Abstract

"Business and Ethics: Why did Burroughs Wellcome sell an anti-AIDS drug at the highest-ever price?"

Hideki Yoshikawa, Kyoto University (yoshikawa.hideki.88a@st.kyoto-u.ac.jp)

Business historians of the pharmaceutical industry have studied its R&D activities. However, its business ethics have recently become a public concern as the industry faces criticism over drug pricing. Meanwhile, a growing literature in business history focuses on ethics (e.g. Nix et al. 2021). In this context, this research studies Burroughs Wellcome, which sold an expensive anti-AIDS drug during the AIDS crisis. Previously, the company’s perspective on the ethics and rationale behind the pricing remains unexplored. The existing research on the AIDS crisis captures the patients’ difficulty in accessing healthcare (Cohen 1997; Bell 2018, 2020). Although perspectives from the government and the public started to be explored (McKay 2017), health-related business perspectives are missing.

This research intends to uncover Burroughs Wellcome’s interpretation of the AIDS crisis and the business rationales and ethics that guided their decisions. It addresses the question; “From 1981 to 1990, under what business logic and ethical understandings did Burroughs Wellcome develop and market a costly anti-AIDS drug in the USA?”. It employs an industry-studies approach and an institutional-logic approach, delineating both the pharmaceutical business characteristics and the multifaceted logic the company faced. It uses archival materials from the Wellcome Collection, documenting the drug’s development and sales processes. It also uses Archives of Sexuality and Gender compiled by Gale, which stores activism’s records.

The high pricing was due to the uncertain market expectations and their unique capabilities in anti-virology, which took years to develop. Facing enormous criticism from patients, the company reduced the price multiple times. During the price debate, the power structure changed. Initially assuming control over the pricing, the company was pressured by the activism, originally socially marginalized actors, which increasingly gained a voice in the socio-economic relations. It implies that the pharmaceutical business is more vulnerable and receptive to public criticism than usually assumed.