Pfizer Rises to the Occasion and Changes Big Pharma Forever
On this day in economic and financial history...
Pfizer's Viagra (sildenafil citrate), the little blue pill with the big marketing campaign, was first cleared for sale by the FDA on March 27, 1998, becoming the first drug cleared to treat erectile dysfunction in the United States. Originally developed in 1989 at a Pfizer research facility in historic Sandwich, England to treat hypertension and angina pectoris, the drug soon became man's second-favorite invention to come out of the town of Sandwich when early clinical trials found that it was a lot better at creating erections than curing angina.
Pfizer took the opportunity to penetrate a virtually untapped market. Sildenafil gained a patent in 1996 as it moved through the latter stages of its erectile-dysfunction clinical trials. The drug became a raging success right out of the gate, thrust into the spotlight by one of the first major publicity campaigns ever mounted for a prescription drug. With public figures such as Bob Dole (fresh off his failed 1996 presidential candidacy -- you know that if Bill Clinton had lost, he would have been the political pitchman instead) and sports stars like Pele and Rafael Palmeiro promoting it, Viagra became one of Pfizer's biggest and most durable successes.
In its first year alone, Viagra brought Pfizer a billion dollars in sales. The drug's smashing success caused several well-endowed competitors to spring up, including Bayer and GlaxoSmithKline's Levitra and Eli Lilly's Cialis. A decade after its introduction, Viagra was producing monster results for Pfizer, accounting for $1.9 billion in annual sales in 2009. Shortly afterward, the global market for erectile dysfunction surpassed $5 billion in cumulative revenue. It was six years after Viagra's FDA approval that the Dow Jones Industrial Average added Pfizer to its ranks, an acknowledgment of the drugmaker's impressive quadrupling of revenue over that short time frame.
Viagra couldn't maintain its position as the market leader forever: Cialis passed the ED pioneer about 12 years after its FDA approval. However, its influence on the drug industry has been more important than its impact on Pfizer's bottom line. Sales and marketing have become a much larger part of pharmaceutical companies' strategies, and roughly 30% of the industry's expenses are sales- and marketing-related. In some cases, drugmakers spend more on marketing than on research and development! Viagra isn't set to lose its patent protection until 2019, but with 20 million American men already familiar with it, the drug is likely to remain a blockbuster for years to come.
Viagra wasn't the only British chemical with a major March 27 milestone. Research chemists Reginald Gibson and Eric Fawcett, working at Imperial Chemical Industries, accidentally discovered the plastic polyethylene on March 27, 1933. Faulty equipment had introduced unwanted oxygen to a reaction of ethylene and benzaldehyde, creating a lump of plastic substance that held promising opportunities. Within three years, polyethylene was patented, and two years later it went into commercial production, around the same time nylon became a commercial product in the U.S.
After World War II, polyethylene became a popular commercial plastic, used in everything from plastic bags to plumbing pipes. Today, roughly 80 million tons of polyethylene is manufactured every year. Dow Chemical is the world's largest manufacturer, responsible for roughly a 10th of the world's annual polyethylene production. Over in Britain, they occasionally call this plastic "polythene," as in the Beatles' Abbey Road song "Polythene Pam."
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