The 1948 launch of Aureomycin was the first in a rush of new antibiotics. Lederle’s rivals marveled at how a single drug produced huge profits. In its first year it captured more than a quarter of all American antibiotic sales. Aureomycin’s profit margin was an impressive 35 percent; that compared to a measly 3 percent on Lederle’s nonantibiotic drugs.1 Competitors were pushing as fast as possible the development of their own “wonder drugs.”
Many doctors and patients thought of the drugs as a frontline defense not simply for serious bacterial contagions but also for sinus, urinary tract, and dental infections, acne, even prophylactically at the first signs of a fever, earache, scratchy throat, or runny nose. One microbiologist estimated that overenthusiasm about the new drugs meant they were prescribed unnecessarily more than 90 percent of the time.2 The FDA did not seem overly bothered by the unrestrained dosing since there were few reported side effects.3 Accounts of itching, nausea, upset stomach, and hives were dismissed as the inevitable sensitivity of a few patients. A handful of reports identified far more serious consequences, including fungal and bacterial superinfections as the drugs also killed off the body’s good bacteria, antibiotic poisoning, and the beginning of drug resistance. That news was lost in the public’s enthusiasm for antibiotics.4 I
One reason for the FDA silence was that Walter Dunbar, the chemist who had become the FDA’s commissioner in 1944, did not want the agency to be perceived as a bureaucratic obstacle to the rapid deployment of lifesaving antibacterials. Even if Dunbar had wanted to sound a cautionary note about the overuse of antibiotics, the FDA had few tools at its disposal. It was short on staff and Congress had cut its budget to $5 million. On average, the FDA managed to thoroughly review only one in every dozen new drug applications.5 It was largely a bystander as the antibiotic gold rush became the most lucrative period in pharmaceutical history and upended the industry’s sales and marketing practices.
Parke-Davis, whose previous hits had been the hormone Adrenalin, the anticonvulsant Dilantin, and the antihistamine Benadryl, was the first to release an Aureomycin competitor. In 1949, it announced the sale of Chloromycetin, a broad-spectrum antibiotic it had tested in its labs for two years. Parke-Davis set its largest advertising budget and doubled its sales force for a drug that Collier’s praised “as the greatest antibiotic since penicillin.”6 In under a year, Parke-Davis bragged that with revenues of $138 million it had claimed the title of the world’s largest drug company. Forty percent of that came from Chloromycetin (Parke-Davis continued marketing it despite occasional reports it sometimes induced a rare blood disorder).7
The success of Lederle and Parke-Davis only whet the appetite of John McKeen, Pfizer’s hard-charging chairman. Born in Manhattan and raised in Brooklyn’s Flatbush neighborhood, the no-nonsense forty-eight-year-old McKeen had joined Pfizer in 1926. A former star college quarterback, he had come to the attention of management when he developed a paint that solved the company’s costly corrosion problem on its stainless-steel manufacturing equipment. Because he demonstrated a talent for cutting costs while increasing production yields, by 1937 he was in charge of quality control and plant construction.8 By the time he became president in 1949, he was anxious to remake the small Brooklyn chemical and mining company into a fully integrated pharmaceutical firm. Before the wartime penicillin project, Pfizer was best known as a manufacturer of citric acid. It never marketed any medication under its own name but instead the few it produced were for other drug firms. Without its own broad-spectrum antibiotic, the company derived most of its revenue as the largest manufacturer of penicillin and streptomycin, which it sold under the brand names of rivals.9 Both drugs were still popular, but their tumbling prices had put the company under tremendous pressure, cutting deeply into Pfizer’s profit margins. There was no further room for discounting.
McKeen was impatient for a new product and wanted what one industry analyst dubbed “a speed record among antibiotics.”10 He assembled a team of virologists, biochemists, bacteriologists, chemical engineers, pharmacologists, and microbiologists, challenging them to accomplish in a year what had taken fifteen with penicillin.11 Pfizer had been gathering and testing soil samples since 1945 at a state-of-the-art lab in Terre Haute, Indiana. There it had amassed more than 135,000 samples, some sent by foreign correspondents, pilots, even missionaries.12 A Pfizer chemist later recalled that they collected “soil samples from cemeteries; we had balloons up in the air [to] collect soil that was windborne; we got soil from the bottom of mine shafts… [even] the bottom of the ocean.”13 Despite more than 20 million tests, the lab’s microbiologists had not found a new and effective antibiotic culture.
