Derham was born into slavery in Philadelphia, Pennsylvania. He was owned by several doctors, and one of his owners, a physician named Dr. Bob Love, encouraged him to go into medicine. By working as a nurse, he purchased his freedom by 1790. He opened a medical practice, and by the age of 20 his annual earnings exceeded $3,000.
Derham met with Dr. Benjamin Rush, the father of American medicine, and Rush was so impressed by Derham that he encouraged him to move to Philadelphia. There he became an expert in throat diseases and in the relationship between climate and disease.
He also had 10 siblings. Derham disappeared after 1801 and died of a heart attack.
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