Burroughs Wellcome Company

2084 words 9 pages
Burroughs Wellcome Company, Case 6
In 1982, the Center for Disease Control and Prevention (CDCP) labeled the acquired immune deficiency syndrome (AIDS) and began to warn the public of the disease. In 1983 and 1984, the virus that causes AIDS was isolated and in 1988 it was named the human immunodeficiency virus (HIV).
Burroughs Wellcome Company is a subsidiary of Wellcome PLC. Wellcome
PLC is a pharmaceutical firm that employs 20,000 people in 18 countries. Wellcome
PLC produces both ethical and over the counter medication. Zovirax, which treats herpes infections, accounted for $492 million in sales in 1989 (Kerin & Peterson, 2013).
Retrovir, an AIDS treatment, was the second largest seller with $225 million in sales
(Kerin &
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Most importantly however, is their responsibility to patients that rely on Burroughs Wellcome’s products for their health and well-being
With an increasing number of AIDS cases, Burroughs Wellcome had a social and financial responsibility to make the drug Retrovir accessible to those who needed it, while remaining financially viable. It would be socially irresponsible to exploit people with an illness for mass profit gains. Like most other industries, the health care industry is competitive and no business is immune to failure. Because of this, Burroughs
Wellcome must remain profitable in order to protect its employees and shareholders as well as to ensure that the company can continue its research while providing the medical community with effective medicine.
As previously mentioned, Burroughs had dropped the price of Retrovir twice: first on December 15, 1987 when a price drop of 20% was justified by synthetically produced thymidine and a second 20% cut due to a further expansion of HIV from 600,000 to one million estimated potential patients, at which point Burroughs’ gross profit margin
(70.6%) and return on sales (20%) were comparable to other competitors in the industry
(Kerin & Peterson, 2013). When pressured by outside entities about further reducing the price, Sir Alfred Shepard of the Board of Directors said, " There is no


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