The Upjohn Company
7000 Portage Road
Fax: (616) 323-6654
Stock Exchanges: New York
Upjohn is one of the largest ethical drug
manufacturers in the United States. Recognized as a world
leader in developing medicines for the treatment of central
nervous system diseases, disorders, and injuries, the
company also manufactures an extensive line of prescription
drugs used in the treatment of conditions including heart
disease, cancer, and arthritis. In the last decades of the
twentieth century, the company expanded into animal
pharmaceuticals and vegetable and agronomic seeds. The
company has research, manufacturing, sales, and distribution
facilities in more than 200 locations worldwide.
Upjohn's Victorian beginnings coincided with the origin of
modern pharmaceuticals. In the nineteenth century,
physicians who wanted to prescribe medication for their
patients were limited to two unsatisfactory choices: fluid
extracts of unstable and varying potency, or drugs in pill
form. Although pills were of relatively standard potency,
they were so hard that they could be hammered into a board
without doing damage to their coating (as one of Upjohn's
early advertising gimmicks showed); often such pills did not
dissolve in the stomach and were passed by the patient. In
1885 Dr. William Upjohn solved these problems and
revolutionized the drug industry when he patented a tedious
process for the making of a "friable" pill capable of
crumbling under the pressure of an individual's thumb.
The image of Dr. Upjohn's thumb crushing a pill eventually
became a trademark of the Upjohn Pill and Granule Co.,
founded in Kalamazoo in 1886 by Upjohn and his brother
Henry. A talent for promoting its products ensured the
company's steady growth through the turn of the century. By
1893 Upjohn could be seen at the Chicago World's Fair
distributing souvenirs of its exhibit--an enormous bottle
filled with colored pills. In 1903 the company shortened its
name to The Upjohn Company. Quinine pills and "Phenolax
Wafers" (the first candy laxative) were two of the early and
successful products made by Upjohn. By 1924 the extremely
popular wafers were bringing in $795,000 a year, or 21
percent of Upjohn's sales revenue.
From the very beginning Upjohn emphasized research and
development. In 1913 the company hired its first research
scientist, Dr. Frederick W. Heyl. Dr. Heyl proved to be a
sound investment for Upjohn. One of his developments,
Citro-carbonate, an effervescent antacid, reached sales of
$1 million in 1926. Heyl was also responsible for patenting
a digitalis tablet called Digitora, which is used in the
treatment of heart disease, and which is still sold by
William Upjohn, who was largely responsible for the firm's
early research orientation as well as its entrepreneurial
spirit, was an extraordinary man whose interests extended
well beyond the bottom line of his company's profit sheet.
An avid gardener, he grew 1,000 varieties of peonies (and
even wrote a book on them) in addition to the medicinal
herbs and flowers he cultivated at his country home in
Augusta, Michigan. His interest in horticulture led him to
donate a 17-acre park to the city of Kalamazoo and to
shorten the workday at Upjohn to seven hours during the
summer in order to enable employees to go home and water
Dr. Upjohn was also dedicated to improving working
conditions for his employees. In 1911 he initiated a soup
lunch program; in 1915 he instituted a group life insurance
and benefit program. At the time of his death he was working
on the development of his farm properties in an attempt to
create a type of employment insurance for the people of
Kalamazoo, most of whom worked for the Upjohn Company. He
served as Kalamazoo's first mayor under a commission-city
manager style of government, which he had played a critical
role in establishing.
The Upjohn Company's attachment to Kalamazoo has been
strengthened by the fact that the company has remained
largely a family affair. When William Upjohn, eulogized as
"Kalamazoo's First Citizen," died in 1932, the job of
running the company fell to his nephew, Dr. Lawrence N.
Upjohn. In 1944 Lawrence Upjohn retired and Donald S.
Gilmore became president. Gilmore, whose family owned
Gilmore Brothers', a huge midwestern department store, was
both the step-son and the son-in-law of William Upjohn. Ray
T. Parfet, who was president of the company from 1961 until
the late 1980s, also married into the family. The company
has been so tightly held that until 1968 no one who was not
a family member or employee of Upjohn was permitted to sit
on its board of directors.
During the 1930s and 1940s, under the guidance of Lawrence
Upjohn and later under Gilmore, the company expanded its
research and manufacturing facilities and added twelve more
research scientists. This expansion paid off when Upjohn
became the first to market an adreno-cortical hormone
product in 1935. During World War II Upjohn, like many other
drug companies, developed a broad line of antibiotics,
including penicillin and streptomycin. Upjohn was fortunate
enough to be selected by the armed forces to process human
serum albumin and penicillin. By 1958 Upjohn was the sixth
largest manufacturer of antibiotics, with antibiotic sales
of $22.6 million. Two important drugs in the antibiotic
field that are produced by the company today are Lincocin,
an antibiotic useful for patients who are allergic to
certain other antibiotics, and Cleocin Phosphate, an
injectable form of clindamycin used in the treatment of
life-threatening anaerobic infections. The company also
markets tetracycline, erythromycin, and erythromycin
ethylsuccinate, under the names Panmycin, E-Mycin, and
E-Mycin E. Another antibiotic produced by Upjohn, Trobicin,
has proven useful as an alternative to penicillin in the
treatment of gonorrhea.
