TABLE 11.-Manufacturers' sales of medicinal grade antibiotics: 19561 motional efforts are being made to stimulate agricultural and industrial uses with increases in production and sales as indicated by chart 3 and parts A and B of chart 6. Tetracycline, the highest value single item, was all sold in medicinal grade in 1956. In 1955 it represented over 26 percent of the total value of sales from manufacturers' own production of all antibiotics, and in 1956, 24 percent. Yet, the total quantity of tetracycline sold in 1956 is only slightly over 7 percent of the total quantity of all antibiotics sold during that year at the manufacturers' level. TABLE 12.-Manufacturers' sales of feed supplement grade antibiotics: 19561 1 Excluding sales of purchased antibiotics and products sold for other agricultural and industrial uses. 2 A small amount of penicillin benzathine is included in this item. SOURCE: FTC data request, 1957. In contrast to tetracycline, the penicillins represent about 33 percent of the total quantities of all antibiotics sold from the manufacturers' own production, but only 22 percent of the total value of all antibiotics at the manufacturers' level. It should be noted in this connection that procaine penicillin, which is produced and sold in quantities much larger than any other salt of penicillin, sells at relatively low prices for both medicinal and animal feed uses. Similarly, sodium and potassium penicillins, which are produced only for medicinal use, sell at relatively low prices, while some of the newer salts introduced during or since 1951 sell at higher prices. As a group, however, the showing of the charts is that the penicillins produce relatively low total revenue. Oxytetracycline accounted for about 12 percent of the total quantities and about 12 percent of the total value of all antibiotics sold at the manufacturers' level and from the manufacturers' own production in 1956. As shown in tables 11 and 12, more than three-fifths of its output is of feed supplement grade and the balance is for medicinal use. The proportion sold as feed supplements had an even more important effect upon the dollar value represented by chlortetracycline than it had upon oxytetracycline. In 1956, the total quantity of chlortetracycline was about 17 percent of the total quantity of all antibiotics sold at the manufacturers' level from the manufacturers' own production, and accounted for 11 percent of the total dollar value. However, only 15 percent of chlortetracycline was sold for medicinal purposes, while the balance of about 85 percent was sold for feed supplement and other agricultural uses. Despite the small volume of chlortetracycline of medicinal grade, the dollar value for medicinal sales accounted for more than 50 percent of the total sales of chlortetracycline. Thus, the larger volume of sales for nonmedicinal uses explains the low overall average dollar value per pound of chlortetracycline. Chloramphenicol has been manufactured only for medicinal purposes. Its dollar value in relation to quantity sold is relatively high as shown in chart 5. The relation of quantity of chloramphenicol to value is similar to that of tetracycline. Streptomycin and dihydrostreptomycin, which together are sold in larger quantities than other antibiotics except penicillin, represented relatively low dollar values in relation to quantity in striking contrast to all tetracyclines and chloramphenicol. Sales of streptomycin and dihydrostreptomycin from the manufacturers' own production for nonmedicinal uses have been very small and thus had little effect upon the overall dollar value per pound. The total quantities of all antibiotics sold from the manufacturers' own production, and the total dollar values of these quantities for each of the years from 1948 through 1956 are compared graphically in parts A and B of chart 6. The quantity of all antibiotics sales in 1956 increased about sixteenfold over 1948 (part A of chart 6). In terms of dollar value, a peak year occurred in 1951 during the Korean war (part B of chart 6). Following that year a decrease in dollar value of sales took place. Although volume increased substantially, the total dollar sales had not regained the 1951 level by 1956, as can be seen from chart 6. Thus, while quantity sold increased about 16 times, the manufacturers' revenue for this quantity only doubled during this period. See ch. VI of this report. Antibiotics Manufacturing Firms The antibiotics industry includes many of the oldest drug and chemical houses. Such names as Abbott; Lilly; Merck; Parke, Davis; Squibb; Upjohn; and Wyeth have long been well known. The Abbott name, for example, dates from 1888; Lilly was established 12 years earlier. The Merck name in the United States goes back to 1891; but in Darmstadt, Germany, it was first used in the drug business in 