November 5, 2007
Burroughs Wellcome Company Case
This case was over the Burroughs Wellcome Company and their drug azidothymidine or AZT. Burroughs Wellcome is part of Wellcome PLC based out of London. The drug AZT is used to treat AIDS. This company is having trouble with the pricing of this drug because each person with AIDS should have the opportunity to use this drug. Potential users of the drug were estimated to be between 600,000 and 1 million in 1989. It is estimated that less than half of people with AIDS have been tested and are being treated.
The government has stepped in to help people infected with AIDS. Forty percent of AIDS patients received care through Medicaid which was between $700 million and $750 million in 1988. This number was expected to grow to $2.4 billion by 1992. Private insurers also paid out nearly $250 million annually for AIDS treatment.
AZT was not the only drug being tried to treat AIDS. These drugs are used to slow the progression of HIV by interfering with the affected cells and keeping them from producing new viruses. The downside is that there is no drug that eliminates the infection. Another drug like AZT called DDI was given a limited approval by the FDA. This drug is given to patients who have a negative reaction to AZT and it is said to be less toxic.
Burroughs Wellcome is in 18 countries, with 20,000 employees. 18% of these employees are involved in research and development. 89% of Burroughs Wellcome’s revenue came from prescription and over the counter drugs. 34% came from Zovirax and Retrovir. Zovirax had annual sales of $492 million, and Retrovir is second in sales with $225 million annually. The over the counter medicines such as Actifed and Sudafed had combines annual sales of $253 million.
North America accounts for most of the company’s total sales with sales of $997 million annually. The United States accounts for 42% of sales and the United Kingdom is the second...