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American Home Products A Pharmaceutical Empire


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History of American Home Products American Home Products Corporation (AHP) was
founded in 1926 and has a history of continuous acquisitions of smaller companies that
made proprietary medicines. In 1931, AHP purchased John Wyeth & Brother, Inc. from
Harvard University. Another important acquisition was that of Canada’s Ayerst
Laboratories in 1943. Ayerst was a large pharmaceutical company that had introduced
Premarin, the world’s first conjugated estrogen product, and now the most widely
prescribed product in the United States ( In March of 1982, Sherwood Medical
was acquired, enabling AHP to capture a share of the developing medical devices market.
In 1984, Whitehall, an original member of AHP, started to market ibuprofen in the United
States that was sold under the trademark Advil. Lawyer John Stafford became CEO in
1986 and soon after he supervised the acquisition of Bristol-Meyers animal health
division and assimilated the new business into Fort Dodge, now Fort Dodge Animal
Health. In 1989, AHP bought A.H. Robins along with its popular consumer products,
including Chap Stick, Dimetapp, and Robitussin. AHP and American Cyanamid merged
in 1994 in a deal valued at $9.6 billion. AHP introduced many new products in 1996,
including Redux and Pondimin (Phen-Phen), two weight-reduction drugs. These drugs
were later pulled from the market because of links to serious health problems and
lawsuits soon followed. When 1998 mega-merger plans with SmithKline Beecham and
Monsanto collapsed, AHP settled for the acquisition of New Jersey based Solgar Vitamin
and Herb Company for $425 million. It’s clear to see that AHP’s history is comprised of
acquisitions in the desire to be the ultimate leader of the pharmaceutical industry.
Marketing American Home Products has a suprisingly vast array of products. From
women’s health care products to agricultural goods to animal health care products, AHP
covers a variety of pharmaceutical needs. Wyeth-Ayersts research, products, and
educational initiatives benefit millions of women. Premarin, the most widely prescribed
medication in the United States, is a post-menopausal product that gained AHP notoriety
when it was introduced in 1996. Wyeth-Ayerst also introduced Alesse in 1997, a low-dose
oral contraceptive formulation that has become very popular in the birth control field.
Wyeth-Ayerst also focused its research on cardiovascular therapies and mental health
products. Its cardiovascular research concentrates on medication for diseases such as
arrhythmia and hypertension. Their anti-arrhythmia franchise leads the U.S. market,
reflecting Wyeth-Ayerst’s and AHP’s recognition of life-threatening ventricular
arrhythmia (Tardiff 114). Mental health products offered by Wyeth-Ayerst include anti-
anxiety medications and the fast growing anti-depressant, Effexor, introduced in 1997.
AHP’s family of companies also produces vaccines, cancer treatments, and pain and
inflammation medications. Their vaccines prevent childhood and adult diseases such as
whooping cough, diphtheria, poliomyelitis, meningitis, pneumonia, and influenza.
Orimune, the only oral polio vaccine sold in the United States, is a familiar product of
Wyeth-Ayerst. AHP is also known for their anti-cancer agents used by oncologists
throughout the world. AHP’s oncology and hematology franchises were strengthened in
1997 by the introduction of two new products; Neumega, the first approved platelet
growth factor, and BeneFix, the only recombinant clotting factor treatment for
Hemophilia B. Wyeth-Ayerst also holds a solid position in the pain and inflammatory
category. With the introduction of Duract and Synvisc in 1997, AHP gained notable

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recognition in the pain reduction medication area. AHP’s range of products doesn’t stop
there. They also produce items in areas such as anti-invectives, nutritionals, consumer
health care, agricultural products, and animal health care. Their antibiotic products are
used globally to treat infectious diseases. The Wyeth-Ayerst nutritional product line is
among the leaders in the international marketplace. Probably the most well known AHP
products come from their consumer health care line. This line markets leading brands
such as Advil, Centrum, Dimetapp, and Robitussin. Cyanamid, another member of the
AHP family, is a leader in the global agricultural products marketplace with products like
herbicides, insecticides, and fungicides. An additional member of the AHP family, Fort
Dodge, has become the world’s third largest provider of animal health care products.
Management/Human Resources American Home Products Corporation has a relatively
large team of managers. AHP employs more than 52,000 citizens, a substantial decrease
from 1994’s statistic of 74,000. AHP’s principal corporate officers consist of twenty-two
vice-principals, one treasurer, and one secretary. AHP’s management team also consists
of 12 subsidiary officers from AHP’s principal divisions; Cyanamid, Wyeth-Ayerst,
Whitehall-Robins, Immunex, Specialty Pharmaceuticals, and Quinton Instrument
Company. Another segment of AHP’s management team is composed of an executive
committee, an audit committee, a compensation and benefits committee, a corporate
issues committee, and a nominating committee. AHP’s management structure is
hierarchical in style, using the “top-down” approach to management. Though, AHP may
seem domineering in management style, they are more than generous when it comes to
benefits. American Home Products sponsors various retirement plans for most full-time
employees. Total pension expense for 1998, 1997, and 1996 was $112,209,000,
$146,403,000, and $120,621,000, respectively. AHP also supports defined benefit and
defined contribution plans for most domestic and certain foreign locations. Benefits under
the defined benefit plan are based primarily on participants’ compensation and years of
credited service. On the other hand, defined contribution plans are based on a percentage
of employees’ compensation. Expenses for defined contribution plans totaled
$64,006,000 in 1998, $65,645,000 in 1997, and $66,674,000 in 1996. AHP’s benefits
don’t stop there. They also sponsor postretirement healthcare and life insurance benefits
for retired employees of most domestic locations and Canada. Most full-time employees
become eligible for these benefits after attaining specified age and service requirements.
American Home Products has not gone unnoticed in their loyalty to employees. AHP was
recently selected as one of Working Mother magazine’s “100 Best Companies for
Working Mothers.” The October, 1999 issue states that AHP excels at all six of the
criteria used to grade the 100 companies: leave for new parents, flexible work
arrangements, child care, work/life balance such as counseling and support groups for
employees, opportunities for women to advance, and pay. John R. Stafford, President,
Chairman, and CEO states, “We are pleased to be named as one of the best companies for
working mothers for the second year. Our work/life programs and policies help ensure
that the Company is acting as a partner in assisting employees with balancing work and
family responsibilities. One initiative we are particularly proud of is AHP’s dependent
care subsidy as a matching contribution to an employees Dependent Care Spending
Account. This benefit provides financial support to meet the dependent care needs of our
employees and their families.” In addition to offering employees dependent financial
assistance, AHP offers adoption assistance benefits and an Employee Assistance Program

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