Abstract
The pharmaceutical industry has produced the majority of new medicines, as well as imaginative science and considerable profits since the nineteenth century.1 Its close relationship with the medical community, which in the United States developed during the Progressive Era, was instrumental to this success, and changed the character of medical practice as much as it did the industry itself.2 Despite the importance of the pharmaceutical manufacturers in the development of modern medicine, however, they have almost been ignored in standard medical history accounts.3 When the commercial significance of medicine has been examined, it has usually been from the point of view of the economics of private practice, insurance and hospitals; not the companies.4
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Notes
The drug industry has attracted only slight attention from business and medical historians. Recent works have included some considerations of limited scope. See Glenn Porter and Harold Livesay, Merchants and Manufacturers: Studies in the Changing Structure of Nineteenth Century Marketing (Baltimore: Johns Hopkins University Press, 1971);
and Alfred D. Chandler, Jr, The Visible Hand. The Managerial Revolution in American Business (Cambridge, Mass.: Harvard University Press, 1977) for a few comments which place the nineteenth century drug merchants into the broadest context of American economic development.
Historians of medicine have been even more remiss, though at least one general history gives us some idea of the role of drug makers: see Erwin H. Ackerknecht, Therapeutics from the Primitives to the Twentieth Century (New York: Hafner Press, 1973);
and Oswei Temkin has some insights in ‘Historical Aspects of Drug Therapy’, in Paul Talalay (ed.) Drugs in Our Society (Baltimore: Johns Hopkins University Press, 1964) pp. 3–16.
Any mention of drug manufacturers was probably scorned at the time Fielding H. Garrison wrote An Introduction to the History of Medicine, 4th ed., (Philadelphia: W. B. Saunders, 1929); and perhaps this also explains Richard Shryock’s single, short paragraph in The Development of Modern Medicine. An Interpretation of the Social and Scientific Factors Involved (Madison: University of Wisconsin Press, 1947, reprinted 1979); even though his comments point to the significance of the industry for bacteriology and immunology.
Peter Temin’s peculiar neglect of the companies in his history of drug regulation is even more surprising, see Peter Temin, Taking Your Medicine. Drug Regulation in the United States (Cambridge, Mass.: Harvard University Press, 1980).
The imaginative science to come from drug company laboratories is celebrated in such general histories as John Thomas Mahoney, The Merchants of Life. An Account of the American Pharmaceutical Industry (New York: Harper, 1959) as well as being heralded in advertising. On the profitability of drug companies, the Fortune 500 listing of major corporations by net profit after taxes usually puts ten or more in the top fifty by percentage of invested capital, or by percentage of sales. Of Philadelphia-based firms alone, the 1958 rankings by invested capital show American Home Products Corporation (which includes Wyeth Laboratories) first, Smith Kline and French Laboratories second, Warner-Lambert Pharmaceutical Company twenty-ninth. Merck and Company (now based in New Jersey), a firm built on early Philadelphia manufacturers, ranked fiftieth (Fortune 500, 1958).
See also Walter Measday, ‘Pharmaceutical Industry’, in Walter Adams (ed.) The Structure of American Industry (New York: Macmillan, 1977) pp. 250–84. In the 1980 Fortune list (5 May 1980) pp. 274–301 pharmaceutical companies (industrial group 42) had the highest median return on sales (8.9 per cent), led by Smith Kline (17.3 per cent), Merck (16.0 per cent) and Schering Plough (15.5 per cent). Fifteen drug makers were among the top 500 industrials, including American Home Products (99th), Warner-Lambert (105th), Brystol-Myers (122nd), Pfizer (123rd), Merck (147th), Eli Lilly (163rd), Squibb (188th), and Abbott Laboratories (197th).
See also David Schwartzman, Innovation in the Pharmaceutical Industry (Baltimore: Johns Hopkins University Press, 1976) pp. 76–80.
See Robert H. Wiebe, The Search for Order 1877–1920 (8New York: Hill and Wang, 1967)
and Glenn Porter, The Rise of Big Business 1860–1918 (New York: Crowell, 1973).
For medicine during the period see James G. Burrow, Organized Medicine in the Progressive Era. The Move Toward Monopoly (Baltimore: Johns Hopkins University Press, 1977).
See, for example, Seymour E. Horns, Economics of American Medicine (New York: Macmillan, 1964).
