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An industry that had a cure

National pharmaceutical sector was born strong and had State support

It was a strong “child” and had everything in its favor to grow into a fine Brazilian. However, something happened and it left at whims of its foreign colleagues. In order to understand this change, one needs to know its history. And this is what professor Maria Alice Rosa Ribeiro proposed in the State and Pharmaceutical Industry: Science, Technology and the Pharmaceutical Industry in Brazil 1890-1950, research about the birth of the national pharmaceutical industry that brings with it little known data about the primordial years of one of the economy’s sectors that has considerable influence on the day to day life of Brazilians. For example, the study reveals the existence of successful companies right from the first moment of their formation, such as the Pinheiros Institute and the Paulista Biology Laboratory. “The companies, established with national capital, were capable of developing research and of producing products following rigorous criteria of quality”, says the researcher.

The study also shows the participation of the State (that gave incentive and provided resources for some of the first pharmaceutical laboratories) in the implantation of this sector was fundamental for the creation of a critical mass of Brazilian scientists. The work of these men – taking into account the growing urbanization that occurred starting at the end of the 19th century and its implications – is associated both with the development of public health plans and with laboratory work, and finally in the production of serums, vaccines, and medicines carried out by pioneering companies in a country that would make a late entry into the capitalist system.

Working with the support of FAPESP, from whom she received R$ 8,000 as a research assistant grant, Maria Alice realized that this industry (that strengthened itself at the beginning of this century) brought together the necessary resources for the execution of its work – such as good installations, adequate equipment and trained professionals – as well the conditions that would lead to the growth of this sector on a national level,. This did not happen due to the direction changes dictated by measures and economic plans – such as the Plan of Goals of President Juscelino Kubitchek – that would open the doors to foreign capital, stimulating the implantation of industries coming from other countries and with which the national industry simply could not compete. For  Maria Alice, who is a professor at the Economy Department of the Sciences and Arts College of Araraquara, of the São Paulo State University (Unesp), “the history of this industry in Brazil has a strong relationship with the public health institutions, with the  prevention sanitary practices and combating infectious diseases, and especially, with the basic and applied research institutions, created with the organization of the Sanitary Health Service of São Paulo, as well as with the Biological Institute – responsible to the sanitary defense of farming – linked  to the Secretary of Agriculture of the State of São Paulo”.

By pointing to the building of the relations network between public institutions created in the ambit of public health and the formation of a national pharmaceutical industry, the economist highlights the Instituto Pinheiros – Produtos Terapêuticos S.A. ( Institute Pinheiros –  Therapeutic Product ). [IP], created in 1928. A private company of national capital was founded by medical doctors trained by scientists linked to the Butantan Institute of São Paulo. The IP, which established interchanges and contracts with scientists linked to public research institutions, earned national projection and turned itself into the largest producer of antitoxins and vaccines (responsible for 80% of the national demand), that was able to compete with Manguinhos Institute and the Butantan Institute itself.

Another company highlighted and also studied by her is the Laboratório Paulista de Biologia (Paulista Biology Laboratory (LPB)), founded in 1912 by ex-employees of the Pasteur Institute, whose ascension was rapid exactly because it had professionals of renowned competence. In the founding of the LPB, the main name was the medical doctor Ulisses Paranhos who, along with two technicians of excellent level – Valentim Giolito and Rodolfo Pasqualin – was capable of giving a kick start to an ambitious project that covered various products, among them anti-diphtherial serums, and anti-typhoid, anti-gangrenous serums, and anti-tetanus serums, and afterwards, a broad range of medicines, immunizers, serums and vaccines as well as therapeutic organic extracts.

Public health
The researcher made a crossover between social history (public health, therapeutic practices, formation of an elite scientific group) and economic history (formation of private pharmaceutical industry, entrepreneurs and technicians origin and of scientific and technological developments). To accomplish this, it was necessary to go back in time to the period before 1892, when the Sanitation Service of São Paulo began to be structured. Those days, the sanitary measures were incidental, always with a view to combating epidemics that would break out in ports such as Recife, Salvador and Santos, as well as Rio de Janeiro, especially since it was where the Imperial capital and afterwards the Republican capital was sited.

