Thursday, February 5, 2009

Pharm Job Losses - "Don't You Just Want to Punch The Economy In the Face?"

Pharmaceutical Industry Job losses mounting in wake of mergers and acquisitions and of course the economic down-turn….

Like the E-trade baby says “Don’t you just want to punch the economy in the face!”….

With the Pfizer buyout of Wyeth last week and the potential loss of approximately 8,000 jobs immediately but with as many as 20,000 jobs lost when the dust settles. Pfizer was in a bit of desperation as they try to find ways of making up for the potential loss of 13 billion dollars when Lipitor goes generic in 2011.

More job losses with the announcement coming from GSK adding to the 10,000 jobs already cut. GSK are announcing major net income drops for the fourth quarter with at least 1 – 1.5 billion as a result of legal issues stemming from illegal marketing and sales investigations dating from 1997. To add to their woes, four of their top selling drugs : Wellbutrin XL and Paxil CR, the anti-depressants, the Imitrex migraine pill and Lamictal, the epilepsy drug, all faced generic competition in the US last year.

Over at King Pharmaceuticals, announcement just today that approximately 760 jobs will be cut, 240 of the jobs being cut are a result of their acquisition of another drug company, Alphapharma.

Allergan is announcing about 460 jobs cut, this will mostly impact the US Urology sales force as well as marketing personnel in their US and European operations.

Sepracor, said late last week it was cutting 20% of its staff - or around 530 jobs - in a bid to save $210 million in operating expenses through to the end of 2009. Once again the salesforce bore the brunt, with 350 jobs going. The remaining 180 positions are corporate staff.

Abbot is set to cut another 200 sales jobs as a direct result of failure to get FDA approval for the slow release version of their painkiller Vicodin.

The trend through out the economy is disturbing, so we all need to hold on, the ride just keeps getting bumpier….


  1. As folks know keenly in Michigan (and other places), many of the cuts in pharma came well before the current economic crash. In those days, the discussion was focused mainly on whether the business model that served the industry well for many years would remain viable.

    Is that still a discussion worth having? Is is time to punch the economy or think about how we got here - both in general and specifically?

  2. The one thing I can say about all the pharma layoffs: Severence packages are pretty good. 6-12 months is typical from what I've seen. I'm hoping if I get axed that I can hang on until the economy improves a bit in 2010 (?). In general, the pharma industry doesn't appear to have a bright future. I've heard many analyst speculate that the industry really needs to shrink about about 50% based on the reduced profits expected over the coming years. That means a lot more layoffs ahead... Many of my collegues are planning to just leave the industry altogether if they get let go this time around. The bad thing with these layoffs is that they tend to disporportionally hit those with the most experience. If you've had 15-20 years of experience, nobody wants you unless you are an executive.

  3. Hey J.I.M.

    I think it is a bit of both, but clearly we are paying our dues for un-necessary greed, er is greed ever necessary?

    We really need to do something about health care in general. We have to get back to really fixing, curing disease. There could be some great potential for growth in the research sector. It is time for some people sitting on some projects (you know who you are) to pick them up, blow off the dust, this IS the rainy day.

    There is also some great opportunity to figure out how to get these drugs to the people who need them, when they need and making sure they can afford to adhere to them, consistently!

    There is also lots of room for educational programs aimed more at prevention of disease. We know what and how to go about stemming the incidences of diabetes. We know that smoking kills, we know what pesticides and pollution does to our food and water supply.

    But getting back to the industry specifically.... The new guidelines for pharma will actually pare down the marketing and sales budgets, which will offer great potential for cost savings, if managed correctly. In marketing, as in sales, if the product does what it is supposed to do, especially if it is something that can really improve the quality of life for people, then the sales will follow, it doesn't really matter how you get the word out - product performance will speak for it self.

    Making the drugs and treatments affordable also reduces the cost of drug access programs.