In addition to antibiotics, Upjohn also developed a product
called Gelfoam during the period of World War II. A
substance made from beef bone gelatin, Gelfoam is a porous,
sponge-like material which, when used during surgery,
absorbs many times its volume in fluid and is itself
absorbed by body tissues. Besides being valuable in surgery,
Gelfoam is also useful in the treatment of hemophilia.
Manufactured in a powder form that can be swallowed, Gelfoam
is used to stop hemorrhaging that occurs in the digestive
In 1957 the Upjohn Company introduced the first oral
anti-diabetes agent, called Orinase. Many physicians and
patients considered Orinase to be the greatest advancement
in the treatment of adult-onset diabetes since insulin.
Studies conducted in the 1970s, however, linked the drug
with heart disease, and its use was subsequently discouraged
by the National Institute of Health. Upjohn produced a line
of oral anti-diabetes agents that included Tolinase and the
more potent Micronase. In 1992 the company brought out a
reformulated version of Micronase called Glynase PresTab.
The oral treatment featured a patented design that patients
could easily snap in two for a more precise dosage.
During the 1950s Upjohn expanded internationally, allowing
it to compete with other large drug manufacturers in foreign
markets and fostering further advances in research. In 1949
and 1950, Upjohn joined S. B. Penick & Co. on an expedition
to Africa in search of a plant that could provide a less
expensive source of cortisone than that used by Merck, who
had introduced the drug. While this venture was
unsuccessful, the company discovered by accident a type of
mold that was capable of fermenting progesterone, the basic
building block for cortisone, out of diosgenin. Upjohn was
able to capitalize on its discovery by forming a partnership
with a Mexican firm, Syntex, who isolated diosgenin from
yams. A number of new hormones now available, including the
injectable contraceptive Depo-Provera, were made possible by
Upjohn's international initiatives.
Depo-Provera, which provides protection against pregnancy
for about 90 days, has been marketed in over 80 foreign
countries through subsidiaries around the world.
Depo-Provera was also approved for the treatment of advanced
uterine cancer, and a 1975 study revealed that doctors had
prescribed the drug as a contraceptive for some 10,000 women
in that year alone. Upjohn encountered difficulty in
obtaining FDA approval for the sale of Depo-Provera as a
contraceptive in the United States, largely because studies
linked it to serious side effects, including cancer.
Depo-Provera Contraceptive Injection was finally approved
for contraceptive use by the USFDA in 1992.
During the 1980s Upjohn continued to expand internationally,
forming a new Japanese subsidiary in 1985 while selling its
worldwide polymer chemical business to Dow Chemical Co. for
$232 million. In 1985 foreign markets accounted for 30
percent of Upjohn's total sales. By the early 1990s, that
figure had reached $1.27 billion, or over 33 percent of
The 1980s also witnessed a major challenge in the market for
its most lucrative drug, Motrin, which as of 1984 accounted
for 40 percent of its earnings. Motrin, an anti-inflammatory
agent widely prescribed in the treatment of arthritis and
menstrual cramps, was introduced into the United States in
1974 when Boots Pharmaceutical Co. of Britain licensed
Upjohn to sell ibuprofen (Motrin's active ingredient). In
1977, however, Boots entered the U.S. market itself, even
while continuing to license Upjohn, and in 1981 began a
price war by selling the drug at 20 to 30 percent less than
Upjohn. By 1984 the companies had extended their battle by
producing over-the-counter ibuprofen pills Nuprin and Advil.
As a result of this competition, Upjohn's dominant market
position eroded: by mid-1984 Boots had gained 25 percent of
the market share of prescriptions for ibuprofen.
Despite these setbacks, Upjohn's financial situation during
the 1980s was good, with retained earnings and dividends
increasing steadily between 1979 and 1985. An important
factor in Upjohn's prosperity was the success of its
anti-anxiety agent, Xanax, whose sales increased 85 percent
in 1985 from $82.2 million to $152.4 million. The drug had
brought in over $400 million by the end of the decade, when
its sales peaked. Sales revived somewhat in the early 1990s,
when the FDA approved Xanax's use in the treatment of panic
Minoxidil, or Rogaine (as the drug was eventually branded)
brought Upjohn much publicity in the late 1980s and early
1990s. Discovered in the mid-1960s and originally intended
for the treatment of heart disease, Rogaine was found to
produce unwanted hair growth in patients for whom it was
prescribed. Upjohn began clinical testing for the drug's
effectiveness against baldness in 1977. Although huge demand
for this treatment was demonstrated even before its
approval, Rogaine did not register the high sales that
company executives and industry analysts predicted. When the
product was introduced in 1986 patients discovered that
Rogaine worked best for men whose hair was just beginning to
thin. Even the successful cases, about 10 to 20 percent of
the total, faced a life of two-a-day applications. In 1989,
after three years of disappointing sales, Upjohn began to
sidestep traditional pharmaceutical marketing strategies and
go directly to the consumer with an information campaign.
