Evaluation chairman of the board for wellcome plc

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EVALUATION Chairman of the board for Wellcome PLC, Alfred Sheppard, was quoted in 1989 as stating, “There’s no plan to make another price cut.” This is certainly an option for Burroughs Wellcome in this situation. To analyze this as an option, here are the pros and cons for this alternative: Pros Cons Profits remain high Continuing pressure for social responsibility Shareholders stay happy Potential lawsuit More money available to reinvest in R&D Potential deaths for those unable to afford it 3
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Projected sales for 1990 for this option are almost $350 million. The annual cost to the patient would be $6,570 if taking 1200 milligrams per day. 1987 1988 1989 1990 (proj) 0 50 100 150 200 250 300 350 400 Sales (in Millions) As the second alternative, the company could urge the prescribing physicians to reduce the dosage to match what the FDA approved. This option would reduce the cost to the patient to $2,738 annually. However, some clinicians have warned to approach this cautiously. Lastly, Burroughs Wellcome could reduce the price once again. Dropping the price would be a very positive move for the company public image. It would also be the more socially responsible thing to do. It may make the product more affordable for those who need it.
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