What changed this reality was the expansion of coffee planting to the west of the state of São Paulo, creating new necessities, which triggered off an effort that would include research institutions and an public health policy definition. The combating of infectious diseases included at that time isolation, vaccination and disinfecting. For this, the General Disinfection Service would use large volumes of chemical substances for cleaning the ports, slums, immigrant hostels, and in general urban spaces deteriorated with cheaper housing and poor householders. A variety of chemicals were in use (among them copper sulfate, calcium chloride, sulfuric acid, cresol, potassium permanganate, etc.), imported in large quantities from Germany, England and the United States.

Brazilian industry
The small Brazilian industrial chemical park was related to natural resources – vegetables, minerals and animals. The first segment to be created here was for the production of vegetal anilines, oils and waxes, essential oils and native medicines. In the last decade of the 19th century, new discoveries – such as organic synthesis – made by foreign companies, led to a decrease in the Brazilian production of chemical goods based on vegetal matter.

The manufacture of mineral derived products, since they depended on a more complex technology and on imported raw materials (sulfur, nitrates, chlorine, etc.), began much later. It is true that the commercial acids (sulfuric, hydrochloric and nitric acids) began to be manufactured in 1895 by Luiz de Queiroz & Cia (and later by Elekeiroz S.A.), but the company always had to depend on importation. With the coming of the First World War, which made scarce the importation of caustic soda, it was necessary to begin manufacturing the product, which was done through the Companhia Brasileira de Produtos Químicos (Brazilian Company of Chemical Products), of  Rio, beginning in 1921.

Microbes and vaccines
The change in relation to the public health measures and disinfecting, occurred at the end of the 20s, due to the advances in the field of epidemiology. Scientists discovered that the transmission channels of illnesses were more complex than they had believed up until then. Maria Alice quotes (according to the book Manguinhos do Sonho à Vida -Manguinhos from dream to life, by Jaime Benchimol): “The new understanding about the behavior of pathogenic microbes reduced the importance of outdated notions of Pasteurian bacteriology on the danger of the air and the contagion of diseases (…) a new architectonic conception substituted the logic of hospital organization (…) through the construction of pavilion hospitals ….” For example, the present idea in the Isolation Hospital of São Paulo (Emílio Ribas), where each pavilion was specific for a particular illness  – yellow fever, typhoid, scarlet fever, etc.

The Vaccinogenic Institute (of 1802) and the Butantan Institute (created in 1899, as a result of an epidemic of the Black Death in the city of Santos) were the first institutions given the responsibility of manufacturing biological products in São Paulo. The first was directed to the production of a vaccine against smallpox, and the second to a serum against the Black Death, and later, the vaccines and serums to counteract bites from snakes, spiders and scorpions.

“A peculiarity was that the public research institutes belonging to the Sanitary Service were created as independent institutions, even before the installation of medical teaching.  In the case of São Paulo, the Butantan Institute, the Bacteriology Institute (in 1892) and the Biology Institute (in 1927, this one linked to the sanitary defense of agriculture and cattle raising) were responsible for the spreading of knowledge about microbiology and for the revolution in the field of Medicine”, explains Maria Alice.

Vital Brazil is one of the most famous names in public health. He, who in 1901 had produced the first doses of anti-ophidian serum, discovered the properties of serum – or better, that for each type of snake there was a specific serum to neutralize its venom. “During the 20s, at the same time as the BCG vaccine appeared, the Butantan began to produce on a large scale a vaccine against typhoid fever. In the next decade, besides rationalizing the organization in the production of anti smallpox vaccines, the Butantan Institute passed through a serious institutional crisis. That situation extended into the middle of the 50s, and in 1948 the government limited its practice to the preparation of products for sanitary defense and to research into poisonous animals”, reveals the researcher.

