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Genessis Garcia
Professor Halper
Hist 2
20 October 2016
Pfizer
Since first hearing about the assignment on researching a specific corporation, immediately my thoughts flew to pharmaceutical companies. As a student with a focus in psychology, this assignment presented an opportunity to further my knowledge in a field that directly correlates to my choice of study. I was very ignorant on the specific details of the vast amount of pharmaceutical companies, their products, and any selfish actions company officials and directors may take; so again, it was the perfect opportunity to enhance my knowledge of something more relevant to me. Choosing a pharmaceutical company proved to be rather difficult, but I wanted to focus on one that is well known, rather large, and has experience in the manufacture and supply of pharmaceuticals that deal with a variety of psychological disorders.
Pfizer happened to be a perfect candidate, with its production of its well known antidepressant
Zoloft, popular erectile dysfunction drug Viagra, and the statement of being the “world’s largest pharmaceutical company” (Pampel 211). As discussed in class, a variety of pharmaceutical companies manage to cause a variety of problems or consequences due to company decisions and activity. Pfizer is no exception to this, as the company has had its own externalities.
Pfizer was founded around 160 years ago. German cousins Charles Pfizer and Charles
Erhart immigrated to America and bought a Brooklyn, New York building with $2,500 Pfizer borrowed from his father to start their chemical business, Charles Pfizer & Company, which
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officially opened in 1849 (Li 126). At this time, lack of refrigeration of meat in the United States created a huge risk of contracting intestinal worms, the only treatment was santonin, which was too bitter for people to swallow (Pampell 122). Erhart’s skills as being a former confectioner led to Pfizer and Erhart success in conducting a form of palatable santonin (Pampel 119). They made a better tasting form of santonin by mixing in almond-toffee flavoring, and soon their santonin was in high demand (Rodengen 11). After their success in santonin, Pfizer and Erhart began improving existing drugs (Li 126) and producing chemicals that were not yet manufactured within the United States, and selling them at lower prices than foreign competitors
(Rodengen 14).
The number of people suffering from diseases increased during America’s Civil War in the 1860s as the majority of soldiers lost their lives, not to bullets, but to illnesses (Rodengen
15). Pfizer took advantage of the “soaring demand” for painkillers, disinfectants, and preservatives; the company began to speed up production of chemicals, one of its most important being the germicide and disinfectant iodine (Rodengen 15). Pfizer had also provided cream of tartar, iodine, morphine (Lombardino 10), chloroform, and camphon (Rodengen 15). Many of the drugs that Union forces throughout the Civil War were supplied with were by Pfizer
(Rodengen 16). The profits Pfizer made during the Civil War caused the business to rapidly grow in sales, and in 1865, Pfizer achieved $1.4 million in its sales (Lombardino 10).
Although it increased in wealth, Pfizer faced a growing dependency on foreign suppliers of its raw materials. At times its imports were threatened, and so Pfizer took measures to ensure it would continue being supplied by issuing establishments of policies that would help it monopolize raw supply (Rodengen 20). In 1890, the chemical camphor became a successful
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product of Pfizer, but Japanese government had decided to restrict supplies of camphor
(Rodengen 20). According to Rodengen, due to the high demand of camphor, a halt in supply could have damaged not only the company’s production, but also its profit, so Pfizer built a partnership with two other business to form the Oriental Importing and Manufacturing Company, which ensured an uninterrupted flow of crude camphor (20).
Even with its attempts at monopoly, problems with Pfizer’s import of goods continued, particularly with its number one product, citric acid. Since 1880, citric acid, was always in high demand; it was used in a wide margin of consumer goods, from “making paper...to flavoring in foods and soft drinks” (Rodengen 18). Pfizer, relied heavily on shipments of limes and lemons from France and Italy, but its general raw material imports had increased in costs, many harvests were bad, and Pfizer began facing more and more competition in manufacturing of citric acid
(Rodengen 27). Because of it’s dependency, the Pfizer company faced a debt, which Rodengen states, “wiped out Pfizer’s profits and led to its first and only loss--4,000 in 1911--since its incorporation” (27).