By 1950, pharmaceuticals for the first time became the country’s most profitable industry.14 McKeen felt, however, as if Pfizer had missed the party. In a speech that March to the New York Society of Security Analysts, he was blunt: “If you want to lose your shirt in a hurry, start making penicillin and streptomycin.… From a profit point of view, the only realistic solution to this problem lies in the development of new and exclusive antibiotic specialties.”15 McKeen often referred to streptomycin as “distress-merchandise.”16
Pharma’s old guard, such as George Merck, did not believe that drug firms should put profits first. Merck thought it was possible to invest in research to produce drugs for the common good while also delivering the solid financial results demanded by investors. That philosophy was one of the reasons that Fortune cited Merck as the “most admired” company in America for a record seven consecutive years. In 1950, while McKeen was complaining about the poor returns on penicillin and streptomycin, Merck-associated scientists won the Nobel in Medicine for their synthesis of cortisone, the first of nearly two dozen subsequent Nobel awards.17
When George Merck addressed the graduating class of the Medical College of Virginia later that year, he set a high bar for the industry. “We try to remember that medicine is for the patient. We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been.”18
Those who knew Merck did not doubt his sincerity. He often spoke privately about his company as if it were a quasi-public trust. Many at that graduation ceremony accepted what Merck said in good faith. That was evidence of how much goodwill the industry had at the start of the second half of the twentieth century.
Not everyone was enamored, however, with Merck’s “medicine is for the patient” philosophy. When McKeen heard it, he dismissed the words as a clever public relations ploy.19 Executives in the McKeen mold believed that no drug was worthwhile if it did not return a hefty profit. One obstacle, thought McKeen, was that almost all the industry’s scientists collected the same salary whether they made a Nobel Prize–winning discovery or found nothing in their testing. They very rarely got a bonus if a drug became a blockbuster, nor did they get their pay docked if something they invented failed in clinical tests. Their interests were pretty much the same as if they had worked for a university. McKeen believed that giving the researchers so much independence was a mistake. He wanted to empower the sales and marketing division with the authority to guide the scientists toward the medicines that might sell best. In McKeen’s judgment, good marketing could sell even a mediocre drug.
Everything at Pfizer seemed to hinge on a yellow gold-colored powder its scientists had extracted from soil taken not far from the company’s Terre Haute lab. It was labeled PA-76 (PA stands for Pfizer Antibiotic). Further testing demonstrated its effectiveness against more than a hundred Gram-positive and Gram-negative bacteria as well as even some fungi. The scientific tradition was that the discoverer named the drug. In the case of PA-76, McKeen took charge. From a list of several dozen names he chose Terramycin (Latin for “high land”). “I wanted a name connected with the earth,” he later said, “and one that could easily be recalled by doctors, scientists and people in general.”20
There was a small problem, however. Pfizer’s scientists reported that the chemical structure of its drug appeared identical to Lederle’s Aureomycin. It was as if each company had found and invented the same medication. Lederle had been a few steps ahead and had a patent on its drug. McKeen was not concerned whether they were the same. He needed someone to figure out how to make Terramycin different in a patent application. Differentiating the molecular structure of the two drugs had stymied Pfizer’s chemists. McKeen hired Robert Burns Woodward, the world’s best-known chemist. He had written hundreds of highly cited, peer-reviewed papers and earned every prestigious award except for a Nobel in his more than four decades at Harvard (he added a Nobel in Chemistry to his résumé in 1965).21
Woodward found Aureomycin was missing a single oxygen atom present in Terramycin.22 It was a trifling difference, even for a chemist. It did not affect, Woodward said, the way the drugs worked in patients. But it was all McKeen needed. The extra oxygen atom allowed Pfizer’s attorneys to file an application with the Patent Office.23
Pfizer pressed for expedited processing. In an affidavit included in its submission, McKeen noted that Pfizer had “spent large sums of money in the research and development” of Terramycin and said it “must decide in the near future” whether to “invest heavily” to manufacture and sell the drug.
