The Rexall Story: A History of Genius and Neglect

Published by EH.NET (September 2005)

Mickey C. Smith, The Rexall Story: A History of Genius and Neglect. New York: Pharmaceutical Products Press, 2004. xxi +175 pp. $24.95 (paperback), ISBN: 0-7890-2473-X.

Reviewed for EH.NET by Marvin Fischbaum, Department of Economics, Emeritus, Indiana State University.

A recent television advertising campaign began with the sentiment that if there were a place called perfect there would be — (insert your favorite fantasy) — followed by the tag line; “Life isn’t perfect, that’s why there’s Walgreens.” Once, as a young boy in post World War II Philadelphia, I thought I knew of a perfect place. It was where the friendly Rexall family druggist hung out. I could harbor this illusion because I never actually saw a Rexall store. While as many as one-fifth of the drugstores in the U.S., nearly 10,000 in all, did business under the Rexall banner, the strength of the organization was in small towns. Still I was engrossed by the Rexall message on popular radio shows such as Phil Harris, Jack Benny, and Amos and Andy. I was convinced by the radio commercials, and by full page newspaper advertisements, that the Rexall One Cent Sale was one of the wonders of the world. On excursions from my neighborhood, I searched for the blue and red Rexall sign, expecting to find magic.

Besides appealing to nostalgia buffs, a history of Rexall could also be of interest to scholars. Drug retailing changed dramatically during the twentieth century, the result of changes in manufacturing technology, in medical knowledge, in the regulatory environment, in retail distribution, and in advertising and marketing. In 1903 Louis Liggett organized the United Drug Company to manufacture drugs and related products, and to franchise Rexall drug stores with exclusive right to sell those products. Pharmacists at that time purchased fine chemicals and botanicals and compounded their own medications. Any medication, including narcotics, could be sold without a prescription. Pharmacists provided medical advice and treated minor problems. In contrast, medical education was problematic and often hospitals did more harm than good. Small towns and rural areas dominated the landscape and on store-lined “Main Street” the pharmacy held a place of prominence at the corner.

Times, though, were changing. Pharmaceutical manufacturers with recently developed pill-making and capsule-filling machinery could provide medications in doses of more standard efficacy. Government regulation became significant with the Pure Food and Drug Act of 1906. Medical Schools and hospitals improved dramatically after the Flexner Report of 1910, therefore the position of drug store owner as pharmacist went into relative decline. Advances in paper making from wood pulp and the invention of the linotype machine in 1886 lead to the penny newspaper and with it the beginnings of dramatic scale economies in advertising. While mom-and-pop stores dominated, department stores and chains were making inroads.

Mickey Smith, the registered pharmacist, is well qualified to write a popular or nostalgic history of Rexall. He can be a lively writer and is an avid collector of old radio tapes and pharmacological memorabilia. Smith (the Frederick A.P. Barnard Distinguished Professor Emeritus of Pharmacy Administration at the University of Mississippi, author of a textbook on pharmaceutical marketing and the recipient of the American Pharmacists Association Tyler prize for stimulation of research) is eminently qualified to write a scholarly history of Rexall.

Smith’s book strives to satisfy the interests of both the nostalgia buff and the historian. This leads to compromises and perhaps a certain tension. Historians would prefer more extensive documentation of sources and perhaps more critical analysis. Nostalgia buffs might not be fully comfortable with some of the tables, some of the contract details, and the organization of the four core chapters into marketing’s four p’s — product, price, place, and promotion. Perhaps the central dividing issue might be how to characterize. the two dominant entrepreneurs, Louis Liggett who over four decades founded and guided the growth phase of the organization, and Justin Dart who over twenty-five years deemphasized Rexall while building a conglomerate empire. Smith relates the musings of former franchisees and former Rexall employees, who universally view Liggett as a hero and Dart as a villain. Smith the pharmacist who pines for the preservation of small town America seems predisposed towards seeing the characters in black and white hats, but in the end the evidence compels him to present a more complex and ambiguous picture.