Pricing Retrovir: Wellcome PLC and the Role of Pharmaceutical Companies in the Global AIDS Crisis, 1986 to 1991

Abstract

Abstract In spring 1987, British pharmaceutical company Wellcome PLC released azidothymidine (AZT) sold under trade name Retrovir, the first successful treatment for AIDS. In the context of a global public health emergency and with no competing products, Wellcome invested heavily in upfront costs to bring Retrovir to market, reflected in the original launch price of $188 (US dollars), applied to all other markets. Retrovir subsequently faced backlash in the United States for its high cost and Wellcome’s profits became a target of debates about prescription drugs in the American healthcare system. As a result, the company agreed to two price reductions within the first two years of market release. Events in the US had global impact, discouraging the company from providing AZT via commercial channels in African countries. Drawing from new archival material, this article explores how Retrovir’s pricing reflected the uncertainties of the global AIDS crisis as well as the unique risks Wellcome faced as a foreign company in its most important market of the US. It argues that, contrary to critical opinion, Wellcome’s pricing of Retrovir did reflect an underlying principle regarding the appropriate role of for-profit research-intensive pharmaceutical companies during an unprecedented pandemic.