1668.5 Parke, Davis began in 1866; Squibb in 1858; Upjohn in 1884; and Wyeth in 1860. In addition to these old drug houses and some newer ones such as Bristol, Lederle, Penick, and Commercial Solvents, the antibiotics industry has included Pfizer, Monsanto, and Schenley Laboratories, predominantly manufacturers of industrial or fine chemicals. The last two (Monsanto and Schenley) have discontinued antibiotics production. Pfizer, producer of fine chemicals since 1849, and Commercial Solvents entered the ethical drug field after becoming manufacturers of antibiotics. The industry began during World War II with about 20 companies, and by the end of 1954 only 12 manufacturers remained. This number continued to form the antibiotics industry in 1956. All except one of the present manufacturers of antibiotics began to produce antibiotics during World War II period. Penick, which began the manufacture of antibiotics in 1949, is the exception. Several of the authorized World War II manufacturers discontinued antibiotics manufacture during the ensuing years. Some of them apparently never actually manufactured antibiotics substances on a commercial scale. The 1956 status of these companies, insofar as antibiotics operations are concerned, is shown in table 13. The nine companies which had dropped out of the manufacturing industry by 1954 were relatively small antibiotics producers, or, in some cases, they may not have produced antibiotics at all." The first production units used during World War II contained only flask-type equipment which was replaced by large fermentation vats by the large-scale producers toward the end, and following the war. The small producer or pilot plant operator could not compete with large-scale manufacturers. The following information relative to antibiotics market shares is based on responses to Federal Trade Commission data requests in 1956 and 1957. Among the surviving producers in 1956, approximately half of total antibiotics output was attributable to two companies. In 1955 Pfizer had led with about 35 percent of total volume Business Week, April 19, 1941, p. 36. Table 3, p. 54, lists the Government-authorized manufacturers for the World War II period. See first footnote to table 13. TABLE 13.—1956 status of World War II authorized manufacturers of 1 The above table lists 9 war-authorized producers which discontinued manufacture. Reichel production facilities were combined with American Home Products' Wyeth operations; Ben Venue Laboratories and Sterling Drug Co. ceased production at the close of World War II; available data do not indicate that Cherokee Biological Laboratories, Wm. Merrell & Co., and Emerson & Dettleback ever produced on a laboratory or commercial scale; Cutter Laboratories last manufactured in 1953 (when production was only 6,385 pounds); Hoffmann-La Roche last manufactured in 1949 (when total output was only 89 pounds); and Schenley last produced in 1952 (when total production was 25,426 pounds). J. T. Baker Chemical Co (consolidated by Vick Chemical Co. after 1941) and Monsanto, not shown on Table 13, entered the antibiotics industry after World War II and dropped out in 1953 and 1954, respectively. Both were relatively minor producers. 2 Purchase by Bristol occurred during World War II. Source: Civilian Production Administration, Industrial Statistics Division, War Industrial Facilities Authorized July 1940 through August 1945, Washington, July 30, 1946. FTC data request, 1957. produced, and American Cyanamid (Lederle) produced an additional 20 percent of the total. In 1956 Pfizer produced 26.0 percent of the total volume and American Cyanamid 23.1 percent of the total. Among producers of penicillin, four companies accounted for nearly 80 percent of national output in 1955 and 82 percent in 1956. In 1955, Pfizer produced nearly 30 percent of the total; Merck, almost 20 percent; Olin Mathieson (Squibb), 17 percent; and Lilly about 13 percent. In 1956, Olin Mathieson produced 24.5 percent; Merck, 20 percent; Lilly, 19 percent; and Pfizer, 18.6 percent amounting to 82 percent of total penicillin production. The antibiotics manufacturers, most of which operate within the ethical drug industry, maintain a close relationship with the medical profession and with retail pharmacists. Such changes in ownership as have occurred have not apparently disturbed this relationship. For example, Olin Mathieson which purchased Squibb in 1952 retained the Squibb name in the drug industry; Lederle continued to retain its trade-name identity after its purchase by American Cyanamid in 1931, as did Wyeth, purchased by American Home Products in 1931. The 12 manufacturers of antibiotics which have remained in the industry since 1954 are Abbott Laboratories American Cyanamid Co. (Lederle Laboratories) Bristol-Myers Co. Commercial Solvents Corp. 471425-58- -7 |