Law on McTavish, _Pain and Profits: The History of the Headache and Its Remedies in America_

[eh.net-review at eh.net]

Published by EH.NET (May 2008)

Jan R. McTavish, _Pain and Profits: The History of the Headache and 
Its Remedies in America_. New Brunswick, NJ: Rutgers University 
Press, 2004. vii + 239 pp. $24 (paperback), ISBN: 0-8135-3441-0.

Reviewed for EH.NET by Marc Law, Department of Economics, University 
of Vermont.


Janice McTavish's _Pain and Profits_ is an entertaining and 
informative history of headache treatments in America from the early 
nineteenth century until the present day. In this extremely readable 
and well-researched book, McTavish, an assistant professor of history 
at Alcorn State University, explores how developments in the practice 
of medicine, the pharmaceutical industry, and government regulation 
influenced how headaches were treated and perceived by physicians and 
patients. McTavish bases her account on a wide range of sources 
including contemporary newspaper articles and drug advertisements, 
court cases, government records, professional and trade journals, as 
well as a vast array of secondary source materials. This book is 
highly recommended for historians of medicine, as well as for 
scholars interested in the complex interactions among pharmaceutical 
companies, the medical profession, and government policy. Also, 
readers who are familiar with the James Harvey Young's (1961, 1967) 
work on the history of the patent medicine industry will find this a 
welcome addition to the literature.

The structure of _Pain and Profits_ is roughly as follows. Chapter 1 
describes how headaches were understood and perceived by doctors and 
patients during the early nineteenth century and the various and 
often peculiar ways in which headaches were treated. During this 
time, physicians were generally unwilling to provide symptomatic 
relief to headaches. The prevailing view was that such treatment 
would frustrate efforts to cure the patient of the underlying 
condition that caused headaches. Accordingly, self-medication became 
the norm for patients seeking pain relief and the demand for headache 
remedies largely came directly from consumers. Chapter 2 discusses 
the supply side of the market for headache remedies. McTavish notes 
that the pharmaceutical trade was split into two (overlapping) camps: 
the so-called "ethical" drug trade, which sold products only with a 
physician's prescription, and the "nostrum" or "proprietary medicine" 
industry, which marketed its products directly to consumers. 
Snake-oil headache remedies were an important component of the patent 
medicine trade, in part because these products bypassed a medical 
profession that was generally reluctant to prescribe analgesics. In 
Chapter 3, McTavish details the uneasy relationship that existed 
between a reform-minded medical profession during the late nineteenth 
and early twentieth centuries that sought to control the public's 
direct access to pharmaceuticals and profit-seeking pharmaceutical 
companies. Chapter 4 discusses how technological innovations in the 
German pharmaceutical industry -- most notably, the development of 
increasingly effective "synthetic drugs" like salicylic acid and 
phenacetin -- gradually began to change the market for headache 
remedies and as well as the attitudes of physicians and patients 
towards headache treatment. This chapter also explores the roles that 
patents, trademarks, and litigation over intellectual property rights 
played in influencing the prescribing behavior of physicians and the 
pricing of pharmaceutical products. Chapter 5 returns to tensions 
between increasingly powerful professions (physicians and 
pharmacists) and drug companies and describes the relative 
ineffectiveness of professional self-regulation and government 
regulation (for instance, the Pure Food and Drugs Act of 1906) in 
limiting the over-the-counter availability of headache remedies. 
Chapters 6 and 7 tell the story of how aspirin, the first 
consistently effective and safe headache remedy, became available to 
American physicians and consumers. These chapters also describe the 
intellectual property disputes over aspirin; how, as a result of 
World War I, property rights over this miraculous product were 
transferred from Bayer (its German developer) to Sterling, an 
American nostrum manufacturer; and the role played by Sterling in 
creating a mass market for aspirin. Finally, Chapter 8 discusses the 
evolution of medical understanding of headaches and headache 
treatment in the second half of the twentieth century.

While this book is more a social history than an economic one, 
economists and economic historians will nevertheless find grist for 
their mills in this relatively slender volume. For instance, the book 
is rich in detail about how German pharmaceutical firms like Bayer 
and Hoechst attempted to use America's relatively generous patent 
laws to maintain their market power and prevent entry in the market 
for synthetic drugs; how this gave rise to differential pricing 
across national borders (Canada's intellectual property laws did not 
provide the same level of protection); and how this in turn created 
arbitrage opportunities for the smuggling of pharmaceuticals from 
Canada. Additionally, McTavish, through her analysis of the market 
for synthetic drugs, demonstrates the importance of brand names in 
drug marketing and how confusion over the proprietary and chemical 
names of pharmaceuticals limited the ability of drug manufacturers to 
exploit their market power.

An interesting issue that McTavish does not completely address, 
however, is why the snake oil headache remedies peddled by nostrum 
manufacturers during the nineteenth century were so popular with 
consumers, even though they had little, if any, therapeutic value. 
McTavish is partially correct in suggesting that consumers were 
simply desperate for pain relief and that something was better than 
nothing. However, the more fundamental reason for the popularity of 
these otherwise worthless remedies is that drugs are a "credence 
good" (a good whose quality is difficult to discern even after 
consumption), not an "experience good" (a good where quality can be 
determined after consumption). Because most headaches eventually go 
away, and because there is no way an individual consumer can know 
whether improvement in her condition is due to the consumption of a 
drug or simply the passage of time, improvement in her condition 
might easily be misattributed to the consumption of a proprietary 
nostrum, even if the nostrum has no therapeutic value. This problem 
is likely to be pervasive whenever there is asymmetric information 
over drugs that deal with self-remitting conditions (see Carpenter 
2005 for a theoretical discussion).

But this is a relatively minor omission from an otherwise excellent 
book. _Pain and Profits_ is a must read for anyone curious about the 
history of the headache and its treatment in America.

References:

Carpenter, Daniel P. (2005). "A Simple Model of Placebo Learning with 
Self-Remitting Diseases." Harvard University, mimeo.

Young, James Harvey (1961). _The Toadstool Millionaires: A Social 
History of Patent Medicines in America before Federal Regulation_. 
Princeton, NJ: Princeton University Press.

Young, James Harvey (1967). _The Medical Messiahs: A Social History 
of Health Quackery in Twentieth-Century America_. Princeton, NJ: 
Princeton University Press.


Marc T. Law is an assistant professor of economics at the University 
of Vermont. His research focuses on the causes and consequences of 
government regulation, with a specific focus on food and drug 
regulation, occupational licensing laws, and advertising regulation. 
Recent publications include "The Effects of Occupational Licensing 
Laws on Minorities: Evidence from the Progressive Era" (forthcoming 
in the _Journal of Law and Economics_, May 2009, co-authored with 
Mindy S. Marks); "The Political Economy of Truth-in-Advertising 
Regulation during the Progressive Era" (_Journal of Law and 
Economics, May 2008, co-authored with Zeynep K. Hansen); and "How Do 
Regulators Regulate? Enforcement of the Pure Food and Drugs Act, 
1907-38" _(Journal of Law, Economics, and Organization_, October 
2006).

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