The world relies largely on private firms for the development of new medicine, and the system is efficient. Driven by the incentive to profit from sales of new pharmaceuticals, drug companies risk millions of dollars and years of work to shepherd basic scientific discoveries through laboratory and human testing in the hope of developing a marketable drug. For example, it is estimated that in 2002 alone, pharmaceutical companies invested $45 billion the development of new medicine worldwide.

While the profit incentive generates such enormous private investment in human drug development, it also encourages firms to pose inappropriate risks to the safety of human subjects when speeding a new drug to the market. The risks posed by financial conflicts of interest associated with human subjects research on new pharmaceutical products are notable examples, both in the U.S. and internationally.

The rise and fall of the pain-killer Vioxx is one of the most remarkable marketing stories in pharmaceutical history. A true riches to rags tale, its events unfolded with lightning speed in an industry defined by lethargy.

On May 20, 1999, the Merck Company secured FDA approval of Vioxx for the management of acute pain in adults and for relief of the signs and symptoms of osteoarthritis. From that date through August 2004, 105 million Vioxx prescriptions were filled in the US and an undetermined number were filled outside the US. In 2003 alone, Merck's worldwide Vioxx sales totaled $2.5 billion.

The fall happened even more quickly than the rise. In March 2000, Merck published a study raising the specter of cardiovascular problems associated with taking Vioxx. In November 2000, The New England Journal of Medicine published a study raising similar concerns. In February 2001, an FDA advisory panel became sufficiently concerned about the association of Vioxx and cardiovascular events that it advised the FDA to require a label warning about the possible link.

Multinational corporations often wield more power than many of the world's nations. Their immense wealth and political capital make them almost hegemonic entities. These domineering enterprises are often able to undertake profit-making endeavors, particularly involving the consumption or extraction of natural resources, in developing nations with little or no regulation, and often without meeting the social and environmental standards adhered to in the United States.

The emergence of multilateral free trade agreements, specifically within the developing world, has further enhanced the ability of multinational corporations to proliferate their business. Concomitant with the rise of free trade, political and legal barriers to multinational entry into the economy of developing nations are rapidly disappearing. In addition, many nations are unwilling and unable to protect their citizens from environmental abuses through domestic law. Therefore, finding a legal mechanism capable of checking the hegemonic power of multinational corporations is extremely important to the vitality of most developing nations.