That year, the company became one of the world's top three
pharmaceutical advertisers, primarily on the $50 million
The direct campaign brought success for Rogaine (sales
increased by more than one-third from 1989 to 1990), but
criticism from the FDA, which disapproved of Upjohn's
promotional leapfrog over physicians. In 1990 Upjohn began
to market a non-prescription-strength version through
barbers and hairstylists, and raised ad spending by 17.5
percent. And in 1991 the company began to invite inquiries
directly from prospective clients, who would then be
referred to a dermatologist or other specialist.
Upjohn's problems with Rogaine were exacerbated by a spate
of adverse publicity surrounding the sleep-inducing agent
Halcion. The drug was linked in the media and over 100
lawsuits to memory lapses and addiction, and its
registration was suspended in 13 countries. Upjohn defended
the drug, which was reinstated in two countries by 1992, and
the FDA concluded that the drug was safe and effective when
used within the context of its labeling. Unfortunately, the
drug was scheduled to lose its United States patent in
The patent for Micronase also expired in 1992, and three
other major Upjohn products were scheduled to lose patent
protection in 1993 and 1994, including Xanax and Cleocin, a
cholesterol-reducing drug. In order to maintain a measure of
the sales that Upjohn expected to lose to generic
competitors, the company signed agreements with Geneva
Pharmaceuticals, Inc., for the smaller company to market
generic versions of the drugs.
Upjohn also worked to speed up its research and development
process in the 1990s in order to replace the products it
would lose to the generic market. The company received FDA
approval of eight New Drug Applications in 1992, and its
promising new drug Freedox entered Phase III trials in the
United States, Canada, Europe, Australia, and Israel. The
drug was among a group of steroids called lazaroids
indicated for the treatment of head and spinal cord
injuries. Upjohn had an Acquired Immune Deficiency Syndrome
(AIDS) treatment in the works at that time as well. The
company also tried to increase its presence in
over-the-counter medicines with the introduction of Maximum
Strength Cortaid, on the heels of FDA approval of 1 percent
strength hydrocortisones for non-prescription sale. The
approval was expected to increase the hydrocortisone
business by at least one-fourth.
In the face of an outcry by the public and the U.S. Congress
against large increases in drug prices and record-setting
profits for drug companies, Upjohn guaranteed in 1992 to
freeze the price of its blood pressure drug, Altace, until
the turn of the twenty-first century. The company also
voluntarily offered a flat rebate to Medicaid programs.
Consolidation in the ethical pharmaceutical industry in the
1990s brought speculation that Upjohn was too small to
compete with its larger rivals. But Upjohn responded to the
challenges of the changing global market with sizeable
investments in facilities, the divestment of peripheral
interests and unprofitable assets, and a small-scale
Upjohn Inter-American Corp.; Asgrow International Corp.;
Asgrow Seed Company; California Health Care Services Inc.;
Homemakers Licensing Corp.; Cobb, Incorporated; Centennial
Collection Corp.; Asgrow Florida Co.; O's Gold Seed Co.
Upjohn also has subsidiaries in the following countries:
Argentina, Australia, Brazil, Belgium, Canada, Chile,
Columbia, England, France, Greece, Guatemala, Indonesia,
Italy, Japan, Korea, Mexico, Netherlands Antilles, Panama,
Philippines, Portugal, South Africa, Spain, Sweden, Taiwan,
Thailand, Venezuela, and West Germany.
Begley, Ronald, "Pricing Pressure from Congress,"
Chemical Week, v. 151, August 12, 1992, 26-28.
Benoit, Ellen, "Upjohn: Rip Tide," Financial World,
v. 158, September 5, 1989, 26-28.
Eaton, Leslie, "The Bald Truth: There's More to Upjohn Than
Just Rogaine," Barron's, v. 69, January 16, 1989, 13,
Hoke, Henry R., "Upjohn's Database Fuels Sales Growth,"
Direct Marketing, v. 54, April 1992, 28-30.
"Pharmacy--A Sharp Decline in Ad Pages," Medical
Marketing & Media, v. 24, September 20, 1989.
Quickel, Stephen W., "Bald Spot: Upjohn's Hair-Raising
Experience with Minoxidil," Business Month, v. 134,
November 1989, 36-43.
Rosendahl, Iris, "First Aid Is a First-Rate Category in
Drugstores," Drug Topics, v. 134, August 20, 1990,
----, "Topical Hydrocortisones Get 1% Lift from FDA;
Promoting First Aid: Cash in on Health-Care Image," Drug
Topics, v. 136, February 17, 1992, 68-69.
Woodruff, David, "For Rogaine, No Miracle Cure--Yet,"
Business Week, June 4, 1990, 100.
International Directory of Company Histories,
Vol. 8. St. James Press, 1994.