The case talks about GlaxoSmithKline (GSK), its merger with Burroughs Wellcome, its commitment to developing countries, the pricing controversy and pricing pressures from multiple directions. GSK had to determine how to address the AIDS crisis in Africa while maintaining business viability in developing countries in the midst of all the pressures. In Africa, GSK confronted the reality of the AIDS crisis every day, and its decisions impacted thousands. Everyone--governments, nongovernmental organizations, the media, shareholders, and others--had an opinion, but there was no real answer to the question. GSK had to determine how to address the crisis while maintaining business viability in developing countries in the midst of all the pressures.
The first pharmaceutical company to discover the anti-retroviral drug for the treatment of the HIV virus was Burroughs Wellcome. The company thought that there is a small market for this drug and a short life cycle so they priced the treatment at about $10,000 a year. They received a lot of criticism for this. Critics argued that the research and development process was funded by government grants and therefore should begin generic productions immediately. After fighting in court to protect its patent, the company prevailed.
The research and development process was risky and expensive for pharmaceutical companies, so in the 1990s mergers and acquisitions started to occur. In 1995 GSK acquired Burroughs Wellcome, making the company Glaxo Wellcome, also making it a leader in AIDS therapy. In 2001 GlaxoSmithKline was formed by the merger of Glaxo Wellcome and SmithKline Beecham, becoming the world’s second largest pharmaceutical company. GSK continued its commitment to developing countries by offering vaccines at preferential prices. As a corporate policy, though, GSK did not sell its drugs below production costs.
Even though there was no known cure for AIDS, the introduction of ARVs made AIDS a more controllable illness. GSK combined a few of their drugs, which then became the company’s largest selling drug. As of June 2000 there were 14 FDA-approved HIV/AIDS drugs and GSK held patents on four of the fourteen. The introduction of ARVs questioned the quality of AIDS care between the poor and the rich countries. Most of the 36 million people in the developing world did not have access to the therapy. Views on the problem differed extensively. Some people believed that governments are responsible to provide care for its citizens; others believed that it is the pharmaceutical companies’ duty to provide cheap/free treatments to those who desperately need it.
The multinational pharmaceutical firm, Wellcome PLC, brought a product to the market to help treat the symptoms of AIDS and HIV. Wellcome PLC owns an American subsidiary known as the Burroughs Wellcome Company. In 1987, Burroughs Wellcome Company received FDA approval to sale Retrovir, which interferes with the ability of HIV infected cells to produce new virus. Burroughs Wellcome Company finds itself under siege in September 1989 by AIDS activists and various segments of the U.S. government. Despite two reductions in price in the last two years, Burroughs Wellcome Company’s executive management is under unrelenting pressure to decrease the price of Retrovir so that many more people can afford the prescription.
In the recent years the drug industry underwent a significant transformation. Many of the big companies generate high revenues, which allow them to expand. Some of them expand on their own others through mergers and the buying of smaller companies.
As per WHO "The 10 largest drugs companies control over one-third of this market, several with sales of more than US$10 billion a year and profit margins of about 30%. Six are based in the United States and four in Europe. Companies currently spend one-third of all sales revenue on marketing their products - roughly twice what they spend on research and development."
Yu, Winnie and Joel Hay. 1999. “Drug Patents and Prices: Can we Achieve Better Outcomes?” Measuring the Prices of Medical Treatments. Pages 27-28.
AIDS is slowly becoming the number one killer across the globe. Throughout numerous small countries, AIDS has destroyed lives, taken away mothers, and has left hopeless children as orphans. The problem remains that funding for the diseases’ medical research is limited to none. In the country Brazil, HIV/AIDS has been compared to the bubonic plague, one of the oldest yet, most deadly diseases to spread rapidly across Europe (Fiedler 524). Due to this issue, Brazil’s government has promised that everyone who has been diagnosed with either HIV or AIDS will receive free treatment; however, this treatment does not include help in purchasing HIV medications, that “carry astronomical price tags” (Fiedler 525). Generic drug companies have been able to produce effective HIV medications that are not as costly if compared to the prices given by the huge pharmaceutical companies. In contrast, the U.S. government has now intervened with these generic companies hindering them from making HIV medications, which may not be as efficient if made by the pharmaceutical companies. Not only are these drug companies losing thousands of dollars against generic drug companies, but also tremendous profit that is demanded for marketing these expensive drugs as well. “How many people must die without treatment until the companies are willing to lower their prices, or to surrender their patients so generic makers can enter market? (Fiedler 525).” With this question in mind, what ways can we eliminate the HIV/AIDS epidemic across the world? With research, education, testing, and funding we can prevent the spread of HIV to others and hopefully find a cure.