Their place within the medical community was a critical factor in the evolution of drug makers into a science-based industry. Philadelphia has been studied as a medical community in a number of historical and sociological studies. See, for example, James H. S. Bossard, ‘A Sociologist Looks at the Doctors’, College of Physicians of Philadelphia, Transactions, (1937) pp. 1–10, and Leo O’Hara, ‘An Emerging Profession, Philadelphia Medicine, 1860–1900’, PhD dissertation, University of Pennsylvania, 1976.
See George Washington Corner, Two Centuries of Medicine, A History of the School of Medicine, University of Pennsylvania (Philadelphia, J. B. Lippincott, 1965); and O’Hara, ‘Philadelphia Medicine’.
Parke Davis, and E. R. Squibb to a slightly lesser extent, have received some scholarly attention. See Peter Steckl, ‘Biological Standardization of Drugs before 1928’, PhD dissertation, University of Wisconsin, 1969;
and Malcolm Weikl, ‘Research as a Function of the Pharmaceutical Industry’, MA thesis, University of Wisconsin, 1962, both based primarily on Parke Davis material.
This was, of course, the period when some other industries instituted research and development. In the electrical industry, for example, laboratories were built by General Electric, RCA and Marconi. More pertinently, chemical companies in Germany had, by 1890, built extensive research departments. See Kendall Birr, Pioneering Industrial Research (Washington, DC: Public Affairs Press, 1957).
Hugh Aiken, Syntony and Spark. The Origins of Radio (New York: Wiley, 1976).
The best general history of American pharmacy is the Glen Sonnedecker edition of Edward Kremers and George Urdang, History of Pharmacy, 4th ed. (Philadelphia: Lippincott, 1976).
The term ‘ethical pharmaceuticals’ came into use after the turn of the century and first seemed to mean ‘honest’. Later it was generally defined as medicines not advertised to the public, in contrast to ‘patent medicines’. Patent medicines were, of course, rarely patented. They relied on secret formulas to protect their markets. See James Harvey Young, The Toadstool Millionaires: A Social History of Patent Medicines in America Before Federal Regulation (Princeton: Princeton University Press, 1961).
Industrial research was used in other industries for a similar range of purposes. Some companies, for example, were particularly concerned about patenting around product lines to protect them. See Leonard S. Reich, ‘Radio Electronics and the Development of Industrial Research in the Bell System’, PhD dissertation, Johns Hopkins University, 1977.
A sense of the physician’s demand is clearly evident in Sinclair Lewis, Martin Arrowsmith (London: Jonathan Cape, 1925).
United States Bureau of the Census, Twelfth Census (1900), Manufacturers Part I, Vol. III (Washington, DC: US Census Office, 1902).
William Becker, ‘Wholesalers of Hardware and Drugs, 1870–1900’, PhD dissertation, Johns Hopkins University, 1969, pp. 170–1.
George Winston Smith, Medicines for the Union Army (Madison: American Institute for the History of Pharmacy, 1962) p. 60;
Roscoe C. Clark, Threescore Years and Ten, A History of Eli Lilly and Company (Columbia: Lilly, 1964) p. 22.
Lawrence G. Blochman, Doctor Squibb (New York: Simon and Schuster, 1958) pp. 208ff. George Winston Smith, (ed.) ‘The Squibb Laboratory in 1863’, Journal of the History of Medicine and Allied Sciences, 13 (1950) pp. 382–94.
On the Philadelphia chemical industry see Williams Haynes, The Chemical Industry (New York: Van Nostrand, 1954).
Mulford, Upjohn, Pfizer and others were still very small manufacturing pharmacies in the 1890s. Lederle Laboratories, formed in 1904, was able to capture one secure market based on antitoxins. See Mahoney, The Merchants of Life, p. 163 for Lederle. The actual size of these relatively small companies is difficult to determine since records of assets and number of employees are not always available. Typical of pharmaceutical manufacturers was Charles Pfizer and Company. Formed in 1849, it employed fewer than 200 people after the turn of the century. In 1891 its inventory value was estimated at about $238700, and in 1900 it was incorporated with $100000 in authorised capital. In 1906 sales amounted to $3 441 000. Samuel Miles, Pfizer … An Informal History (New York: Pfizer, 1978) p. 9. The Lilly company was of similar size. It was incorporated in 1881 and capitalised at $40000 and in 1899 sales came to $423 000.
