As this issue was going to press, news was percolating about Valeant Pharma reformulating its bid for Allergan as a hostile takeover (since the Allergan management had refused to negotiate with the potential buyer); and Merck ponying up $3.8 billion to acquire Idenix Pharmaceuticals, doubling down on the hepatitis C market, where it has existing products to which Idenix can be added. Meanwhile, generics giant Teva made its own headlines with a planned shuttering of as many as three dozen plants—around half of its worldwide manufacturing base—in a cost-cutting move.
Almost as a reflex, the sub-heading as announcements like these are made is that layoffs are coming, and callous or just clumsy industry managers are wreaking havoc with employees’ lives. And a subcontext to that is that the glory days of pharma are over and the “good old days” (whenever they might have been) are long gone. But, as our analysis on p. 20 demonstrates, employment in the industry, in the US, has been remarkably stable over the past 10+ years. Pharma manufacturing specifically has been nearly unchanged since 2001; employment declines in wholesaling and retailing have been offset by growth in biotechnology R&D. Given the growth in revenue and prescriptions dispensed over that period, our conclusion is: The pharmaceutical delivery system—from research to manufacturer to distributor—is running faster with roughly the same number of workers.
Make no mistake—there have been titanic shifts in employment, employers and job categories over the past decade or so. And there are a large number of former employees, especially of the Big Pharma pedigree, pounding the pavement looking for jobs. (And I’ll make a special call-out here to sales reps, whose profession is “dead,” “dying,” or “nearly extinct” according to recent headlines; notwithstanding the fact that there are more than 60,000 of them currently at work in the US, and the decline in that profession appears to be bottoming out.) Generally speaking, though, while layoffs generate headlines, hiring rarely does. The bad rap that the industry has in employment circles is self-inflicted.
Management consultants and other prognosticators relish the opportunity to promote themes like “industry evolution” and “turning points” at just about any given moment; we’ve just gone through the “patent cliff” phase and an “emerging markets” phase is still shaping up. I’ll leave it to those Big Thinkers to come up with the next catchphrase; but meanwhile, take heart that this industry is vibrant, has a bright future, and is amazingly durable.