From The Editor | December 22, 2014

Employment A Leading Indicator For Pharma Industry

By Louis Garguilo, Chief Editor, Outsourced Pharma


An article I wrote this spring on long-term unemployment in the pharmaceutical industry featured Glen, a former colleague who'd been out of work.

Here's the update: A few months shy of an unwelcome anniversary of three years without one, Glen landed a job. One that will take advantage of his talents as an experienced Ph.D.-scientist, global executive and manager, and somebody who just gets customer service.

Good for Glen, good for the biopharma service provider who hired him, and good overall for the biopharma industry.

But unemployment remains an issue as we head into 2015. Glen gave me the news on a day The New York Times featured a front-page article titled, "The Vanishing Male Worker, Waiting It Out." It described what Glen and so many others (including women) face in the U.S.:

"The share of prime-age men – those 25 to 54 years old – who are not working has more than tripled since the late 1960s, to 16 percent. More recently, since the turn of the century, the share of women without paying jobs has been rising, too."

This is a broad-brush measurement, but the reduction in worker participation correlates with what we've been experiencing, particularly at large biopharma companies.   

As pundits provide their annual industry analysis on trends and key events to wrap up 2014, here's the item that should make every list: Employment participation is still trending to the downside. This year saw more cutting of positions at both ends of the drug discovery spectrum: Ph.D.s in discovery and manufacturing-related employees. This is due to both micro- and macro-economic conditions, including weaker pipelines and patent cliffs, M&A and other consolidating activity, healthcare policy … and an increase in outsourcing.

Throughout 2014 Outsourced Pharma has highlighted how some of this scientific talent ends up at service providers. Companies such as Charles River have publically stated a large majority of recent hires come directly from the ranks of pharma.

We'll learn to what degree this worker transfer continues in 2015. The trend could be affected negatively if M&A and IPO activity in the service-provider sector begins to impact current employees and hiring. Stockholders expect financial returns quickly; private investors agree to acquisitions only with promises of higher productivity and profitability. Let's not forget Glen was let go from a global service provider that has been restructuring, focusing on stock price and changing service focus to those deemed more profitable. 

There's no inherent judgment here on the industry regarding employment practices, only an attempt to keep the changing employment picture top-of-mind. In the end, nothing is more important to individuals, companies, the industry as a whole—and healthcare consumers—than who and how many are on the job.

Another 2014 trend complicating matters is the increasing competition with other industries for new and highly skilled talent. A recent article in The Wall Street Journal gave two examples. The first is a biostatistics Ph.D. who "spent years mining medical records for early signs of breast cancer," but now writes statistical models to analyze terms people use when they search Etsy (commerce website operator) for new fashions. The second is a 28-year-old Ph.D. at Yelp (crowd-sourcing business review portal) who turned his dissertation research on genome mapping into a product for the company's advertising team.

Is the next generation purposely moving away from careers in our industry because of employment unpredictability?

Maybe they are being led astray. I recently spoke to a biologist, whose husband is also a Ph.D. scientist, both working in the pharma industry. Their children inherited the inclination for science and are excelling at school. However, this mom and dad are doing everything they can to steer their children away from a pursuit of science related to the bio/pharma industry. Prospects, they say, are just too uncertain.

A Coda On 2014

This year saw the continuation of such trends as: advances in personalized medicine and in the fields of antibody drug conjugates (ADCs) and immunotherapy; a widening focus on biosimilars and continued spotlight on generics; pharma acquisitions coupled with re-aligning of intellectual and fixed assets; global corporate strategies to take advantage of national tax policies (which were so powerful it helped lead to policy change in the U.S.). Particularly in outsourcing, we had news-making IPOs and M&A activity, a focus on sponsor relationships and questions of quality at global manufacturing facilities.

But the one variable that most affects individuals and demonstrates industry strength or weakness is the ebb-and-flow of employment.

Back to Glen, these past years have not been easy. He and his wife were forced to sell their home and move into an apartment.

For now, though, and to adopt a famous line from the annals of journalism: Yes, Glen, there is a Santa Claus.

And Happy New Year to all our readers at Outsourced Pharma. It has been an honor and a pleasure joining you in 2014. See you early in 2015.