History of Pharmaceutical Industry

The pharmaceutical industry began to take shape in the United States during the latter half of the 19th century. By the early 1900s, the federal government passed a series of laws that called for the regulation of prescription drugs. Certification from the Food and Drug Administration was required for all pharma products from 1938 on. The pharmaceutical industry emerged as a leading global industry by World War II.

Pharma Pioneers

• Early leaders in the field of manufactured medicine in the late 1800s included Squibb, Park-Davis, Lilly, Abbott, and Upjohn & Searle. Other pioneers of the 19th century included Bayer, Pfizer and Johnson & Johnson. Merck was formed during World War I.

Government Regulation

• The U.S. government began to regulate pharmaceutical companies and products in the early 1900s. In 1902, the federal government began to issue licensing for the marketing of biological chemicals. The Pure Food and Drug Act of 1906 required all medicine manufacturers and companies that sold pharmaceutical products to be truthful in their labels.

Aspirin

• Aspirin was one of the first pain treatments to be marketed in tablet form. It was invented in 1897 by Felix Hoffman of Bayer. He was searching for a painkiller to treat his father's arthritis. Hoffman invented heroin shortly after aspirin. Both products were marketed by Bayer, with heroin being the early hit, until being banned by the federal government in 1920 after concerns about heroin's addictive properties.

Mental Treatment

• Following World War II, there was a dramatic increase in demand for treating mental and emotional problems, which led to windfall profits for big pharmaceutical companies.

Tylenol Case

• In 1982 a series of seven murders linked to Tylenol consumption shocked American consumers. It was found in these incidents that Tylenol, made by Johnson & Johnson, was laced with cyanide. James William Lewis was charged with trying to extort J&J out of money as an offer to stop the killing. He served a 12-year prison sentence, and the case drove the pharmaceutical industry to create tamper-free packaging for its products.

Industry Profits

• In 2006, the pharmaceutical industry was ranked the No. 1 most profitable industry on the Fortune 500. In the 2009 survey, however, in the midst of economic recession, the pharmaceutical industry was ranked third.

Safety Concerns

• In the 2000s, a wave of medical researchers voiced their concerns about a series of cases involving adverse effects of FDA-approved drugs. Merck pulled Vioxx off the market in 2004 due to a link with heart attacks. In 2006 a report by Dr. Gary Lull revealed that nearly 800,000 Americans die every year as a result of taking medicine made by pharmaceutical companies. According to the Journal of the American Medical Association, complications from prescription drug use are the fourth leading cause of death in America.