In 1912, the increase of citrus harvests helped Pfizer’s situation, and by 1914 it was once again gaining profits--earning about $240,000 (Rodengen 27). But the gain was short lived after the beginning of World War I. Within six months of the war, citrus from Italy was halted by naval blockades and crude tartar from France was held back by German submarine blockades
(Rodengen 29). Furthermore, some of Pfizer’s suppliers, again, raised the export price on the citrate of limes, and even began to extract citric acid of its own (Rodengen 33).
To combat the company’s supply dependency, in 1919, scientist and chemist James
Currie and his assistant Jasper Kane began working fermentation of sugar to be a main producer
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of citric acid, as citric acid is a byproduct of fermentation (Lombardino 10). Currie was only able to produce a 50% yield of the citric acid, and Rodengen informs us that any attempts to make more resulted in failure (Rodengen 30).The thing that kept the company going was the war’s demand for the same medicines asking during the Civil War (Rodengen 30).
When WWI was over, sales declined by 6% in 1920, and lowered another 52% the following year (Rodengen 35). To make matters worse, the problem with Pfizer’s citric acid had increased further with the beginning of prohibition in the U.S. The demand for soft drinks that contained citric acid increased dramatically, but Pfizer could not keep up its supply (Rodengen
33).
However, Currie began achieving breakthroughs with fermentation by the end of 1921, and by 1922, the yields were more than 50 percent, most likely due to the use of “smaller pans and new ventilation system and constant fine tuning [which] contributed to the success”
(Rodengen 36). By 1923, Pfizer officially “broke the foreign monopoly with its new process” of fermentation and moved on to increasing its self sufficient production of citric acid (Li 126). In
1925, Building 21, a new plant dedicated to just the production of citric acid which opened in
1929, lead to Pfizer’s slowly domination of the citric acid field (Li 126). Fermentation techniques were attempted on other products as well, such as gluconic, salicylic, tartaric, and succinic acids (Rodengen 39). The use of deep-tank fermentation soon improved the quantity of citric acid yields (Lombardino 11).
When the Great Depression hit the US on October 24, 1929, the Pfizer company faced trouble as few people were capable of purchasing Pfizer products and by 1931, sales had fallen
27% and income 58% (Rodengen 43). Emile Pfizer, the company president, was extremely
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opposed to the idea of having to layoff any of his employees, and so he donated $250,000 of his own money to keep “workers employed at least three days a week” (45).
In 1934, Pfizer found that molasses could be substituted for cane sugar in the fermentation process for citric acid (Li 127). Through this discovery, production was both simplified and faster; Pfizer no longer had to use “expensive sugar, saving millions of dollars in raw material and production costs” (Li 127). Pfizer was also producing 5.9 million pounds of citric acid, and 5.8 came from molasses use, and sales rebounded 18% with a net income rising to 53% because it sold citric acid for a cheaper price (Rodengen 45). Pfizer was able to last throughout the Depression “without cutting a single member of its workforce” (Rodengen 45).
Rodengen states that the “loyalty to its employees” that Pfizer showed through the
Depression was rewarded as the Communist Party had attempted to unionize within Pfizer in
1934 (Rodengen 45). The United Chemical Workers Union had attempted to call a strike, but most employees “ignored the union and operations were unaffected” (Rodengen 45).
After the Depression, war soon followed.Pfizer became much more involved in World
War II than it did than in other wars. In 1939, WWII officially began as Germany invaded
Poland (Rodengen 49). Due to war, demands for drugs to combat infections was high, especially for penicillin, but no one had yet been able to produce the drug in large quantities (Lombardino
11). President Roosevelt had called a Committee on Medical Research in 1941 to make
“accelerating penicillin production a first priority,” and the need only intensified when United
States entered the war in December, after the bombing of Pearl Harbor by the Japanese
(Rodengen 60).
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Those within Pfizer strongly believed that penicillin can be produced quickly through fermentation, and soon, began to use deep-tank fermentation to produce greater quantities of penicillin faster (Li 128). On March 1, 1942, Pfizer’s first penicillin plant opened producing
“five times more penicillin than originally anticipated” (Rodengen 65).
The government soon authorized other companies to produce penicillin using the techniques Pfizer developed and shared; still, Pfizer was the most successful in mass-producing penicillin in quality and quantity (Rodengen 66). About 90% of the penicillin supplied to Allied
Forces at Normandy on D-Day was supplied by Pfizer (Li 128). Pfizer was given the “E” Award for “excellence in war production” on April 17, 1943 (Lombardino 11).
