I am in the last stages of a first article draft on how UK-US pharma house Burroughs Wellcome (BW) priced the first successful treatment for HIV/AIDS in the late 1980s. Using archival material from GlaxoSmithKline London (the company’s name after its 1995 merger with Glaxo, then 2000 merger with SmithKline Beecham), ‘Pricing Retrovir’ has been one of the quickest papers to draft, because it was so distinct from the narratives I was quite familiar with about profiteering corporate pharma. Just the other weekend, I watched the 2005 sci-fi film The Island, about biopharma companies making clones to harvest organs for the sick but wealthy.
It’s not that these narratives of David and Goliath-like triumph are not important. There is a reason they continue to be powerful framings from which we get our bearings on current global health developments. Let me give an example: American music magazine SPIN published an article in 1989 titled ‘Sins of Omission’ by Celia Farber, unearthing the ‘cold-bloodedness of the AIDS establishment pushing a drug that was worse than the disease, and killed faster than the natural progression of AIDS left untreated.’[1] SPIN Editor Bob Guccione Jr. argued that the reason it has been republished in 2015 was due to its influence on sharpening the media’s eye on profiteering pharma. This was likely due the news in 2015 of Martin Shkreli significantly pricing up the cost of a toxoplasmosis drug.[2] These stories continue to frame our understanding of contemporary developments. Regarding the COVID-19 therapeutics and vaccines race, Rolling Stone reported that Gilead’s pricing of Remdesivir at $3,120/patient was a sign that ‘the production of pharmaceutical drugs is still a nearly riskless subsidy-laden scam’ (music magazines commenting on global public health is quite cool in my opinion).[3]
I have kept these stories at the forefront of my analysis when examining the BW documents. Observing the same narrative this time through the eyes of pharma in unseen archival materials, I have to wonder as a contemporary historian what the most accurate, not necessarily most correct, story is to tell. The monopoly the company had on the drug, from launch in April 1987 to 1989 when combination therapies began to be increasingly relied on, was certainly unusual. Retrovir, or azidothymidine, was an unprecedented historical moment, which BW likened to penicillin for bacterial infections in early 20th century battlefields. Naturally, it subsequently prompted much outcry that the company was profiteering from the media, government bureaucracies and consumer activists. See below: a London clinician Anthony Pinching is referenced in Steven Epstein’s sociology/history of AZT consumer activism in the United States, and BW’s 1986 response to Pinching when he raised concerns about communication on new results between clinicians conducting trials.
Figure 1: Juxtaposing historical narratives (Steven Epstein’s 1996 Impure Science, sociology/history) with archival documents[4]
Recouping R&D costs is a common refrain of pharma when setting the price. While there is more to be told in Wellcome Trust Archives and Manuscripts (GSK archives covered more distribution, marketing, pricing strategy, profit, joint ventures, etc.), my honest opinion so far as a contemporary medical historian is that first, the media has made far too much of the idea of repurposed drugs. This has been partially due the media’s misunderstanding of scientists and clinicians’ willingness to turn to the press when frustrated with BW.
AIDS coincided with a particular moment for investment in antiviral research, a field BW had been heavily invested in since the 1970s. Diseases are not distinct and the idea of a retrovirus disabling immune function is not dissonant with cancerous cells. In sum, while I cannot yet fully comment on the R&D aspects (and there is a story already told by the US National Institutes of Health, which Wellcome Archives may contradict), BW certainly had the R&D scientific and intellectual clout to understand how an old compound like AZT could be used to slow HIV cell replication. This is by no means the only approach to deal with AIDS and there were other immune-boosting research ventures, particularly from Japanese pharmaceutical companies (which BW kept close track of). Thus, I tentatively offer that much of AZT’s monopoly success was in taking a particular product formulation’s application to an emerging disease to a large-scale global market, rather than that in scientific principle the compound AZT was useful/useless, as a lot of media narratives argue.
