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.
An Analysis of GlaxoSmithKline The business that I have done research into is GlaxoSmithKline. This company is a globalised research-based pharmaceutical public limited company. Its ownership structure has changed a great deal since the original company was first established in 1715. Originally a pharmacy, the company has expanded, merged with and taken over other companies over the decades. The last of these was the merger between Glaxo Wellcome and SmithKline Beecham, which formed the
as these would display GlaxoWellcome in a positive light and would destroy the negative stigma often attached to companies in the pharmaceutical industry. The implementation of these strategies although costly, may swing consumer preference for the drug and increase market share, brand awareness and the overall profitability of the business
has continued to show signs of political and economical growth that makes regions in India attractive investments by various markets. India has taken steps to recognize these opportunities to gain Foreign Direct Investment by realigning government policy towards new business potential. Such potential is often marked by “it’s too good to be true” as global investors determine the risk through in depth analysis of regions around the world and much like team A has outlined for Kerala, India. Foreign