Sterling Drug Inc
1901 William Erhard Weiss and Albert H. Diebold established the Neuralgyline Company (the forerunner of Sterling Drug) in West Virginia. The two men immediately laid the foundation for a style of aggressive marketing that would distinguish the company for years to come.
By 1907 they had accumulated enough profits to purchase the Sterling Remedy Company, and changed the company name accordingly.
1919 At the end of World War I the Sterling product line consisted of Neuralgyline, Danderine, Casaets, and California Syrup of Figs. Sterling offered $5.3 million to acquire Bayer's holdings in the U.S.A. and became the owner of the Bayer aspirin patent.
n a 1921 ruling that had far reaching consequences for the pharmaceutical industry Judge Learned Hand approved generic use for the word "aspirin." As a result, Sterling resorted to using "Bayer" in their product name in order to maintain a trademark for their product. Thus, at the beginning of the decade Sterling held a major portion of the worldwide aspirin market.
It was not long before the company began competing with its German counterpart. To avoid litigation, and to gain access to expensive ethical drug research as well, Sterling signed an agreement with I.G. Farben, Bayer's new parent company. In the 1923 agreement Sterling gave Bayer 50% of its stock in Winthrop Laboratories, a Sterling subsidiary, in exchange for Bayer's manufacturing information and the transfer of Bayer patent and technical data for future discoveries. The agreement called for Sterling to supply aspirin to the Latin American market only if Farben were at any time unable to do so. Yet as late as 1941, during the British blockade of Nazi occupied Europe, Farben asked Sterling to violate the agreement between the two companies and send Winthrop ethical drugs to Latin America. After two and a half days of debate William Erhard Weiss (at that time chairman of the board) ordered the shipment sent.
Weiss' decision soon proved disastrous; the U.S. Government ordered the resignation of Sterling management. In spite of Sterling Drug being placed on a British blacklist for Weiss' compliance with Farben's requested shipment, the company continued the process of establishing new companies in Latin America to protect both itself and Farben from the possibility of expropriation during the war. These activities of the company, in addition to German ownership of portions of Sterling subsidiaries and stock, severely compromised its position during a mounting U.S. war effort.
Tom and David Corcoran, two executives at the Sterling Ross subsidiary in Latin America, enlisted government support for an offensive action against Farben. A short time later Sterling emerged from its near brush with government sanctions as one of the bastions of free trade enterprise.
The newly installed executives devised a successful company strategy and emerged from the war with unprecedented profit margins.
1945 Sterling paid $9.5 million to buy out the one-half German interest in its Winthrop subsidiary. Yet the animosity between the two companies did not end.
1952 the West German company, through its American subsidiaries Shenley Laboratories and Norex Laboratories, filed an antitrust suit against Sterling demanding that the company either pay royalties on the now illegal 1923 and 1926 agreements or allow the American subsidiaries to manufacture and sell Bayer products in the U.S. based on a previous 1949 agreement.
Sterling was not financially harmed by this litigation. By the early 1970's sales of Bayer aspirin were more than $50 million a year.
Today, Sterling Drug retains exclusive rights to the use of the Bayer trademark for its aspirin product in the U.S., while the German company and its U.S. subsidiaries manufacture an assortment of industrial items under the same name. Outside the U.S. and its territories and Canada, use of the Bayer trademark belongs solely to the German company.
In addition to the sale of proprietary drugs that included a new arsenal of pain relievers (Cope, Vanquish, Measurin, and Midol), Sterling had entered the consumer product market and had become the most diversified member of the pharmaceutical industry. The product line for consumer items ranged from cosmetics and Beacon Wax to fragrances and d-Con insecticides. Sterling also manufactured chemicals and animal health products.
In the early 1970's Sterling began researching and developing their own ethical drugs. As well as marketing Neo-Synephrine nasal decongestant, NeGram, an antibiotic used to treat urinary tract infections, Sulfamylon, a cream used on severe burns, and pHisoHex, an antibacterial skin cleanser, Sterling also released pentazocine, a prescription analgesic (trademarked under the name Talwin) potentially regarded as highly profitable in the future. During this period total sales for Sterling products reached over $500 million a year.
There was growing competition in its virtual monopoly of the aspirin market. By 1971 scientists had finally understood exactly how aspirin works in the body. At the same time, however, Johnson and Johnson released its non-aspirin Tylenol and marketed it as a superior product without the possible side effect of an upset stomach ordinarily associated with aspirin. Then came Bufferin, Excedrin Extra-Strength, and other analgesic compounds claiming faster relief, higher potency, and no upset stomach. By 1983 Bayer aspirin held only 10% of the $1.3 billion aspirin market.
See Also
Sources of Information
- [1] Company histories