Socially Responsible Pricing: Lessons from the Pricing of AIDS Drugs in Developing Countries Harvard Case Solution & Analysis

Corporate social responsibility is important for pricing decisions in some markets. The extreme case is the pricing of essential drugs in developing countries, industry critics pointed to price as a barrier to treatment, and a factor in the deaths of millions of AIDS victims. Considered socially responsible pricing in the form of differential pricing in different markets, with the ability to pay and social security. Analysis of AIDS drug prices between 1999 and 2003 show that, in fact, the high price of AIDS drugs in developing countries suboptimized contribution revenues in these markets. In the 1990s, multinational corporations could make a greater contribution to developing countries by reducing prices, and save thousands of lives. However, that could jeopardize the income in developed countries, and this, along with other factors, has created barriers to socially responsible pricing. Neither multinational corporations or governments of developing countries alone can not create the conditions for a socially responsible prices prevail. Defines the role of the various players in addressing barriers to socially responsible pricing, including transnational corporations, governments, non-governmental organizations and multilateral institutions such as the World Trade Organization and the World Health Organization. We also offer lessons for managers in industries with characteristics similar to the pharmaceutical industry, where socially responsible price as may be necessary, if not required. "Hide
by Sushil Vachani, N. Craig Smith Source: California Management Review 29 pages. Publication Date: November 1, 2004. Prod. #: CMR300-PDF-ENG

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Socially Responsible Pricing: Lessons from the Pricing of AIDS Drugs in Developing Countries

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