Beset by thinning pipelines, patent expirations and pricing pressures, the pharmaceutical industry has shed tens of thousands of jobs over the past several years. And given rising costs and strategic challenges, it is hardly surprising that the surviving employees are anxious about their jobs. A new poll shows that 44 percent worry they may become 'redundant' over the next 12 months.
The poll was conducted late last year, before the latest round of industry layoffs, by the way. Since then, Challenger Gray & Christmas noted that 4,071 pharma jobs were eliminated in January in the US alone, the third-highest industry tally, behind retailing and the financial sector (look here). This did not count, for instance, thousands more planned job cuts announced by AstraZeneca (see this).
Asked if they expect staffing levels to increase, decrease or stay the same over the next year, an optimistic 50 percent of those surveyed said their crystal balls show everything remaining constant. But nearly 32 percent foresee a decrease and just 19 percent look for an increase, according to Pharma IQ, which surveyed 535 industry employees during the waning weeks of 2011.
About 48 percent noted their departments had not been downsized. But of those whose departments were whacked, nearly 61 percent reported the job function was now being covered by a smaller number of people, while 25 percent pointed to outsourcing and another 10 percent say the job function had been moved to an emerging region.
Despite industry problems, more than 71 percent believe that pharma is undergoing a "dramatic change" due to the recession, with the US and Europe being hit equally hard. And nearly 48 percent think the industry is "ill-prepared to deal with another recession." Of course, timing is everything. Imagine if pipelines were flush and patents did not start expiring as the recent recession began.
Meanwhile, almost 40 percent believe that the R&D pre-clinical sector has taken the biggest hit during the recession. After that, 31 percent pointed to sales and marketing; 11 percent cited manufacturing; 11 percent named clinical work, and the remainder listed regulatory affairs, IT and distribution.
Where will investments be made? Nearly 31 percent of the respondents are betting on sales, while 22.5 chose R&D preclinical work and 21 percent cited clinical. Another 12 percent named manufacturing, while IT, distribution and regulator affairs garnered about 5 percent each. However, there was no consensus on marketing spending: 35 percent expect increased spending, 30 percent foresee a decrease and 35 percent say spending will remain static this year.
And despite the costs of bringing a drug to market, fewer than 20 percent expect their departmental budget to rise this year. Nearly 41 percent, though, expect a drop and a similar proportion do not see any change.
In case you were wondering, here is the composition of the respondents: nearly 28 percent came from the R&D preclinical sector, 15 percent from sales and marketing and 14 percent from clinical. The remainder came from others areas, including regulatory affairs, manufacturing, IT and distribution (you can read the complete report here).
15 Comments
With head count reductions and those related cost savings, why are we not seeing a significant increase in R&D efforts. Have these savings been put to use in retaining or increasing shareholder value only? I agree that the industry is facing a tsunami type of change but, the model was always out of sync compared to more traditional types of industry.
When Celanese took over my company in the 80's, their management did not understand why a Drug Rep generated $1-2 million in sales when a Chemical Rep generated $100-500 million in sales with comparable expenses.
I wonder who was that moron who ran this poll, knowing the obvious. People in the pharmaceutical industry have been worried for at least 5+ years. This poll is cruel slap on those who are still employed.
Really surprising article.. Pharma Employees Worry About Jobs??????????
Hi Downbutnotout and Pharma Exhibition,
Thanks for the comments and, yes, this is not a surprising finding, as I attempted to note in the headline. I can't and won't speak for Pharma IQ, but I chose to run this simply because it fleshed out some of the details surrounding the current environment.
Of course, one could argue that, perhaps, 44 percent is a low number, given the extent of the cuts - past and present. Maybe the anxiety runs deeper and wider, and this prompts some additional insights. Maybe not.
In any event, thanks for stopping by, ed
Ed, I'll bet that if there were the following question, you would get a 98% positive response among all groups:
"Have you updated your resume within the past three months?"
It is not a good field to be in any longer, so don't go there is you are getting out of college looking for a job.
Because of the present job situation and their excess of spare time, some drug reps have a second job that affords flexible hours and good pay, such as selling insurance or real estate. One rep I know used to be a Davis Cup caliber tennis player, and gives tennis lessons to rich ladies looking for husbands. Probably makes as much or more money than from the rep gig.
MBA's are really brilliant, worth every penny of their multi-million compensation packages.
Pipeline drying up? Fire the very people who can fill it to save money.
Truly brilliant. I'll bet they will award themselves even bigger bonuses.
surveyed 535 industry employees
How can a survey of 535 people really represent an opinion of a population of tens of thousands of people in the pharmaceutical industry?
Dr Moorehead, 535 might be an ok number if they did statistical sampling. But I see no stats guys on their staff, so you are probably right.
I think the most remarkable finding is that "60% of employees working in departments that have faced the ax say their groups are doing the same amount of work these days--but with fewer people". In other words, despite the pressure, in most cases there has been no attempt to adjust the business model, eliminate needless work, or retool the business for the leaner times ahead. This is yet another indictment of the dubious leadership that besets many (though not all) companies.
To put the anxiety in human terms, here are some pharma employee comments from another website:
"I'm 36 living in a dinky condo which is under water by 150k. I have 70k in cash assets, 401k less than 85k. Luckily ZERO credit card debt. I feel like I'm really behind in life and retirement. Things just don't add up, I believe I'll have to work until death. I recently took a relaxing trip to south america and now I feel that I'm getting robbed. Robbed of a peace of mind. I'm tired of hearing about startups, Facebook, iPhone and iPads and how social security will not exist by the time i've retired.
Why has there been so much fluctuation in our economy. We are living in the land of opportunities and the only opportunity I have managed thus far is to see my assets crash.. so much ups and downs in the past 12 years. I just want to see a slow increasing market ... I don't want 20% up one month and down 30% the next.
I'm stuck in a world of gambling and I don't even gamble or live a extravagant lifestyle."
There's your reality check for this evening.
actually, he/she sounds better off than most people. who can afford a "relaxing trip to South America"?
RHETORICAL!! that was a rhetorical question!
Today's story illustrates the reality of the modern automated workplace. That is you only need two individuals to run a factory- a man and a dog. You need the man to open up the plant and feed the dog, and you need the dog to keep the man away from the machines. Actually, with a timer, a conveyor belt and an electric can opener for the dog food (see "Einstein" in Back to the Future, Pt 1) you really don't need the man to feed the dog, just keep the dog company.
http://finance.yahoo.com/news/analysis-u-factory-jobs-rebound-201437276.html