But when the war ended, Pfizer was faced with consequences of sharing its secrets to previous wartime partners who returned to being competitors (Rodengen 75). Pfizer did not have
“the name recognition of a drug maker,” and so began to sell its penicillin “in bulk to the more established and prestigious drug firms, including Lilly, Parke-Davis, and Upjohn, each of which then distributed the product under their own labels” (Li 128)
In 1950, Pfizer “discovered its first drug” terramycin, an antibiotic (Li 128). Pfizer made sure not to repeat its experience with penicillin, and marketed the medication directly under its label, making terramycin Pfizer’s first labeled product (Li 128). The drug was a “record breaking success” that allowed the company to begin its first steps at going global into overseas markets, those of which in soon include Belgium, Brazil, Canada, Cuba, England, Mexico, Panama, and
Puerto Rico by 1951 (Rodengen 82). Because of the global activity that Pfizer has taken, it opened and established a World Headquarters in Manhattan in 1961 (Rodengen 51).
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The late 20th century marked a number of new products. At the start of the 1980s, the drug Feldene becomes one of the “largest-selling prescriptions in the world” (Rodengen 102).
Through Feldene, the company had manage to produce its first total of over a billion dollars in the sale of one of their products (Rodengen 102).
The increase of products continued in the ‘90s. Pfizer had made a “triple rollout of major new drugs” within 1992 (Rodengen 102). The antidepressant prescription drug Zoloft was created (Rodengen 129). Zoloft was the most prescribed SSRI on the market, with “$3.36 billion in sales at its peak in 2004” (Li 135). Zithromax came after; an antibiotic that treats respiratory infection in adults and children earning $1 billion in 1998 (Rodengen 130). Pfizer was also able to sell off Zithromax successfully through strategic marketing directly to the consumer (Li 128).
Pfizer appealed Zithromax to parents as a small dose “stays in the body for a long time…a great selling point for parents struggling to get their sick children to take medicine” (Li 128). Many pediatric clinics decorated with Zithromax zebras, “a stuffed animal doll supplied by Pfizer sales representatives” (Li 128). Norvasc, a drug that lowers blood pressure, came after, and proved to be “one of Pfizer’s most successful drugs,” according to Rodengen, surpassing $2 billion in annual sales (129). Even after four years on the market, the sales rate continued to increase. And then in 1998, Pfizer introduced the “blue pill” Viagra (Wilson). Viagra was originally made to treat high blood pressure, but experimental subjects testing the drug reported “increased erection several days after taking a dose of the drug” and so was later sold as a treatment for erectile dysfunction (Wilson). Viagra ended up becoming a highly requested drug, with more than
40,000 prescriptions given to patients within the month that the drug was approved (Wilson).
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In the 160 years Pfizer has been running, its wealth has only increased. Much of the reason is Pfizer’s strong interest in profits, which the general public at times suffers for. Many of the medications that it provides, as well as the services in marketing off those medications, has created a variety of issues that have affected a variety of people, many and all of whom have consumed a drug Pfizer created.
One huge externality Pfizer creates is that it has participated in illegal testing of its drugs.
Pfizer was caught and prosecuted for illegal testing of the antibiotic Trovan in Kano, Nigeria, which occurred during a meningitis epidemic in 1996 (Goldacre 116). Pfizer’s drug Trovan was still in its experimental phase and was compared with another antibiotic, Rocephin (Perlroth).
The participants in the study were sick children at a Nigerian hospital who were there seeking treatment from Doctors Without Borders, a situation which, according to Perlroth, Pfizer would consider as an “opportunity.” Perlroth states that many pharmaceutical companies do trials abroad in order to “reduce research costs and win fast-track approvals” from regulators. The participants were not aware of the fact that they were participating in an experimental treatment, simply that they were being supplied with treatment (Goldacre 117). The parents of the children had argued that they had never been shown or read a consent form, nor told about the risks of
Trovan; Pfizer however, claimed that nurses obtained oral consent from parents (Perlroth).
Pfizer had distributed Trovan to about 100 children , and Rocephin to another 100 in
1996 (McNeil). Eleven children had died during the trial, “five after taking Trovan and six after taking an older antibiotic [Rocephin] used for comparison in the clinical trial,” while many other children had suffered from blindness, deafness, and brain damage (McNeil).
