ABSTRACT
During the past century, the sources of innovation in this industry have been decisively transformed. Scientific, economic, and political developments have interacted to reshape both the institutional and cultural setting. Expanding urban markets enabled some of the manufacturing pharmacies of the late nineteenth century to grow in scale and scope, gradually evolving into the specialized, integrated pharmaceutical manufacturing firms of the 1930s and 1940s. This institutional change coincided with a shift from research conducted outside the firm to the emergence of modern, corporate R&D organizations which sparked a newwave of innovations: the vitamins and sulfonamides in the 1930s and the steroids, antibiotics, and cardiovascular products in the 1940s and 1950s.