    With so many people loosing their jobs, health care benefit programs become marginalized. People will seek ways to reduce their cholesterol, monitor their blood pressure, by going on that diet (finally!), or trying vitamins and "natural" supplements. Some of this can obviously do more harm then good, which of course could put a stress on the system even further.

    People in general need help in developing skills with how to cope with the trials and tribulations of life in appropriate ways. Modifying their expectations, developing techniques for coping with stress. Here is a great opportunity for folks loosing their jobs to be retrained into life coaches, take on a few clients.

    We all have to really start listening to one another and get to know our neighbors. There was a study done in a Pennsylvania town (I think), the results showed that everyone in this town lived longer, got sick less. They thought it was something genetic, most of the people were Italian immigrants. It wasn't genetic at all, it was that this town had a good community spirit, everyone knew everyone and everyone helped everyone.

    Times are tough, but it is the best time to reinvent yourself.

    The Pharma industry has an exciting opportunity to show some great leadership here - now lets just see if they are up to the challenge!

  4. For Nathan - Yes, I heard that re: severance from friends at Pfizer who were here. Some went to CT and lost jobs again. Really sad.

    You know the usual list - pipeline, blockbuster model no longer workable, big companies (Pfizer) buying up biotechs in hope of keeping it going, etc. I think what you said about a guaranteed period of exclusivity makes good sense on all sides.

    In general, I'm not an "adversity creates innovation" person. It certainly never did in the auto industry. Nor, on a social level, that anything much change culturally after 9/11 despite all sorts of predictions that it would.

    In terms of health and longevity, income and the sense of actual/felt social power (e.g., not relative helplessness) is by far the strongest social predictor. It trumps community, social ties, access to care, diet and exercise, etc. when all these conntrolled. That's, of course, on a personal level. For the industry, it does seem that some kind of leaner and more directed version will be the way - again, as the auto industry will have little choice.

  5. J.I.M.

    It is a bit of the chicken and egg thing. I would say that income, sense of actual/felt social power etc. can be better cultivated in stronger familiar communities. Children who come from attentive families are more secure to go out in the world (usually).

    We all want more money, yet we all can't afford to pay more for it....

  6. FPME,
    I will (again) take issue with your assertion that somehow pharma is favoring long-term treatment of disease rather than cure of disease. That is just nonsense. Market forces alone would guarantee that if anyone had a cure for diabetes, cancer, atherosclerosis, psychosis, MS, CF, and Alzheimer’s, the financial reward would be **HUGE**. Companies could charge really big $$$ for the cure and there would be really big public demand. We don't have it. In most of the diseases I mention, true "cures" can only arise via gene therapy. The disease arises from your genetics -- and there's really no "cure" other than to replace your genes.

    That said, many pharma companies are starting to look into RNA based therapies, which are a bridge towards real gene therapy.

  7. This is a stimulating exchange. I just returned from a personal medical consult about a condition in which gene-based therapy appears to be making real strides. As I think Nathan suggests, it is not about changing genes, but understanding better what specific genes are actually doing physiologically in far more detailed ways than earlier. This opens up the possibilities - some more than just theoretic - of finding ways to intervene in the physiological cascade to create different outcomes.

    Aside from Merck, which still does a good deal of in-house research, my impression is that most of the large companies are going to "specialist" biotechs for this kind stuff, Pfizer being the most popular example. Does that seem generally correct?

  8. Nathan,

    Surely you could have guessed by now that when I say something, I have first hand knowledge of it.

    I know quite a lot about genes, gene therapies, and epigentics. Epigenetics is a fascinating area of research because it shows how there are some drugs available today that can alter your epigenome...

    Goggle, Epigenetics and look specifically at the Nova documentary on it.

    Anyway, the good news about all this is that we are altering our genes with toxic food and stuff in our environments (especially over processed foods). If we can alter them in a bad way, evidently we can alter them back...

