this year will co-market with
a revolutionary type of painkilling arthritis medicine named
is not far behind with its own version,
. Some analysts predict more than a billion dollars in annual sales for these medicines, the benchmark for a "blockbuster" drug.
Johnson & Johnson
American Home Products
each has an ulcer medication almost ready to market, which they too expect to be big sellers.
In 1998, the pharmaceutical industry experienced a 16% increase in annual earnings, and it anticipates exceeding that in 1999, so long as these drugs and a few others achieve blockbuster status.
Are these realistic expectations? Probably. The market demand for good health is universal and timeless, especially when, as in the U.S., there is public confidence in the drugs' likely effectiveness.
But it was not always so. While history reveals a constant clamoring for medications that improve appearance, deaden pain, heal illness or ward off the inevitable visit of the Grim Reaper, the supply of claimed remedies, which stretch back into prehistory, was not policed effectively until this century -- more than 150 years after the advent of mass advertising.
Shamans and witch doctors were the first practitioners of pharmacology. More than 5,000 years ago, Sheng Nong, the Chinese emperor, elevated herbal medicine to the level of a folk science. The Greeks, Romans, Egyptians and Europeans of the Dark and Middle ages all had physicians and wizards that prepared healing potions.
In Colonial America, medicines sold in apothecary shops were almost all imported from London. The British discouraged any American industry that would decrease trade with the motherland. The American Revolution, of course, ended that.
Americans created the pharmaceutical industry by taking what they had acquired from the British, supplementing it with herbal medications popular with American Indians and the folk remedies brought from Europe by recent immigrants -- and adding the element of mass advertising.
The booming American press played an important role. A Sept. 16, 1778, wartime issue of
The Rebel New Jersey Gazette
, for example, contains an advertisement by Philemon Elmer of Elizabeth Town, N.J., for the sale of "Jesuits Bark, also known as Peruvian Quill Bark
quinine, Opium, Spanish Flies, Glauber's Salts, Purified Nitre and Carolina Pink Root" among other nostrums. A notice in
The New York Gazette
from Sept. 28, 1776, touted "James's fever powders, Hooper's female pills and Hill's balsam of honey, a paste for preserving the teeth."
By the 1850s, the pill business in America was prospering, with promises of potency proclaimed in the press by "physicians," few of whom seemed to have first names. For example, Dr. Thurston's unrivaled anti-fever pills claimed to be the "most permanent and lasting cure for bilious intermittent and remittent fevers in all their modified forms, grades and complications, from the most violent and malignant attacks down to the most simplest, uncomplicated case of Ague or Chills and Fever." And what loving mother could resist buying "The Children's Panacea," a medicine "sovereign in all diseases to which children and youth are subject?"
By the beginning of the 20th century, the claims of cure, grown even more outrageous, had a national circulation.
Halls Catarrh Cure
, which offered a $100 reward "for any case of Catarrh that can't be cured," advertised in 16,000 newspapers around the world and mailed out 200,000 circulars a day! (A 1927 dictionary described catarrh as an inflammation of a mucous membrane, especially of the respiratory tract, accompanied by exaggerated secretions.)
Gullible America was spending $75 million a year for medicines that were hokum. For example,
Lydia E. Pinkham's Vegetable Compound
, a popular nostrum for "female weaknesses" depended on a 15% to 20% alcohol base to make the sufferer more comfortable. Not only was there no mention of alcohol on the label, many of the users of the product considered themselves teetotalers -- and manufacturer Lydia Pinkham herself was a member of the Women's Christian Temperance Union.
Dr. Hostetter's Stomach Bitters
were 44.3% alcohol, more potent than 80 proof whiskey.
Kopp's Baby Friend
, advertised as the perfect way to calm babies down, was made of sweetened water and morphine. Its competitor,
Dr. Winslow's Soothing Syrup
, bragged in a testimonial that it "makes 'em lay like the dead 'til mornin'."
No laws forbade these concoctions or restricted the advertising claims as to what the potions would cure. But the whistle was blown in a series of articles in 1905 by Samuel Hopkins Adams, in
, called "The Great American Fraud." The series exposed the "huge quantities of alcohol, appalling amounts of opiates and narcotics
and a wide assortment of varied drugs ranging from powerful and dangerous heart depressants to insidious liver stimulants" that were in these patent medicines. Public outcry resulted in
enactment of the Pure Food and Drug Act in 1906, which compelled the manufacturer to list on the label the contents of the medicine and to scale back the claims as to what it cured.
Food and Drug Administration
was established by the same legislation to examine the safety of new drugs and to vet the claims of drug manufacturers as to their effectiveness in treatment. The arthritis and ulcer medications to be introduced in 1999 will have been so scrutinized and approved by the FDA.
What are we to extract from all of this? First, nothing has changed: Provide a pill to restore health and self-esteem, and people will line up to buy it. Second, everything has changed: People seeking to restore their health or self-esteem through medication are far better off now than they ever were in choosing where to invest their time and money.
And where does this leave investors? Probably somewhere in between. The tumultuous tales of biotech stocks are legend, and yet some bad ideas just cannot be kept down, even after they are exposed as such. According to an
article, Lydia Pinkham's Vegetable Compound "for relieving hot flashes and certain other symptoms associated with change of life" was still being manufactured in 1971, with an alcoholic content of 13.5%, slightly higher than table wine.
Richard B. Marrin is a senior partner in the Wall Street law firm of Ford Marrin Esposito Witmeyer & Gleser. A litigator for almost 30 years, he has been involved in numerous large securities actions, from Equity Funding and Franklin National in the 1970s to the bank failures and write-offs in Texas and California of the 1980s. More recently, his work has involved the calamities afflicting Pacific Rim investors. Marrin is also the author of several books on American history of the 18th and 19th centuries.