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Why did large pharmaceutical companies emerge in the late 19th and early 20th centuries?

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A lab technician wearing protective gloves and face shield lifts a rack of deep-frozen cells from a cryopreservation tank emitting vapor in a laboratory setting. — pharmaceutical industry A technician withdrawing deep-frozen cells for in vitro culture at a laboratory of a German pharmaceutical company.

The emergence of large pharmaceutical companies in the late 19th and early 20th centuries was driven by significant scientific, technical, and educational shifts. Prior to this period, the production of medications often relied on individual pharmacists; however, rapid advancements in chemical synthesis and separation techniques made it impossible for single practitioners to possess the necessary skills and resources to create modern, chemically pure drugs.1

As medical and pharmacy schools began establishing formal science departments, they shifted away from traditional apprenticeship models toward research-based education. This created a demand for university-trained scientists capable of navigating complex new technologies. Consequently, large companies emerged to employ these experts, centralizing the manufacturing and development processes.1

This transition was further supported by the growing appreciation for medicine and research among the public and government, which fostered a symbiotic relationship between private industry and public institutions. These companies eventually adopted innovations like "straight-line production" to increase efficiency, reduce errors, and meet the rising demand for standardized, life-saving treatments.12