.
Objective statements

1) Minimize the fear of the disease Anthrax in USA as it was not as widely spread as it
appeared.
2) To take care of the shortage of medicines in the market.
3) Save the patent rights of the company as it has suffered major losses in the past because
of losing patent rights for medicines like Aspirin etc.

Problem statement

1. There were fears in the minds of people regarding Bio-terrorism in USA.

2. Insufficient quantity of the drug in the market to counter the increased demand of the
medicine due to the fear.
3. The government was planning to cancel the patent of the medicine- Cipro.

Criteria for decision making

1) Humanitarian grounds
The citizens should be taken care of in this Bio-terrorism. As they are already scared of
the terrorist bombing in world trade center, extra care needs to be taken in such sensitive
situations.
2) Availability of medicines in the market
The availability of medicines has to be taken care of as there should not be a single
fatality because of the shortage of medicines.
3) Profit Retention
The company should not get into loss while supplying medicines by increasing the
production.

Possible solutions

1) One of the possible solutions is to communicate well about the present condition of the
company to the government as the government is unclear about the company’s ability to
meet the demand of the medicine- Cipro. Also, in the short run the company should
outsource the production of the medicine to other firms in at the same price as before.
 This would ensure the availability of medicines in the times of emergency in the short
run.
2) To dissolve the patent if the company is not able to manufacture the quantity which is
required in USA. So by dissolving the patent, the production could be open on national
scale and the shortage of the medicine can be taken care of.
3) To decrease the price of the medicines and increase its production.
Point number 1 is the proposed solution for the problem stated above.

Action Goodwill/Public Communication Profit Quick supply

image with
Government
Dissolvent of Yes Yes No Yes
patent
Production in No No Yes Yes
contractual basis
Saving patent + Yes Yes Yes Yes
communication
with
Government
Do nothing No No Yes No

Proposed solution and Implementation

Bayer AG should communicate the situation to the government about its ability to produce the
medicines required in USA. It should collaborate with the government to make people aware of
the actual scenario and should ask them to not to panic. The citizens should be advised to not to
purchase the medicines in advance so that it reaches the person who is in need of it. The
company should outsource its production to various other pharmaceutical firms in order to
increase the availability of medicines in the market.
Contingency Plan

After studying the effectiveness of the above plan, the company and the government should
evaluate and cancel the patent of the Bayer AG. This would ensure the production of Cipro drug
in sufficient quantities as is advised by the government.