Gilmartin, the 1997 Robert S. Hatfield Fellow in Economic Education, delivered the Hatfield Address Sept. 25 in Schwartz Auditorium of Rockefeller Hall.
Merck, the world's second largest pharmaceutical company, is the maker of such drugs as Cozaar (for reducing hypertension), Varivax (to prevent chickenpox) and Pepcid AC (for the prevention and treatment of heartburn) and the AIDS drug Crixivan, which it released last year.
Following an introduction by Cornell President Hunter Rawlings, Gilmartin addressed the importance of continued research and development into new drugs in his remarks titled "America's Leadership in Pharmaceutical Research: How Can We Keep Winning?"
The U.S. pharmaceutical industry, he said, is unmatched in its research expenditures.
"U.S. companies account for 36 percent of research spending worldwide in pharmaceuticals. No one else comes close. We've doubled research spending during the 1990s. This year, the industry will spend a record $19 billion in R&D, and an estimated $100 billion in the next five years," Gilmartin said.
The reason America's medicine makers have remained healthy, Gilmartin said, is their ability to be flexible in the face of change and their strong capacity to learn.
"Unlike other industries where many companies have fallen by the wayside when economic conditions or technology take a radical turn, U.S. pharmaceutical companies have maintained their competitive advantage over time, despite significant changes in the science, technology and economic conditions that underpin the industry," he said.
And why have pharmaceutical firms been so flexible? It's because they are incubators of innovation, Gilmartin contends.
"Change has always been part of the industry," he said. "Our challenge to innovate is, perhaps, greater than ever before because drug discovery and development -- which have always been extremely costly and risky -- have become even more so and the health care marketplace continues its rapid transformation.
"At Merck, our focus is discovering new medicines through breakthrough research, knowing that -- if we succeed at this objective -- we will grow and prosper as a company."
The company has indeed prospered. Merck posted 1996 sales of over $19 billion, an 18.9 percent increase over 1995 figures.
But foremost in business plans has to be the patients, he said.
Quoting former Merck CEO George W. Merck, Gilmartin said: "We try to remember that medicine is for the patient. We try never to forget that medicine is for the people. Not for the profits. The profits follow, and if we have remembered that, they have never failed to appear."
In addition to his lecture, Gilmartin met with university administrators and faculty, among them Anthony Gotto, provost for medical affairs and dean of the Cornell Medical College in New York, to discuss university and corporate partnerships, licensing agreements and other ways to increase university and industry interaction. He also spoke with students in an economics class and delivered a lecture on corporate leadership to students at the Johnson Graduate School of Management.
Gilmartin's visit to Cornell was supported by the Hatfield Fund for Economic Education, which was established at Cornell in 1981 by the Continental Group Foundation to honor former Continental Chairman Robert S. Hatfield.