The top pharmaceutical companies of 2012 that focus on human prescription drugs, with some diversification, depending on
the company, in consumer-healthcare and animal-health products, are different from leading companies of the 1990s (see Tables
I–III). In 1990, several top players were not stand-alone drug companies but instead were the pharmaceutical units of multinational
chemical companies, reflecting the historical marriage between the chemical and pharmaceutical industries. As the strategic
value of pharmaceuticals as a business grew, so did merger and acquisition (M&A) activity, and with it, divestments of chemical
and agrochemical concerns and M&A of pharmaceutical businesses that would eventually create the pharmaceutical powerhouses
of today. Today, the industry is again at another crossroad as it contends with generic-drug incursion and reduced R&D productivity,
thereby facing challenges by which the top companies have responded by increasing biologic-based drug development, targeting
growth in emerging markets, and beginning to apply diagnostics in drug development.
The 1990s and early 2000s
More than two decades ago in 1990, Merck & Co. was ranked as the number one company in prescription drug sales, followed by
Bristol-Myers Squibb, which had moved into the number two spot with the 1989 merger of Bristol-Myers and Squibb (see Table
I). Glaxo was ranked third and SmithKline Beecham fourth, following the merger in 1989 of Philadelphia-based SmithKline Beckman
with the UK-based Beecham Group. In 1995, Glaxo and Burroughs Wellcome merged to form GlaxoWellcome, and in 2000, GlaxoSmithKline
was established through the merger of GlaxoWellcome and SmithKline Beecham (see Tables I, II).
Table I: Top global pharmaceutical companies, 1990
Other leading pharmaceutical companies in 1990 were not stand-alone entities, but instead were the pharmaceutical businesses
of multinational chemical companies: Ciba-Geigy (Swiss), Hoechst (German), Sandoz (German), and Rhône Poulenc (French). The
spinoffs of the pharmaceutical units from these chemcal companies and subsequent M&A resulted in the creation of larger, pharmaceutical-based
In 1995, the German chemical conglomerate Hoechst acquired Marion Merrell Dow of Kansas City, Missouri , a pharmaceutical
concern created from the 1989 merger of Marion Laboratories and Merrell Dow Pharmaceuticals. In 1989, Dow Chemical had acquired
a controlling interest in Marion Laboratories, which was renamed Marion Merrell Dow. In 1999, the pharmaceutical unit of Hoechst,
Hoechst Marion Roussel, merged with Rhône-Poulenc (which had spun off its chemicals division in 1997 into a separate company,
Rhodia) to create a separate pharmaceutical company, Aventis, which was later acquired by Sanofi–Synthélabo in 2004 to create
Sanofi-Aventis. Sanofi–Synthélabo had been formed in 1999 by the merger on Sanofi and Synthélabo.
In 1996, Novartis was established from the merger of the pharmaceutical businesses of Ciba-Geigy and Sandoz following the
respective spinoffs of the specialty chemical businesses of Ciba-Geigy to form Ciba-Geigy Specialty Chemicals and of Sandoz
to form Clariant, which later acquired the specialty chemical business of Hoechst in 1997. In 2000, Novartis divested its
agrochemical business and combined it with the divested agrochemical business of AstraZeneca to form Syngenta, thereby focusing
Novartis and AstraZeneca in pharmaceuticals. AstraZeneca was created from the 1999 merger of Astra AB of Sweden and the Zeneca
Group of the UK. Zeneca was formed from the demerger of three businesses (pharmaceuticals, agrochemicals, and specialty chemicals)
of the UK chemical company ICI beginning in 1993.
American Home Products, which included its pharmaceutical business, then called Wyeth-Ayerst, merged in 1994 with the conglomerate
American Cyanamid, which was diversified in consumer and industrial products, pharmaceuticals, agrochemicals, and industrial
chemicals. Seeking to build its life-science activities, American Home Products was subsequently involved in three unsuccessful
deals in the late 1990s: a merger with SmithKlineBeecham in 1998; a merger with Monsanto in 1999; and perhaps its most notable,
a failed 2000 bid for Warner-Lambert, which was later acquired by Pfizer. In 2002, American Home Products changed its name
to Wyeth, after spinning off unrelated businesses to focus on its pharmaceutical and consumer-healthcare businesses.