Still More Pharma Jobs Go By The Wayside
18 CommentsBy Ed Silverman // November 3rd, 2010 // 8:17 am
And the job losses keep on coming. Although this time around, the monthly tally prepared by Challenger Gray & Christmas does not single out the pharmaceutical industry as it has in nearly every other report this year. Just the same, drugmakers shed another 1,929 positions last month, bringing the number of jobs eliminated so far this year to 45,263.
This is hardly surprising. In the past few months, several drugmakers disclosed plans to reduce staff or continued with previously announced cuts. Among them has been Abbott Laboratories, Bristol-Myers Squibb, Lundbeck and Johnson & Johnson, among many others. And today, Biogen Idec announced a restructuring that involves eliminating 650 jobs, or 13 percent of its global workforce (see here).
However, as we have noted previously, there are two caveats. First, not all job cuts are disclosed, since some companies cut staff in dribs and drabs and, therefore, are not required to file notices with their state governments. The implication is that job losses are greater than the survey implies. At the same time, though, this tally does not necessarily present a complete employment picture, given that selective hiring continues for various positions at numerous companies. So the net effect may, unfortunately, be skewed. Yet, the larger trend is clearly not favorable.
industry insider
I think that it’s time to invoke the US automaker analogy. Like the US auto industry, the jobs being lost in US pharma are being taken up by ex-US workers. The other analogy is that, like the auto industry, many of the 45,000 US pharma workers will never find full time employement in pharma for the rest of their careers. Even the allied health professions are being saturated. After all, how many HS chemistry teaching positions could there be to soak up the ex bench chemists? I’m not worried about the reps. If they have selling skills they will find work, albeit at probably a commisssion only job with or without benefits. I’m more concerned about the bench scientists, many of whom are highly creative, but whose creativity has been stunted in the top-down world of Big Pharma R&D management.
pharmavet
I’m not concerned at all about the reps, especially the hot female ones.
Sam R.Ph.
The other day I picked up a drug by an American company and checked it
to make sure of the experation date. I was surprise to learn that it was
packaged in County Cork, Ireland - it then said, “see other side of label to
see country of origin”. The country was Spain!
Now I have nothing against Spanish or Irish workers having jobs, I just think they should be tax paying Americans working in the U.S.A.
I also checked out the carbon foot-print and this trip of sending the drug
from Spain to Ireland to someplace in the USA - amounted to 4,400 miles.
I wonder how much fossil fuel it took to make this journey?
industry insider
Sam, I have nothing against tax-paying Americans. However, by offshoring operations, that US company avoids pays corporate taxes at a lower rate than the 35% US rate, which is highest in the world. If you want to keep jobs in the US, lower the corporate tax rate. It’s much simpler than messing with the tax code to give tax credits to companies who repatriate those jobs. If we can get the corporate tax rate down to the mid 20’s we might begin to be competitive with ex-US. Once rhe jobs come back to US we can lower the personal income tax rate for that tax-paying US worker so that he/she will have more disposable income.
g
Industry Insider, the US has a flexible tax rate of 15-35%. The average corporate tax actually paid is 22%. That is pretty good. There are other costs associated with setting up shop in the US, including higher paid workers and regulations.
Sam R.Ph.
It seems to be a vicious cycle. Americans can not buy the corporate product even at a lower cost price because they are out of work or their incomes have not increased significantly. Corporate wants a lower tax rate, but that means the middle and lower income levels will have to pay more taxes. Even if corporate gets the lower tax rate, they don’t have enough business to support the employees they have and the next day 1,200 workers loose their jobs.
I fear that if United States does not become more industrial in nature than
being involved in just services, it will be a slippery slope that we will never recover from.
A recent artilcle in WSJ indicated that there was a 88% increase in this quarter up from 4 years ago with the abandoment of brand name prescriptions because even the co-pays were too expensive to buy.
industry insider
g, as you can see from the attached table, the individual states also slap on a corporate tax rate, ranging up to 12%. This is why states such as New Jersey are generally considered to have a business unfriendly environment because of the high state corporate tax, which Governor Christie is trying to lower. All things considered, America has a ways to go as far as being competitive with the rest of the world with regard to corporate tax rates.
http://en.wikipedia.org/wiki/Tax_rates_around_the_world
Sam R.Ph.
So let me get this straight, the Obamacare law says Americans cannot buy cheaper drugs from other countries. However, if you are a pharmaeutical corporation like I described previously - from Spain to Ireland to US - that’s okay. The American public is not taxed on prescription drugs, but they do get charged more for the same drugs than people living in other countries.
Since brand name drugs are under patent for many years, the only thing
that is competitive is - what country can I profit from the most? This is
an industry that professes their concern for the health of their customers.
I must remind of what I quoted before - A recent artilcle in WSJ indicated that there was a 88% increase in this quarter up from 4 years ago with the abandoment of brand name prescriptions because even the co-pays were too expensive to buy.
harpy
and yet, they never seem to have trouble finding hundreds of millions to give top execs in bonuses.
industry insider
Sam RPh, is what you are describing the phenonenon of “proportional copays”, i.e., the more expensive the drug the higher the copay, even within the same tier?
Sam R.Ph.
industry insider, it is hard to say, I have seen the same brand name drug with different co-pay amounts depending on the prescription plan. If the employer’s benefit manager pays more into the policy, the chances are that the co-pay could be different.
Also, the insurance company’s Pharmacy Benefit Manager(PMB) may have a contract for certain brand. An actual example: a patient had been getting a certain brand of birth control pill. Her co-pay for the original Rx and 6 refills had been$25.00 each time. At the next refill the co-pay became $37.50!! The patient questioned the increase in the co-pay price.
