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CHEMIE GRUNENTHAL, a West German pharmaceutical company, created thalidomide in 1953. It was used as a tranquilizer or sleeping pill and was being touted as a drug with no side effects. It was also used to treat morning sickness during pregnancy With its lack of side effects, it was deemed safe enough that it did not require a prescription; therefore, it was widely available over the counter. Eventually, the German manufacturer began to license the distribution of thalidomide in other countries.

The American pharmaceutical firm, William S. Merrell Company, wanted to distribute thalidomide in the lucrative U.S. market. On September 12, 1960, the Food and Drug Administration (FDA) received a New Drug Application (NDA) from Merrell requesting approval for thalidomide. The NDA filed by Merrell contained glowing claims that the drug was safe. Animal and human tests had been conducted and there were no known problems. And since thalidomide was already widely used all over the world, Merrell and the FDA thought the approval process would be routine. The approval was assigned to Dr. Frances Kelsey, the FDA's newest medical officer.

Kelsey reviewed the NDA along with an FDA pharmacologist and chemist. They noticed many inconsistencies with the data and omissions. Kelsey sent Merrell a letter stating that she was concerned about the testing of the drug and the many inconsistencies that were found, and more testing was needed before the FDA would grant Merrell distribution rights. Merrell was anxious to have the drug on the market and put pressure on Kelsey for approval, she declined. Meanwhile, some disturbing reports were surfacing over the drugs' side effects. Kelsey was also concerned about the drug's use by pregnant women. In the early 1960's more research was conducted on the effects of drugs on fetuses. Kelsey raised these questions to Merrell and ordered more testing. Merrell responded by putting intense pressure on Kelsey to approve the drug, but she did not yield.

Prior to the application to the FDA, in 1957, Chemie Grunenthal had early indications of the drug's dangers, as well as limited effectiveness but did not disclose these results. In fact, Grunenthal continued to promote the drug in spite of the growing number of reports of its dangerousness. Numerous women who used thalidomide during pregnancy were bearing children with extreme congenital abnormalities.

Many of the children were born with their extremities attached in odd places. Shortly after the birth defects were observed, thalidomide was banned worldwide, but it was too late for thousands of babies. An estimated 8,000–80,000 children in nearly 50 counties were born deformed because thalidomide had been marketed as being safe to use by pregnant women. Because of this, it became known as the “drug that deformed.”

It was not until the considerable scope of harm being done was widely publicized that Grunenthal was forced to withdraw thalidomide from the market in 1962. Because of the various medical journal articles and news reports of the devastating effects of thalidomide and Kelsey's stubbornness for more testing by Merrell, American women and their unborn children averted tragedy. The women outside of the United States, unfortunately were not that lucky. Upon further investigation, much of Grunenthal's behavior, prior to withdrawal of the drug from the marketplace, came under scrutiny.

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