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Burroughs Wellcome Company

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Tomas Rey

on 7 April 2011

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Transcript of Burroughs Wellcome Company

Retrovir Company Background
Information Produced by Burroughs Wellcome
Founded in 1880 by two researchers, Henry Wellcome & Silas Burroughs, in London
American subsidiary of Wellcome PLC
Multinational Firm
-Manufacturing Operations in 18 countries
-Employs 20,000 people Human Health Care Products Accounts for 89% of Fiscal Revenue
Two Products generate 34% of the sales within Human Health Care Products
Zovirax- Used for Herpes Treatment
Retrovir- Used to treat AIDS
- Zovirax: $492 million
-Retrovir:$225 million (1989) North America is largest market for PLC , with annual sales of $997 million
(42% of worldwide sales) Development of Retrovir AIDS research began in June 1984 Burroughs Wellcome Top Selling Products Competitors
(in terms of AID medication) Bristol Myers, product- DDI, for patients whom have a negative reaction with AZT but was not affective as AZT (brand name Retrovir), It is supposed to be less toxic. Other companies like Glaxo and Triton Biosciences were in R&D and would expect prescription sales by 1991 Problems Facing the Company Pricing for retrovir (AZT)- 20% cuts back to back… cost is way too high for consumers that need it. Compared to other medicines for cancer it is double even triple cost for total life time cost. They justify it many ways and there is another side to the debate also.

Thyadine- only 25 pounds available when product came out. Now they want to order by the tons….

Lawsuit over the trademark Oakland CDC Case Study (2008) 1/5 of Americans with HIV were unaware of it
No single government can tackle to treat/cure the disease
Program created in Oakland, California to ultimately bring awareness
Allows companies to produce positive publicity / "CSR" in terms of trying to tackle HIV & AIDS Overview Issues with pricing of Retrovir
Burroughs Wellcome was unsure how much the drug was in demand
Activists later demanded the cost of the medication be lowered
The company was making vasts amount of profit
Was the company socially responsible making so much money on a product that could save millions of lives? Pricing Issue Lifetime medical costs for vairous diseases AIDS: $70,000 - $141,000
Digestive Tract Cancer: $47,000
Leukemia: $29,000
Heart Attack: $67,000 Pill Initially set at $188 for 100 capsules December 1987- price set at $150.40 per 100 capsules
September 1989- $120 per 100 capsules Direct cost of manufacturing and marketing Retrovir was 30 - 50 cents per capsule Examined hundreds of compounds Human testing began on July 3, 1985 Administration of placebo terminated in September 1986 R&D costs was about $50 million Original Marketing of Retrovir Initial distribution was limited due to short supply in March 1987
Initial price showed an annual cost of $8,528 - $9,745 for AIDS patients
Extremely high compared to Interfron which was only $5,000
RECOMMENDATIONS Offer the drug at a lower price per 100 capsules
Continue donating capsule to non-profit organizaitons
Have PR initiatives bring awareness about the drug
Issue the drug in terms of Corporate Social Responsibility instead for profit
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