He had made no effort to characterize his company’s antibiotic research as motivated by a desire to better serve public health. He instead made it clear that Pfizer was looking for a solid return on its investment.24 The Terramycin patent was issued in just seven months, a record. (The average drug patent at the time took three and a half years.)25
Pfizer had started clinical trials while the patent application had been pending. McKeen selected Gladys Hobby, a Columbia University microbiologist, to collate the results from over one hundred physicians nationwide. Hobby had led some of the early penicillin testing and she conducted her own trials on Terramycin that December at Harlem Hospital. It was the same place where Louis Wright had run the clinical trials the previous year for Aureomycin. By the time the patent was issued, Hobby had sent the stellar clinical results to McKeen.26
In preparation for Terramycin’s sale, Pfizer’s directors unanimously approved changes to the company’s bylaws so it could bypass traditional drug distribution companies and instead itself sell directly “to retailers, wholesalers, and hospitals.”27
FDA approval was the last hurdle before the eight newly hired “detail men” could start work in earnest.28 Some of Pfizer’s rivals had detail departments for more than a decade. The job entailed personal visits to doctors’ offices for promoting the company’s drugs. Good detail men boosted sales for a drug even though they did not take orders for them. All they did was persuade physicians—the indispensable middle person in the pharmaceutical-to-consumer model—to write prescriptions for the company’s brands.
In late February 1950, Pfizer submitted the drug to the FDA for approval. All eyes turned to Henry Welch, who had recently become the chief of the FDA’s powerful Division of Antibiotics. Welch—who had a doctorate in bacteriology from Western Reserve—had joined the FDA in 1938 after the Food, Drug, and Cosmetic Act had expanded the agency’s powers. During World War II he had overseen the division responsible for certifying the quality of penicillin manufactured by pharma companies.29 In 1950, he had cemented his status as a prominent figure in the emerging world of antibiotics as the editor of a new publication, The Journal of Antibiotics. His editorial board had five Nobel Prize winners in medicine, including Alexander Fleming, Selman Waksman, and Howard Florey. In his new role as chief of the Division of Antibiotics, Welch single-handedly wielded influence to fast-track or delay an antibiotic application. A postponement could complicate any firm’s well-planned drug launch, adding months to the rollout and costing millions in lost sales.
Welch recommended to the FDA commissioners that they accept Pfizer’s clinical studies at face value and on March 23, 1951, the FDA approved Terramycin.30 It was the first drug under the Pfizer label that the company had developed on its own, from discovery in the lab to sales to the public.31
Jack McKeen had his broad-spectrum antibiotic. But he knew that his company lacked the sales and marketing know-how to sell it. Some rivals thought that shortcoming would cause Pfizer to stumble. McKeen, however, had not invested so much time and money to let the drug fizzle. He turned for help to New York’s Madison Avenue. No traditional ad agency, however, wanted the pharma business because the marketing was restricted by what drug companies considered respectable ways to promote their products. “Respectable” translated into boring by Madison Avenue standards. The ads that ran in specialized medical journals were often reproductions of the drug’s packaging insert. The industry that had gotten its start with outrageous claims for dubious patent medicines, plastered in newspapers and on billboards across America, had morphed into the dullest business sector.
McKeen wanted someone capable of devising an unorthodox campaign that not only worked for Terramycin but could be the template for future Pfizer drugs. It took McKeen little time to settle on the right man, Arthur Sackler, an ad executive who was also a physician. Sackler was at the forefront of the embryonic medical advertising industry. There were only a handful of agencies staking out the fledgling market. McKeen had made a good choice. Sackler’s aggressive and brilliant marketing would not only make Terramycin a blockbuster. In the process, he would forever transform how the pharmaceutical industry sold its drugs.
I. No organized medical group existed to serve as a central repository for collecting and disseminating the risks and side effects as they were reported. The Infectious Diseases Society of America, the professional organization that is a critical resource for physicians and scientists, was not created until 1963.