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When Pfizer was brought to court by the United States government, it successfully argued that the experiment it conducted was “no international norm requiring it to get informed consent for a trial involving experimental drugs in Africa, so the cases relating to the trail should be heard in Nigeria only” (Goldacre 117). In 2006, Pfizer was once again put on trial after the
Nigerian Ministry of Health released its report on the trial, which stated that “Pfizer had violated
Nigerian law, the UN Convention on the Rights of the Child and the Declaration of Helsinki”
(Goldacre 117). In 2009, the Pfizer signed a $75 million settlement with Nigerian government
(McNeil). Later in 2011, of the families whose children died, “four families received $175,000 each from a $35 million fund created under the settlement between Pfizer and Nigeria’s northern
Kano State (McNeil).
But Pfizer had continued throughout the court trial to strongly denied “any wrongdoings in the Trovan trials” (Goldacre 118). Pfizer continued to claim that their drug was not responsible for the deaths and continued to lie that their experiments were licenced when there was no such evidence that could be found (McNeil). Rather, Pfizer claims that the children “died from disease, not from the drug trial...and says it’s ‘proud’ of its role during the 1996 epidemic”
(Perlroth).
After their testing is conducted, the next step that pharmaceutical companies take is getting their prescription drugs approved and marketed, and where a second externality of Pfizer lurks. As shown through Pfizer’s results in Nigeria, the results of trials by pharmaceutical companies are “frequently left unpublished, and withheld from doctors and patients (Goldacre
43). Studies have also found that pharmaceutical companies typically produce more positive results in industry-funded trials than in independently funded trials (Goldacre 1). A study in 2010
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by researchers from Harvard and Toronto found that in over 500 trials made for pharmaceutical drugs, “85 per cent of the industry-funded studies were positive, but only 50 per cent of the government funded trials were (Goldacre 1). The trials that are shown to regulators and doctors are often industry-based, which cause the medications to be more likely approved. Furthermore, rules and policy pharmaceuticals companies must go through for each product aren’t always taken at face value, and instead most effects are skimmed over or not further researched and tested. Pampel explains that drug patent laws alone “favor the pharmaceutical industry” because drug companies often contribute “millions to political campaigns, and Pfizer itself spent $11.8 million on lobbying between 1998 and 2005 (32).
In 1998, the drug Rezulin that was used as a control to diabetes, began to produce serious effects to their consumers (Pampel 58). The FDA had approved Rezulin without any requirements for tests of the drug’s effects on the liver, and only results produced by public complaint showed that the drug led to liver failure (Pampel 58) Pfizer was faced with many lawsuits over Rezulin due to continued reports of death and serious liver damage caused by use of the drug (Pampel 58).
After the regulators ok medications, pharmaceutical companies use methods in order to gain a larger sum of doctors to prescribe products. In 2009, Pfizer faced charges over the marketing of the drug Bextra, which was approved by the FDA in 2001. According to the government prosecutor Michael Loucks, Pfizer had “invited doctors to consultant meetings, many in resort locations. Attendees expenses were paid; they received a fee for being there”
(Harris). Many of the products that Pfizer’s marketers sell use similar methods, all of which persuade doctors into endorsing Pfizer’s products. New York Doctor Rudy Mueller states that
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“It’s bribery. This is very effective marketing” (Dunbar 7). The biggest fear is that doctors will no longer be likely to prescribe the best form of medicine, but rather the medication of pharmaceuticals that provided the best treatment (Dunbar 7). By giving a relaxing, vacation setting, doctors who prescribe medicines are more likely to prescribe a Pfizer product. There are claims that this type of marketing has a “strong influence on doctors’ decisions” on the type of medications to prescribe” (Dunbar 7). Harvard Medical School professor Arnold Relman claims that “Anybody who’s been in that position knows that yes, those gifts, $60, $100, $40, again and again, do influence your attitude about that company and will influence the prescriptions that you write” (Dunbar 7).
This type of marketing is “still common in the drug industry” (Harris). Pharmaceutical companies “giving kickbacks to doctors or shortchanging federal program” has become a growing crime and has even lead to “increasing fines into the billions of dollars and would more vigorously prosecute doctors as well” (Harris).
