Pharma Careers: The Uncertain Future
5 CommentsBy Ed Silverman // November 19th, 2007 // 12:58 pm
These are trying times in the pharmaceutical industry. The shrunken pipelines and shareholder pressure are prompting the equivalent of a convulsion as one big drugmaker after another announces job cuts - the list is growing longer every month. Take a look. In two weeks, Bristol-Myers Squibb will make its own cutback formal, including chunks of employees who work in legal, finance and compliance as the drugmaker departs from several floors of its Park Avenue headquarters.
In the last three years alone, the industry has had nearly 70,000 layoffs, as noted by RegentAtlantic Capital, a financial advisory firm, in a new report (here is the draft version). Two different pharma ceo’s, who spoke with the firm but weren’t identified, believe that “an entire generation” of upper-middle and senior-level execs - as many as 50,000 individuals - will be displaced, thanks to further consolidation, emphasis on fewer business lines and outsourcing. And that doesn’t include sales reps and researchers. (Click on the chart to see layoffs).
But is there really no future? The firm, which of course is trying to drum up business, identifies a few key areas of potential growth - commercialization of dormant compounds; generics and biosimilars; oncology and CNS research; diagnostics and personalized medicine, and consumer goods companies. 
And to make a transition, you should be able to manage decentralized business units; work in joint ventures and across division and cultures; integrate patents, science and business development; bust silos by balancing marketing and scientific pursuits; understand third-party payers; understand regulators; and overhaul HR thinking.
But, surprise, none of this will be easy. As the firm notes, “the next five to ten years will be very disruptive for many longer-term employees and will create far reaching consequences for any individual working in this field…These changes will make working at a pharmaceutical company less predictable and individuals will increasingly need to think in terms of a career in the industry and not at just one company. And the skills in the highest demand by employers in the future will differ than those in the past.”
Tom
I’m now in my third decade with pharma, but I can see the writing on the wall. No, Pfizer, Merck and others will not go away entirely, but they will contract significantly and the number of new therapies coming to market will continue its downhill pattern. Kids will continue to realize there’s a better future in being a lawyer than a scientist, and China will gladly take the remains of our industry and reconfigure it for the less hostile Asian market. What went wrong? In my opinion, several things, but I’ll address the two most important. Foremost was a business model that relies on the U.S. to fund virtually all global R&D. When other countries started to impose national price controls years ago, industry took the path of least resistance and increasingly relied on the U.S. to bankroll basic research, clinical trials, and the cost of failed projects. Second was direct-to-consumer advertising. It started out as a means to reach patients with disorders they typically wouldn’t seek medical treatment for. That was fine, but then the practice branched out to drugs used for serious illnesses. Patients began to see their medications as commodities, and expected them to be 100% efficacious and have no side effects. For industry, this was like putting it’s head on a chopping block. The commodity mindset plays right into the hands of media, politicians, and activists, who sell copy, win votes, or earn donations with populist anti-pharma messages on complex medical topics. Don’t get me wrong, some of the criticism is well-earned, but much of it is a hyperbolic cherry picking of facts that appeals to emotion over reason. Well, I’ve had my say. To all those readers who live to hate us, you will achieve the dream of a pharma-free America in your lifetimes. Enjoy!
Nathan
Good comments, Tom. I like your view of DTC advertising. I haven’t heard that perspective before.
I’ve been in the industry less than a decade, so from my perspective things have always been very volatile. Here’s a few things that give me a modest amount of optimism for my career in this industry:
1) Growth opportunities abroad. Tom, you are correct that the US has born the burden of R&D. But we’ve also, as researchers, reaped the benefits. If pharmaceuticals really take off in India/China, the R&D (for the short term) will likely be done largely here in the US. This may offset some of the current troubles we are having. While offshoring has gained a lot of press, the hard-core pharma research has bucked this trend (knock on wood) and stayed here in the US and Europe.
2) Major breakthroughs in a significant disease area: think HIV, HCV, alzheimer’s, cancer. If a single company makes a breakthrough in any ONE of these areas, they will likely have the cash to bankroll large amounts of R&D for the next 10-15 years.
3)Systemic health care costs: it seems counterintuitive, but drugs are actually saving the economy large amounts of money due to shorter hospital stays, treatments that avoid surgery, and higher productivity due to less work time missed. If and when this is recognized, I’m somewhat hopeful that politicians and the public will recognize the value of pharmaceuticals and continue to allow a political climate where pharma R&D can prosper.
In spite of these three areas of “optimism”, I have to agree that the mood of all of my colleagues in pharma R&D is quite grim. Technologies come and go. Aeronautics & space flight had their heyday a couple decades ago. Pharma is coming down from the highs of 10 years ago. It seems like the next generation of scientists have nanotechnology and the energy sector to look forward to. There will always be a need for scientists, but exactly they are employed will constantly be changing.
John
I totally agree that the days of Pharma Reps are numbered. That is why I am interviewing now to get out. I have been in it for six years, but the log-jams in the offices and more and more physicians closing their doors to reps really makes this job difficult. When I say “difficult”, I mean that a person who values being a true consultant to the physicians does not have that opportunity because of the time constraints. I have never been one to give a 30-second marketing message. I always would like to talk about a patient type and an interesting case, to show how our product can make a difference, but the physicians just don’t have the time. And it is not their fault.
It is not the reps fault, either. Because the majority of reps that I have met are intelligent and respectful of the physicians time. But when there are five reps waiting to see a physician, because he only sees them on Weds and Thurs, the looks that I get from the patients does not make me feel good about my job.
Also, the Direct-to-Consumer Advertising has to stop. It turns my stomach watching the News and every other commercial is for Lipitor or Zetia or some other drug. I think the drug companies should only be allowed to advertise the “Disease State”. This way, the people who argue that patients need a way to learn about quality-of-life drugs will be satisfied. But the patients will not know the name of the drug, only that there is a “new treatment for XXXXXX”. Here, it is the doctor that will make the call on the medication, not the patient.
This industry is a great industry, and the products have allowed people to live healthier and more active lives. But the marketing tactics need to be looked at.
Larry
R&D and slimmer pipelines may be an issue but the Pharma Industry’s slavish commitment to the hopelessly non-cost effective mirror territory model has much to answer for. No wonder Physicians have insufficient time for meaningful discussion with Representatives. From a shared territory with two main accounts (ugh) I changed companies and now have a challenging territory with 80 hospitals and infinite prospects all to myself - just like when I started 30 years ago. Bliss!
Ryan
I think Tom’s post sums up the situation best. To add to the dim prospects, look no further than next year’s Presidential election.
Regardless of you political affiliation, if any, it’s hard to ignore the fact that one party is in favor of a socialist government. This includes healthcare & wealth re-distribution. America has the BEST healthcare in the world. While not perfect, the free-market has led to it’s success. If anyone thinks healthcare is expensive now, wait until the Nanny State gives it to us for free.
My colleagues who worked in Pharma after the ‘92 election cited knee-jerk layoffs by many companies as they braced for socialized medicine. Thankfully, Socialized Healthcare legislation died a quick death, but the damage had been done to those laid off. That’s the price we pay for being in sales, specically pharma sales.
Good luck to all.