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Case Study : Burroughs Wellcome And Their Drug Retrovir

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Case Introduction This case study focuses Burroughs Wellcome and their drug Retrovir. Retrovir is a drug that treats AIDS and AID-related complications. In 1987, Burroughs Wellcome obtained approval from the FDA to market azidothymidine (AZT), also known as Retrovir, as a treatment for AIDS. Retrovir was the only kind of drug on the market. Because of this, many critics accused Burroughs Wellcome of price-gouging, as the price of Retrovir was $188 for a hundred 100mg capsules sold to wholesalers. The president of Burroughs Wellcome, T.E Haigler, defended the high price, stating it was due to uncertainty in the market, the possibility of new drug therapies, and profit margins created by new drugs. Even though Retrovir’s price was dropped 20 percent in December 1987, and 20 percent more in September 1989, due to the House of Representatives launching an investigation, there was still pressure to lower the price. The big question faced in this case is what is Burroughs Wellcome’s next move regarding pricing?
The Cost of AIDS and AIDS Treatments The origin of AIDS can be traced back to 1959 in Zaire, but it wasn’t until the 1980s where AIDS was discovered that it can be transmitted by bodily fluids and that HIV operates by destroying the T-4 cell, which makes people vulnerable to infections. This was an important as it showed retroviruses such as HIV can cause other diseases. In 1986 companies started to research the cost of AIDS and how to fight AIDS. The number of cases rose from 5,992 in 1984 to around one million by 1990. Treatment was very expensive, as the lifetime costs of the average person was between $70,000 to $141,000. As a cure was needed, companies starting pouring research & development into HIV and AIDS-related cases around 1987. Retrovir was one drug, while another company, Bristol Myers, released DDI, which was less toxic to users than Retrovir. Other companies were running clinical trials, and it was determined that one company would have a prescription drug on the market by 1991. Burroughs Wellcome Overview and How they Created Retrovir
Burroughs Wellcome is located in England. Their primary business is selling human healthcare products, prescription and nonprescription. The two main

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