Not only have doctors been bribed through Pfizer’s marketing, but Pfizer representatives also lie about the medication descriptions and effects. The Food and Drug Administration approved Bextra for the treatment of arthritis and menstrual cramps, not for acute pain, yet Pfizer instructed its sales representatives to “tell doctors that the drug could be used to treat acute and surgical pain at doses well above those approved” (Harris). The drug is being prescribed for a treatment that it was not created for, which directly affects any consumer who was prescribed the drug for those specific conditions, so not only would the consumer not be getting help for their current condition, but more complications may arise from side effects of the drug--which Bextra
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does have. The drug has been shown to increase risk to heart and to skin (Harris). Harris wrote that Pfizer was being held accountable for its illegal marketing.
Under the agreement with the Justice Department, Pfizer will pay $1.3 billion criminal
penalty related to Bextra and $1 billion in civil fines related to other medicines. In
addition, a Pfizer subsidiary, Pharmacia and Upjohn, will plead guilty to violating the
Food, Drug, and Committee Act for its promotion of Bextra. The company has agreed to
sign another corporate integrity agreement that requires senior company executives to
annually certify legal compliance and mandates that Pfizer post on its Web site many of
its payments to doctors. (Harris).
But even if Pfizer is being punished for the damages it causes, the amount charged isn’t much for compensation even if at the time it was considered a large sum and win by the government
(Harris). In the court case of Bextra, along with other pharmaceutical drugs, the amount of money from Pfizer taken by the government as punishment wasn’t much in comparison to
Pfizer’s wealth.
The government charged that executives and sales representatives throughout Pfizer’s
ranks planned and executed schemes to illegally market not only Bextra, but also
Geodon, an antipsychotic; Zyvox, an antibiotic; and Lyrica, which treats nerve pain.
While the government said the fine was a record sum, the $2.3 billion fine amounts to
less than three weeks of Pfizer’s sales. (Harris)
The government isn’t doing enough to extract from its wealth. To call it a “record sum” is rather ridiculous, if that loss can easily be profited back. Losing such a sum will not hurt them enough to stop any illegal actions. The proof is in the continuation of illegal marketing. The drug Lipitor
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was approved by the FDA as a drug to lower cholesterol back. According to Pampel, Pfizer falsely claimed that Lipitor was safer than other drugs that have the same purpose, but by 2014 consumption of the drug became associated with contracting type-2 diabetes and was ordered by the FDA to add a warning about possible risk of diabetes (41). For most consumers-- not just those who have taken Lipitor, but also other products of Pfizer marketed illegally-- the warning was too late.
There really is no just compensation for the company’s actions. There is no amount of money that can make up for knowingly tampering with a person’s health, especially if that person has died. While profits may matter for a corporation, an increase in sales shouldn't be at the cost of a human’s life. There is a chance that I’ll have the capability of prescribing medication to future patients. There shouldn’t be the possibility of anything I prescribe compromising the health of my patients. Medication is made for the purpose of treating people for health conditions, and potentially prolonging life; it should not be leading to new complications.
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Works Cited
Dunbar, Katherine R., ed. Antidepressants. Farmington Hills: Greenhaven Press, 2006. Print.
Goldacre, Ben. Bad Pharma: How Drug Companies Mislead Doctors and Harm Patients. New York, NY: Faber and Faber, Inc., 2012. Print
Harris, Gardiner. “Pfizer Pays $2.3 Billion to Settle Marketing Case.” New York Times. New York Times, 2009.
Li, Jie Jack. Triumph of the Heart: The Story of Statins. New York, NY: Oxford University Press, 2009. Print
Lombardino, Joseph G. “A Brief History of Pfizer Central Research.” Bulletin for the History of Chemistry. Vol. 25. 2000: pag. 10- 15. Division of the History of Chemistry of the American Chemical Society. Web. 18 Oct. 2016
McNeil Jr, Donald G. “Nigerians Receive First Payments for Children Who Died in 1996 Meningitis Drug Trial.” New York Times. New York Times, 2011.
Pampel, Fred C. Library in a Book: Prescription Drugs. New York, NY: Facts on File, 2010. Print.
Perlroth, Nicole. “Pfizer’s Nigerian Nightmare.” Forbes. Forbes, 2008.
Rodengen, Jeffrey L. The Legend of Pfizer. Fort Lauderdale, FL: White House Syndicate, Inc., 1999. Print.
Wilson, Jacque. “Viagra: The little blue pill that could.” CNN. CNN. 2013.