Since the development of anti-retroviral therapy (ART) in the 1990s, HIV/AIDs has evolved from a death sentence into a treatable disease. It has presented a unique global health problem because while the treatments were very effective, they were extremely expensive, required advanced laboratory monitoring, were prescribed indefinitely, and required excellent patient compliance. In many of the developing countries devastated by AIDs/HIV, the health and societal infrastructures often had difficult supporting an effective treatment program. For that reason, it is estimated that 71% of HIV/AID cases are in sub-Saharan Africa and only 39% of of them are on ART (AVERT, 2015). Southern Africa is often considered the “epicenter” of the
Although antiretroviral treatment has reduced the toll of AIDS related deaths, access to therapy is not universal, and the prospects of curative treatments and an effective vaccine are uncertain. Thus, AIDS will continue to pose a significant public health threat for decades to come.
Martinez, Barbara “Firms Paid to Trim Drug Costs Also Toil for Drug Makers” The Wall Street
GlaxoSmithKline (GSK) is a British pharmaceutical healthcare company. GSK was founded in the year 2000 and is headquartered in Brentford, England. GSK has recently fallen into many ethical business failings. 2007 began a time period of serious controversy and investigation of GSK. Eventually, GSK was accused of and pleaded guilty to criminal charges, resulting in a settlement of $3 billion.
Most hated man in America, Martin Shkreli. Thirty three year old man received this title after a 5,000 percent increase price of Daraprim from 13.50 dollars a pill to 750 dollars. Daraprium is an antiparasitic to prevent infection such as AIDS, malaria, etc. After being streamed in the media, people started posting negative comments about Martin Shkreli. People questioned his experience in drug or disease research. According to Lee, Martin Shkreli had no real experience with disease research all he was good at was reading and memorizing medical journals and textbooks. Not having knowledge of the disease, it demonstrates that he does not care about his customers. Successful entrepreneurs like Martin Shkreli, money is what is considered important
With the reference of new hepatitis C treatment, hefty price of new treatment by Gilead Science Inc. is highlighted in media and other health platforms. There is a big question to Gilead Science Inc. that why are they charging such high price in America? High price of new treatment has really put health insurer and state Medicaid programs in big trouble.
In the business of drug production over the years, there have been astronomical gains in the technology of pharmaceutical drugs. More and more drugs are being made for diseases and viruses each day, and there are many more drugs still undergoing research and testing. These "miracle" drugs are expensive, however, and many Americans cannot afford these prices.
There is an increasing pressure within pharmaceutical markets to reduce prices in line with medical budgets, as well as maintaining patent expirations. Being a global brand means disturbance in the operations when the market fluctuates. There is an internal weakness in the pharmaceutical industry, which includes theft and counterfeiting of drugs, and therefore is a weakness of Johnson & Johnson. While Johnson & Johnson has these specified weaknesses they deal with, there are even more opportunities which gives them an advantage for strengthening their position in the market. They already have the strength of meeting a broader range of customer needs with their products falling under three categories. Expiring patents on brand name drugs lead to an increase in the sales of generic drugs, Johnson & Johnson could capitalize upon this opportunity. With diagnostic markets growing, this positions the company in a good place as well as new medical therapies and findings that align with some of the company’s primary capabilities. Threats the company faces is with product recalls, extreme competition in pharmaceuticals that results usually in the first to enter is generally where success is determined. With technology developments, biotech concepts might possibly move the traditional pharmaceutical methods out of the
The Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome, commonly known as HIV/AIDS is a disease, with which the human immune system, unlike in other disease, cannot cope. AIDS, which is caused by the HIV virus, causes severe disorder of the immune system and slowly progresses through stages which disable the body’s capability to protect and instead makes it vulnerable for other infections. The first blood sample to contain HIV was drawn in 1959 in Zaire, Africa while molecular genetics have suggested that the epidemic first began in the 1930s (Smallman & Brown, 2011). Currently, according to the Joint UN Program on HIV/AIDS, 35.3 million people worldwide are living with HIV. In 2012, an estimated 2.3 million people became newly infected with the virus and 1.6 million people lost their lives to AIDS (Fact Sheet, UNAIDS). It is due to the globalized international society that a disease which existed in one part of the world has managed to infect so many around the world. Globalization is narrowly defined by Joseph Stiglitz as "the removal of barriers to free trade and the closer integration of national economies" (Stiglitz, 2003). Globalization has its effects in different aspects such as economy, politics, culture, across different parts of the world. Like other aspects, globalization affects the health sector as well. In a society, one finds different things that connect us globally. As Barnett and Whiteside point out (2000), “health and wellbeing are international concerns and global goods, and inherent in the epidemic are lessons to be learned regarding collective responsibility for universal human health” (Barnett & Whiteside, 2000). Therefore, through all these global connections in the international society, t...
no cure for HIV/AIDS there is and was medication that could have been distributed in South Africa.