Studies by researchers such as Jaime Larry Benchimol and Luiz Antonio Teixeira state that the national production of medicines increased after the First World War, with the researchers transfer from the public institutions to private companies. “Scientists at the public institutions, who had the know-how, began to take an interest in the establishing of companies or in the work being carried out by private initiative”, says the professor. “The know-how acquired by these professionals would be put to the service of market interests”, she completes. Vital Brazil himself, on leaving the Butantan Institute, due to a disagreement with Arthur Leiva’s direction, went to Niterói and set up the Vital Brazil Institute. And the very Paulista Laboratory itself was created by professionals who came from the institutes.

Research and production
The researcher turned to the studies of Wilson Roberto Gambeta, from 1982, to show the connections between research institutions and immunology production and the establishment of a capitalist production. “The Pasteur Institute, founded by medical doctors, members the  elite, merchants, bankers, and industrialists (and that counted on financial help from the State) contributed towards the development of the technology necessary for the manufacturing of scientifically based medicines; introduced bacterial pharmacology complementing the Galenic one and stimulated the spread of the industrialization of medicines”, explains the researcher.

In order to develop her work, Maria Alice referred to archives, statements from ex-employees and the families of the owners of past companies. She discovered that the Paulista Laboratory had a successful life. The company grew, diversified its production, expanded its installations (in 1919, it had two laboratories, an animal rearing farm, and a branch in Rio de Janeiro). Besides, it kept itself scientifically updated, hired new professionals, Brazilian and foreigners, and entered into the exporting segment. In 1936, with 147 employees, it inaugurated a new site on São Luís Avenue. Part of the success of its trajectory can be attributed, according to the analysis of Gambeta, to the “easiness” of the era. “Industrial secrets and the protectionism of patents were not then current practice, in such a manner that the advance of pharmacology was open to all through the library of public domain”, she explains.

In the opinion of the researcher, the growth of the company was constant, passing through World War II and on into the golden years of the 50s. “We can see in the 60s the first difficulties, when the large foreign companies took over the leadership in the market, and the government started to protect industrial patents, tax breaks were given to foreign investors, as well as the growing sophistication of the production processes of modern antibiotics.”

Hence, the LPB was exposed to competition much more provocative than in other sectors of the pharmaceutical market. “The degree of obsolescence of its line of products was immense, since innovation in the sector was quicker and quicker, then in 1966 it was bought over by the Pinheiros Institute”, tells Maria Alice. At that time the Pinheiros Institute was the largest national laboratory. A path was open, according to the information given out by the board of directors of the IP, “for keeping alive the national pharmaceutical industry through the formation of a pool of material and human resources.” Six years later, the IP did not resist the insistence and the competitiveness of the foreign companies and was sold to the North American company Sintex do Brasil. “That situation, plus the succession problem which can’t be downplayed”, as the economist points out, “led to the disappearance of various several companies in the sector.”

With the work still going on, Maria Alice is going to complement it with interviews and to find the most difficult thing. “The data relating to the administration, of the economic part of the companies, documents that for lack of tradition few of the families preserved”, adds the economist. Also, on her agenda is an investigation into the history of two other laboratories: the Torres Laboratory where the scientist Otto Bier worked, and the Laborterápica, which was bought over by Bristol de São Paulo.

• Professor Maria Alice Rosa Ribeiro, 48 years of age, is a graduate in Economic Science from the Economic Science School of UFRGS. She did her master’s degree in History at Unicamp, her doctorate in Economics from Unicamp, and followed up with her post-doctorate at London University (with research into Industry and the Labor Market  – São Paulo, 1914-1945) and was a resident at the Chemical Heritage Foundation, CHF, as a researcher into the formation and development of the pharmaceutical industry. Currently she is a professor at Unesp within the post graduation programs at the level of masters and doctorate.
Project: The State and the Pharmaceutical Industry: Science, Technology and the Pharmaceutical Industry in Brazil 1890-1950
Investment: R$ 8,056.00