    As for companies charging really big sums of money - guess again. I think we are hearing the death knoll on that sort of thinking. From a purely ethical point of view, who can and should pay all that money? For example there is a company that actually is trying to charge $500,000 per year for a drug treatment that will only impact a few people. The charge is so exorbitantly high, that we now find ourselves placed in the difficult task of saying, sorry we can't afford to cover this. You either find a way to bring it to market cheaper, or these people continue to die.

    This is a fact, this is an actual case, but I am not at liberty to provide more details, so don't bother asking....

    RNA therapy that you mention sounds interesting. Stem cell research aims at cures by shutting down the malignant stem cell, not just putting a band aid over it...

    But as you point out many researchers are interested in finding drugable targets that slow the progression of the disease, it isn't a bad starting point, but it is only a temporary fix...

  9. Justice, gene therapy is incredibly risky at this point. Several big pharma companies (including my own) have inlicenced or purchased small companies that specialize in this area. RNA-interferance (RNAi) is a really interesting one. But, even these technologies generally "knock down" or "knock out" an overactive biological function. The panacea of pharmaceuticals is to REPLACE (or enhance) biological function. This can be done with small molecules (nuclear hormone receptor modulators) but is very, very tricky. It's hard to know exactly what genes you are "turning on" with a small molecule. You could, inadvertently, be turning on processes that could cause unintended consequences. Alternatively, you could "deliver" a gene encoded to express a particular protein of interest. This is where the real "curative" potential exists. But, from my reading, this is probably decades away from real application. Stem cells have the possibility to do some of this, but only at a "macro" level. You can't correct a cellular defect with another cell. (think cystic fibrosis, for example)

    The more fundamental reality is that, for most diseases, we can't pinpoint the exact cause. Something like cystic fibrosis, in theory, should be simple. We understand the exact protein that is screwed up. But for most diseases, the "cause" seems to arise from many minor defects rather than one major one. In that case, a true "cure" may be impossible. Cronic symptomatic treatment is the only option.

  10. Great post, Nathan, thanks. Informative and realistic. Perhaps I am a victim of my own doc's hopefulness, who is also the primary investigator in this area, with lots of other people working toward the same end. But the situation is as you describe it for cf: they know the gene, they know the protein, but they don't (yet) know how to tell it to chill.

    So, as Former describes, the best we can do - which is certainly better than nothing - is make a few tackles; not win the game.

  11. Justice writes: "for cf: they know the gene, they know the protein, but they don't (yet) know how to tell it to chill."

    Actually, that's exactly the opposite of what I mean. The cause of cystic fibrosis is known to be a defective sodium ion pump. We (as medicinal chemists & pharmaceutical scientists) know exactly how to SHUT DOWN a pathway of interest. What we CANNOT do is to recapitulate, or upregulate, a missing or defective pathway. In short, we can block a biological function - but we cannot CREATE a biological function. The problem is that many diseases, especially genetically related diseases like CF, arise from an INACTIVE biological pathway. Since we can't artificially "restart" the pathway, the only alternative is try to treat the "symptoms" of the disease.

    You can see this very intuitively if you look at many of the common drugs on the market:
    Proton pump INHIBITORS
    Seratonin reuptake INHIBITORS

    All these drugs block a natural function in order to alleviate a symptom. The true (root) cause of most disease is a missing or defective function. RESTORING that function would be "curative". But we just can't do it. What we can do, in rare cases, by treating with a corrected version of the protein itself. (think hemophilia - we can treat with clotting factors. But that's only temporary because we cannot "train" the body to make it's own clotting factors -- we have to artificially engineer them, and then put them into the body on a regular basis)

    The only "true" hope of a cure for these devastating genetic diseases is gene therapy. But, again, this is decades away from reality.

  12. thanks, Nathan, fascinating stuff.

    Examples I was thinking of were diseases like Alzheheimer's or atherosclerosis. There, there is a "build-up" of substance X, and the therapeutic goal would be to stop that formation. But, based on what you're saying, it suggests that the build-up itself is because some "clearing mechanism" or "substance" or "function" is missing.


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