Figure 2: I am looking forward to combing through Wellcome Library Collections on its scientists and virologists regarding AZT as soon as COVID-19 travel restrictions lift[5]
Then was the company ‘profiteering’? My assessment so far, especially given that the company went on to great success, is no. In fact, precisely because AZT was so unprecedented in its monopoly, the company was forced to engage centrally with the idea of ethical pricing: it could not ‘afford’ to profit unfairly. First, BW was especially careful to navigate many stakeholders’ expectations, dealing with each in turn and sometimes changing its own stance as a gesture of goodwill. The idea of a standard universal price was set, not just bearing internal needs (such as R&D or clinical trial expenses), but the distribution and cost recovery channels via which patients in health systems around the world received the treatment. Here, there was a large divide between the United States, BW’s biggest market with the largest case numbers by far and good clinical trial infrastructure but great liabilities in terms of patient activism and a fragmented health system, and the other markets with socialized health systems, starting with the UK, Europe and even protectionist Japan.
Second, ‘profit’ in the base sense of the word was near impossible to calculate when the global case numbers were unknown (WHO statistics depended on reliable testing and surveillance), supplies of starting chemical materials were limited (thymidine shortage led to many offers and joint ventures) and the treatment regimen was still being developed (at what stage ought the drug be prescribed). Thus, even in early 1987 just before launch, the company was still unable to provide enough AZT to conduct clinical trials in each country in order to register the product (hence the uproar over ethics of clinical trials inclusion). Therefore, BW arrived at the initial universal price of $188/bottle (100 mg * 100 capsule) as the base consensus price to bridge all these uncertainties. Even then, the company did not really turn a profit until 1988.
This is not to say that the company did not look out for its own interests. In many ways, Retrovir reflected a number of self-promotional desires. The company did actively and aggressively market its product with clinicians and policymakers at special booths in conferences. It did make deals with established pharma or generics to further its interests or combat competitors. It did price the drug factoring in future investments in antivirals and retroviral R&D. However, it was also noticeably upset with media claims simplifying its pricing aims and tried a number of times to communicate clearly the many factors that featured into cost with major media houses. At times, even after offering extensive interviews, the resulting news story was inconsistent with what they had communicated.
I am not intending to defend corporate pharma as a sector, but rather to show that institutions and sectors are not, in principle, ethical or unethical. They are made of people and create their own cultures and in the final game, the question is who was most helpful to the public. In sum, my temporary conclusion is that pricing of pharmaceuticals is essentially a boxing ring in which we see who lasts the longest in the battle to improve people’s lives: activists, governments, or corporate pharma.
[1] Key to remember is that SPIN is a music and culture magazine – I have not yet found this article in BW’s media and public relations strategy. Celia Farber, ‘AIDS and the AZT Scandal: SPIN’s 1989 Feature, “Sins of Omission”’, Spin (5 October 2015 – original November 1989), <https://www.spin.com/featured/aids-and-the-azt-scandal-spin-1989-feature-sins-of-omission/>. [2] In hindsight and seen from BW’s Retrovir, this was so silly it couldn’t even be called unethical, in my opinion. Shrekli is a hedge fund manager and has no interest in improving our understanding of the human body, pharmacokinetics and drug interactions with diseases. Emerging biopharma ventures that use orphan drug laws in the silliest ways are just not at the same level as established pharma houses with significant R&D programmes. It’s just playing with finances in unproductive ways that waste everyone’s time, not just patients, but the media and governments. In sum, my opinion is that Shkreli’s 2015 controversy is not comparable to BW’s Retrovir in 1987-89. [3] Matt Taibbi, ‘Big Pharma’s Covid-19 Profiteers’, Rolling Stone (13 August 2020), <https://www.rollingstone.com/politics/politics-features/big-pharma-covid-19-profits-1041185/>. [4] David Brigden to Dr AJ Pinching, 29 September 1986, File: SCS1252 (509) AZT and the Media, GSK Archives, London. [5] David Barry, Wellcome Archives and Manuscripts, <https://search.wellcomelibrary.org/iii/encore/record/C__Rb1946506__SAZT__Ff%3Afacetmediatype%3Ah%3Ah%3AArchives%20and%20manuscripts%3A%3A__P0%2C4__Orightresult__U__X3?lang=eng&suite=cobalt>.