Pharmaceuticals: An Industry Shaping the World

The pharmaceutical industry has transformed every aspect of our lives, from medicine and hygiene to the forefront of science and the global economy. Founded on the roots of medicine, chemistry, and manufacturing, and shaped by war and history, pharmaceuticals are leading us into the future.

The modern pharmaceutical industry has its origins in the apothecaries of Europe. An apothecary prepared ingredients and formulas for medicines, dispensing them to patients or physicians, much like the modern pharmacist. Apothecaries could be found in ancient Babylon, ancient Egypt, and ancient China, and are thought to have been introduced to Europe during the Islamic Golden Age. Arabic scholars rediscovered the medicines of ancient Greece and ancient India, combined with their own medical and pharmacy practices, and the Persian Canon of Medicine was a standard medical text from the 15th through 18th centuries in Europe.

While part of the modern pharmaceutical industry emerged from the apothecary, that’s only part of the story. Apothecary medicine was based largely on the idea of humours, which gradually became modern medicine. But pharmaceuticals also require a complex understanding of chemistry, which grew from the practice of alchemy. While alchemy was philosophically focused on concepts of purification and transmutation, and modern chemistry perceives the world very differently, it was the alchemists of Europe who conducted systematic, repeatable experiments of heating, dissolving, combining, and distilling various compounds. While alchemists were busy trying to turn lead into gold, along the way they extracted metals from ores, invented gunpowder, discovered sulfuric acid, hydrochloric acid, ammonium sulfate, nitric acid, arsenic, and oxygen. They built the first rudimentary table of elements, and made discoveries that improved metalwork, ceramics, glass, medicine, cosmetics, paints, dyes, and foods.

In the 18th and 19th centuries, two different types of pharmaceutical company would emerge.

One type was the apothecary that would grow into developing wholesale drugs. Merck, Schering, Hoffmann-La Roche, Burroughs Wellcome, Abbot, Smith Kline, Eli Lilly, Squibb, and Upjohn all started as apothecaries, and then became drug suppliers between 1830 to 1890.

The other type was the chemical company that would grow into a drug company. Many of today’s pharma giants started out producing chemicals, particularly dyes. Agfa, Bayer, Hoechst, Ciba, Sandoz, Imperial Chemical, and Pfizer all started as chemical companies.

In the early 1900s, these two types of company would begin to form a single industry, working with academic laboratories, fueled by a number of factors:

Increased understanding of chemistry. Fueled by Mendeleev’s newly published Periodic Table of the Elements in 1869, chemistry was exploding with innovation and new understanding.
Improved technology. It wasn’t until the late 1800s that indoor electric light became commonplace, and it played an incredibly important role in the laboratory, particularly in the use of microscopes. In 1893, Köhler illumination made microscope samples much easier to see and understand.
Improvements in medical knowledge. It wasn’t until 1813 that Agostino Bassi was able to prove that microorganisms cause disease, 1855 when John Snow tried to disprove the miasma theory, and 1864 when Louis Pasteur illustrated that microorganisms come from the air and not from spontaneous generation. Scientists of the day were immersed in exploring the world of antibodies and inventing vaccines.

Much of this early innovation was happening in Germany, where chemists and pharmaceutical companies had recently invented paracetamol, aspirin, barbital, and the antisyphilitic drug Arsphenamine. In the US, chemists were increasingly employed and valued in food and drug safety roles, but were restricted from creating drugs and medicines. Due to trade restrictions during WWI, US chemists and drug companies had to independently develop processes for making medications needed during wartime.

Pharmaceutical Industry Today

Today, the pharmaceutical industry is dominated by Switzerland. The Swiss dye factory Ciba has merged with Swiss pharmaceutical company Sandoz to become Novartis, the largest drug company by revenue in the world. Hoffmann-La Roche is also headquartered in Basel, and is the world’s third-largest pharmaceutical company. Switzerland is also the home of Bayer’s Consumer Health division, as well as the home of Alcon, the Lonza Group, Ferring Pharmaceuticals, and more. The industry employs about 135,000 people, accounts for 5.7% of the GDP, and comprises about 30% of the country’s exports.

Switzerland rose to prominence in the late 1800s, when the country had no patent laws, and their drug companies were free to copy and market discoveries made in Germany and France. Since copyright laws were passed in 1907, Switzerland has instead focused on building and perfecting a comprehensive pharma infrastructure, with the expertise in research and discovery, regulation and compliance, and large-scale production of new drugs and medicines. By providing the complete value chain, Basel continues to make itself simply the best place in the world to be a drug company.