Trends in the Pharmaceutical industry
Posted by The Editors on August 23, 2012
Pharmaceutical companies make medicines from plant- and chemical-based compounds. They work to prevent the spread of disease, ease pain, cure illnesses, and slow the effects of aging, among many other things. Pharmaceutical companies' mission to discover the next groundbreaking medicine is a big cause steeped in big bucks, big competition, and, at times, big controversy. Insiders refer to the handful of multinational giants that dominate the industry-Pfizer and GlaxoSmithKline, to name two of the largest-as Big Pharma. Many firms also produce animal health products, livestock feed supplements, vitamins, and a host of other goods. The majority of Big Pharma companies are headquartered in the United States, but several are based in Western Europe-specifically the United Kingdom, Switzerland, Germany, and France. Most pharma companies headquartered in the United States are located east of the Mississippi, with the greatest concentration in New Jersey. Depending on their size and strategy, pharmaceutical companies conduct extensive in-house research or may seek to license promising drugs from academia, other pharmaceutical firms, or biotechnology companies. The latter are generally smaller than their Big Pharma competitors, and employ cellular and biomolecular processes to make medicines or diagnose illness. Growth at a Price: Pharmaceuticals is one of the world's most profitable industries. During the last 30 years, the industry has spent billions of dollars on research and reaped billions in return. In 2008 alone, the pharmaceutical industry sold $773 billion in products worldwide-a number that has consistently grown for the past 8 years and is projected to increase again by 2.5 to 3.5 percent in 2009, according to the drug market research firm IMS Health. But the process that turns research dollars into medicines is a slow and often arduous one. It now takes an average of 12 to 15 years and up to $1.7 billion for a drug to go from discovery to market, according to The Pharmaceutical Research and Manufacturers of America. And despite all the time and money invested, only a handful of drugs are approved by the FDA each year. The arduous drug approval process reveals a central fact about Big Pharma: it's one of the most intensely regulated industries in the world. The U.S. Food and Drug Administration (FDA) and its European Union counterpart, the European Medicines Agency (EMEA), govern every aspect of a drug's development-from chemicals used in the drug and clinical study instructions, called protocols, to packaging components and marketing materials. This strict oversight is meant to protect patient safety, and pharma companies take regulatory oversight seriously. The constant pressure to adhere to government mandates shapes every aspect of a pharma firm's organization, operations, and culture. For example, drug companies maintain powerful regulatory affairs divisions-the departments that deal with government agencies-and they tend to be risk-averse. Job Outlook There will always be a need for pharmaceuticals, and the industry has been expanding worldwide. Several factors could negatively affect the industry in the near future, however, including healthcare reform, expiring drug patents resulting in less expensive generics on the market, and rising research and development costs and regulations. Economic troubles in 2008 led to several acquisitions of smaller companies by several large drug companies, which resulted in the announcement of some major layoffs. In 2009, Merck took over Schering-Plough and predicted that 15 percent of its workforce would be cut, and Pfizer bought Wyeth in a move that could eliminate nearly 20,000 jobs. Industry experts predict the cost cutting will continue, meaning that non-essential administrative and sales positions in the industry may be harder to come by. Science- and engineering-related positions, however, will most likely remain in high demand. In terms of sales positions, recent growth has resulted in increased competition. The problem seems to be that too many sales reps are competing for physicians' attention. In the past decade, the number of U.S. pharmaceutical sales reps has tripled while the number of physicians has grown little in comparison. And the product pipeline is generating more specialty products and fewer mainstream blockbuster drugs, leading Big Pharma to shift its sales focus from primary care physicians to the less numerous specialist physicians (such as oncologists) who are the gatekeepers for dispensing specialty drugs. As specialty selling increases, reps with science degrees will likely be in high demand. Job requirements for science positions have become more stringent as well due to higher numbers of applicants. Internship experience, advanced or specialized degrees, and proven communications and leadership skills will definitely make you a more appealing candidate. While a graduate degree isn't required to land a job, it allows greater flexibility in the job market. Another industry trend is the move toward using the Internet and other technologies to provide interactive marketing and direct-to-patient education. Consequently, people with Internet marketing experience may find extended opportunities in Big Pharma.