A Case Study on Glaxosmithkline and Aids Drugs

A Case Study on Glaxosmithkline and Aids Drugs for Africa



A Case Study on Glaxosmithkline and Aids Drugs for Africa

Introduction

The United States pharmaceutical industry has led the way in producing anti-HIV/AIDS medicines to help those suffering with AIDS around the world. In only a decade and a half, the industry has developed fifty-four AIDS medicines and has plans to develop over one hundred more, including an HIV vaccine. Bristol-Myers Squibb is spending $100 million over five years to fund AIDS research trials in five African Countries and to help organizations bolster community AIDS prevention and treatment programs. Bristol-Myers Squibb is also donating drugs to Mexico to treat pediatric AIDS. Another pharmaceutical company, GlaxoSmithKline, is providing sharply reduced prices for AZT, a drug used to combat mother-to-child AIDS transmission. Glaxo Wellcome is also sponsoring a program in developing countries called Positive Action, which provides intensive training to community groups and non-government organizations (NGO's) for delivering improved HIV/AIDS care.

Discussion

In the area of therapies for HIV/AIDS, the contribution made by the U.S. pharmaceutical industry is nothing short of remarkable. The first reports of a mysterious illness, later identified as HIV/AIDS, appeared in the medical literature in 1981 and the HIV virus was identified in 1983. The first HIV/AIDS treatment was approved only in 1987 (Love, 2005). Since then 54 medicines have been approved for HIV/AIDS and associated conditions, and an additional 113 are in development, most of which are being developed by the research-intensive pharmaceutical companies (Love, 2005).

What are Glaxosmithkline's Core Interest?

There are lots of Glaxosmithkline's core interests. GlaxoSmithKline (GSK, Middlesex, UK, www.gsk.com) has differentiated key antiretroviral drugs (ARVs) supplied through not-for-profit agreements from those supplied through other routes by changing the color coating on the tablets from white to red (Berkman, 2005).

The medicines that will be available in the new color are "Combivir" and "Epivir-150 mg," which are the medicines supplied in the largest volumes by GSK through not-for-profit programs.

Except for the color coating, the tablets are identical. According to the company, there will be no additional charge for the new tablet. This change will help ensure that medicines that are intended for the world's poorest countries are not diverted and sold at premium prices in developed markets.

The red tablet coating is one of several antidiversion measures for medicines supplied under not-for-profit agreements such as unique packaging in a special, trilingual pack. GSK also has embossed Combivir and Epivir tablets and introduced unique batch numbers for all heavily price-discounted orders so they will be more easily identified in the supply chain (Berkman, 2005).

GSK has registered the red Epivir and Combivir tablets with the regulatory authorities in a number of countries in Sub-Saharan Africa. To date Ethiopia, Ivory Coast, Kenya, and Tanzania have approved their use. GSK has begun to supply these markets with the red tablets, starting with Ethiopia in January 2005.

What Options Does The Company Have With Respect To Pricing, Protection Of Its Intectual Property And Relations With Stakeholders?

The company has lots of options ...