E.J. Kahn, All in a Century, The First 100 Years of Eli Lilly and Company (Indianapolis: Eli Lilly, 1976) pp. 23, 35. Upjohn started in 1887 with capital stock of $60000 but failed to expand as quickly as its competitors. Haynes, Chemical Industry, vol. 3, p. 455. Parke Davis was incorporated in 1875 with capital of $81 950 and grew to be one of the world’s largest pharmaceutical manufacturers by the end of the century. Sales averaged $3.2 million a year between 1892 and 1901. Haynes, ibid., p. 320 and Mahoney, Merchants of Life, pp. 72–3. In Philadelphia only Smith Kline and French was anywhere near that size. Formed by a series of mergers, the last in 1891, the company reached $3 million in sales in 1902. Tobias Wagner, ‘A Story of Growth’, unpublished manuscript, c. 1966, SmithKline Archives.
See, for example, John J. Beer, ‘Coal Tar Dye Manufacture and the Origins of the Modern Industrial Research Laboratory’, Isis, 49 (1958) pp. 123–31.
Early scientific activity at Parke Davis, for example, was collecting and classifying; see Chapter 2. This tradition had fallen away for the most part by 1895 when laboratories were built, although the H. K. Mulford Company sponsored a botanical expedition in the style of the previous century in 1921–2, when they backed Henry H. Rusby, a Columbia University botanist, on an Amazon expedition. See file ‘Rusby, H. H., M.D., Description of New Genera and Species of Plants Collected on the Mulford Biological Exploration of the Amazon Valley, 1921–1922’, Mulford papers. See also George A. Bender, ‘Henry Hurd Rusby’, Pharmacy in History, 23 (1981) pp. 71–85.
Robert H. Wiebe, The Search for Order 1877–1920 (New York: Hill and Wang, 1967) pp. 113–16.
See, for example, Rene Vallery-Radot, The Life of Pasteur (New York: Sun Dial Press, 1937) Chap. XII, pp. 390ff.
Richard H. Shryock, The Development of Modern Medicine, An Interpretation of the Social and Scientific Factors Involved (Madison: University of Wisconsin Press, 1974) pp. 294ff.
See, for example, Anon., How to Succeed as a Physician, Heart to Heart Talks of a Successful Physician with his Brother Practitioners (Meriden, Conn: Church Pub. Co., 1902) pp. 94–96.
Selman Waksman, who later gained fame for his work on antibiotics, worked in a company producing serums before the First World War and gained greatly from the experience. ‘The two years that I spent at the commercial company [Cutter Laboratories] suggested to me new ideas, new approaches, and especially new tools for further study and for broadening the whole field of microbiology.’ Waksman spent the rest of his life on producing new drugs both inside and outside companies. Selman A. Waksman, My Life with the Microbes (London: Scientific Book Club, 1958) pp. 89–90, 95–8, 295.
Mulford used their staff to maintain close contact with the Philadelphia College of Pharmacy. See ‘A Visit to the H. K. Mulford Company’, Philadelphia College of Pharmacy, Alumni Report, 35 (1899) pp. 252–57; A. Fabian and W. H. Guest, ‘A Vist to the Bacteriologic Laboratories of the H. K. Mulford Company’, Alumni Report, 36 (1900) pp. 30–4.
On the development of a strategy of patent use by German chemical companies, see J. Liebenau, ‘Patents in the Chemical Industry’, in The Challenge of New Technology (London: Gower, 1987).
See Reich, ‘Radio Electronics’, on electrical manufacturers. On the general use of patents at the turn of the century see Story B. Ladd, ‘Patents in Relation to Manufacturers’, United States Census 1900, Vol.10, Manufacturers, No. 4, Selected Industries (Washington DC: USPGO, 1902).
Mulford offered a prize for outstanding students at the Philadelphia College of Pharmacy. See Joseph England (ed.) The First Century of the Philadelphia College of Pharmacy, 1821–1921 (Philadelphia: Philadelphia College of Pharmacy, 1922). They also allowed the students to take frequent tours around their plant (Philadelphia College of Pharmacy, Alumni Reports, of 1896, 1897, 1899, etc.) and maintained a herb garden for the school. See ‘Correspondence, Philadelphia College of Pharmacy and Mulford — Glenolden site’, 1925, file in Mulford papers.
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Liebenau, J. (1987). Introduction: Medicine and Technology. In: Medical Science and Medical Industry. Studies in Business History. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-08739-6_1
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