The pharma landscape after the Great Recession
By Eric C. Buxton, Ph.D.
As 2018 ends, attention in the media is devoted to the tenth anniversary of the Great Recession. If you have been in the pharma/contract research organization (CRO) world more than ten years, it is very likely that you and your colleagues were impacted by the changes in the pharma industry that began around 2008. The year started with major pharmaceutical companies employing 80,000 more workers than they would at the end. Pfizer was one of many companies that kept the job purges going in 2009 with another 1,000 jobs cut with more following in 2010. In many cases, the financial crisis was not the direct cause of the layoffs, but the timing was terrible for those looking for work.
An April 10, 2009, article in Science by Clifford Mintz1 described the employment picture. After peaking in 2006, employment began to decrease in 2007, and some major acquisitions and mergers were initiated to bolster lagging drug-development pipelines and fears of diminishing revenue with impending patent cliffs. Three major deals emerged in this timeframe. Merck merged with Schering-Plough, Pfizer bought Wyeth, and Roche bought Genentech. Other smaller, yet still significant acquisitions during this time were MedImmune by AstraZeneca, Millennium by Takeda, and ImClone by Eli Lilly. While U.S. employment in the pharmaceutical industry has shrunk, global employment has grown, most notably in Asia, where there are more than 3 million employees. Pfizer was the largest pharma company by sales in 2008 and remains so in 2018. GlaxoSmithKline was number two, but has been replaced by Roche. Sanofi-Aventis was and is third largest. Johnson and Johnson moved from seventh to fourth largest while Merck remains number five.2 Shuffling in the top ten aside, R&D spending has risen steadily over the past ten years. Combined pharma and biotech R&D spending is now greater than $80 billion per year.3
As large pharmaceutical companies shrank, CROs grew. Ten years ago, the top five CROs worldwide employed around 40,000 people, and today they employ more than 100,000. There have been many mergers and acquisitions in the past ten years, and currently LabCorp is the largest CRO with more than $10 billion in revenues in 2017 followed by IQVIA, Syneos Health, Parexel, and PRA Health Sciences rounding out the top five.4 Most of these companies have a different name than they did ten years ago due to mergers. These mergers have also given the large CROs expanded capabilities, allowing them to be a “one-stop shop” for drug development.
Lost in the discussion of the mergers, acquisitions, and downsizing was the human cost. As the pharmaceutical industry transformed itself into a leaner and theoretically more efficient entity, thousands of families made drastic life changes. CROs were able to absorb some of the downsized employees, but not all. Some employees found new positions within their current company, others in different companies nearby, but many had to move and/or reinvent themselves as consultants or change industries altogether. Ten years later, the industry is still changing and the employment situation remains unsettled.
Adaptability is a skill not taught implicitly, but is vital for career progression and survival. Education is a means of building and filling a “toolbox” of skills. Employment in the pharma industry requires a wide variety of abilities. Career development (sometimes referred to as “continuing education”) is one way to increase adaptability and close the potential knowledge gaps created with changing jobs or responsibilities. Career development offers many benefits for the learner:
- increased knowledge,
- exposure to current trends and best practices, and
- presumably enhanced confidence.
Additionally, career development training can cover “soft skills” not usually taught to those in the science, technology, engineering, and math fields.
The pharmaceutical industry has been changing for as long as it has existed. However, the 2008 upheaval was an inflection point marking an increase of the dynamic conditions within. Ten years later, the employment situation is still very fluid. As R&D budgets grow, expenses need to be minimized, and human capital is expensive. Employers strive to maximize employee output while minimizing cost. Rapidly changing technologies, a global economy, and evolving job requirements make it even more important for employees to have a well-stocked skill toolbox. It is vital for scientists, clinicians, and technicians to maintain and expand their abilities for career flexibility. Continuing education is one means to help learn new skills, stay current, and advance one’s career. Travel and the associated continuing education budget line items may not always be of highest priority; however, education is an important investment, and due to dynamic conditions and self-preservation, employees may have to pay for their education out of pocket. Even if employers don’t realize that well-educated employees are productive and are better suited to help organizations navigate the challenging and quickly changing economic currents, as a pharmaceutical professional, your livelihood does. No matter the year or economic conditions, education is your best means to continued success and survival in an ever-changing industry.
We must prepare people to be nimble enough to adapt to an ever-evolving marketplace. And we must help them develop skills that will be valued no matter what tomorrow's jobs are—skills like creativity, critical thinking, problem solving, and collaboration.—Tae Yoo5
Eric C. Buxton, Ph.D. is a clinical associate professor and division chair in the Division of Pharmacy Professional Development at the School of Pharmacy of the University of Wisconsin Madison.
- Mintz CS. Financial Crisis Reshaping the Life Sciences Industry. Science. April 10, 2009. doi:10.1126/science.caredit.a0900048
- Ellis M. Who are the top 10 pharmaceutical companies in the world? (2018). Proclinical website. Published March 28, 2018. Accessed November 2, 2018.
- Mullard A. Biotech R&D spend jumps by more than 15%. Nature Review Drug Discovery. 2016:15. June 30, 2016.
- Dezzani L. Top 10 Global CROs 2018. IgeaHub Pharmaceutical Club website. Published March 15, 2018. Accessed November 2, 2018.
- Nimble Quotes page. BrainyQuote website. Accessed November 2, 2018.