I called the insurance company and questioned the change in price. The explanation given to me was this. The insurance plan has taken this particular brand of birth control off their normal formulary and put it into another tier. (The PMB got a better contract with another brand).
When I asked what brand will they cover at a lower co-pay, I was told that the person I was talking to had no idea and the patient will have to call her employers benefit manager to find out the name of the new brand. Pharmacists spend up to 8 hours a week talking to insurance companys. It hard to talk to India all the time.
Patients are frustrated and angry about the difficulty of getting their Rx
drugs. They always say they don’t blame the pharmacist, but we are the only ones available to listen to their displeasure.
industry insider
Thanks. For those 8 hours on the phone with the insurance cos., I’m sure it’s another 8 hours on the phone to doctors explaining insurance refusals, getting prior authorizations, etc. In fact, I can’t remember the last time I walked into a pharmacy and spoke with an actual pharmacist. Rx’s are handled in the chains by pharmacy technicians, and heaven help you if you have a queestion about pharmaceutics. You get referred to the patient-unfriendly package insert, for which the pharmacist that I never speak to collects a $2.00 “counseling fee” on each script.
Suzanne
Industry Insider wrote, “You get referred to the patient-unfriendly package insert, for which the pharmacist that I never speak to collects a $2.00 “counseling fee” on each script.”
Does this mean if I think my insurance in screwing the independent pharmacy we use, I should always check that I received counseling when I sign for my daughter’s meds? I’ve been choosing ‘declined counseling’, which felt awkward since they always take the time to speak with me, ask about my daughter, etc. Caremark would be reimbursing CVS more for the same drug, right? Can I get them a couple more bucks if I always ‘accept’ counseling?
EddieVos
Insider: lowering corporate tax rates to multinationals using every loop hole to give Americans the most expensive drugs on the planet ?
Extending the Bush tax cuts for the rich and deficits will sink the U.S. even quicker. This is the opinion of several US friendly Canadians like me: you guys are doomed !
70% more on ‘health care’ and you live shorter than about 20 countries that pay less and your new House Leader Boehner [sp] just said: “we have THE best medical system on the world.”
Some ’single payer’ or painful legislation may fix part of that but it won’t happen, you are doomed with that pharma-medical system of yours: time to start paying real value because the system is not sustainable, we all know that. Time to get smarter in a sustainable system or lay-offs will continue.
industry insider
Eddie, you are right. We are doomed. The problem is not the health insurance system. It is the cost of health care itself. We suffer from over-utilization, maldistribution, too many superspecialists, too many procedures, too many expensive drugs and too many lawyers, all of which serve to drive up the cost of health care. The system is broken and cannot be fixed piecemeal. Pharma is a piece of the problem, but I can’t quantify how much. The only thing that I have seen work is when companies that can’t offer “Cadillac health insurance plans” offer what we call catastrophic coverage, with everything over $2500/year covered. The individual is responsible for all costs under $2500. Amazingly, when individuals are forced to pay for doctor visits out of their own pockets they become much more judicious about how often they seek treatment for the most minor of ailments. This approach frees up resources to take care of the more serious illnesses. I’d like to see it at a national level.
However, the biggest problem IMHO is in the psyche of the American people itself, which makes Americans different than Canada and Western Europe. As reflected in this week’s election, Americans by nature are more resistant towards government intervention in their private lives, such as mandating individuals to purchase health insurance. Even the bedrock of American law, the US Constitution was deliberately written with the intent of limiting the power of the State to control the lives of its citizens, even when the State thinks its in their best interest. This week’s election was as clear and direct a repudiation of government-mandated healthcare as one could imagine. Even the normally pro-Obama european news organizations agree with this observation.
In the end, if it is anything that dooms the US health care system it will in part be Americans’ unwillingness to do what the government thinks is good for them.
industry insider
Suzanne, I don’t know the answer. I also have CVS/Caremark, and I’ve never seen the option to accept or decline pharmacy counseling. Consider yourself fortunate to have a pharmacist that will take the time to speak with you.
Sam R.Ph.
industry insider - just like a restaurant, a physician or a lawyer, if you do
not get the results you want and still go back, then you are a glutton for
punishment. Nothing gives me more pleasure than to help a patient muddle through an assortment of medications that each of their physcicians prescribed. I have pointed-out to patients that they should question the need of duplicate medications, drug interactions and make
suggestions to counter-act various side reactions.
There are pharmacists and then there are pharmacists - also there are chains and even privately owned pharmacies that set policies as to how much time is spent consulting with patients.
Anyone can count 20 tablets, but a pharmacist who interested in clincal issues is where I am proud to be. So “insider” if you have any problems with medications you are taking, write to me and I will try to help you.
EddieVos
Insider, I could not agree more with the first 7 lines re being doomed. Making the system financially less accessible will restrict access but it’s not discriminatory re true medical needs.
In our excellent Canadian system, we have massive over use of drugs and of procedures and clearly we too have to introduce better quality of outcome measures and put the brakes on that growth since there is zero evidence that our increased spending over the last 5 or 10 years has made people healthier.
For example, in 10 years, the Canadian per capita expenditure for cardiac interventions [CABG + PCI] has doubled to $100/year without any patient benefit — since only about 1 in ~20 of such interventions are necessary and of benefit. There is nothing to put the brakes on such stuff. My provincial prescription drug premium has more than doubled in the last 10 years [statins are the major culprit] with zero brakes and no survival benefit.