Alex Philippidis Senior News Editor Genetic Engineering & Biotechnology News

Biopharma workforce cuts soar as consolidation, the patent cliff, and drug failures take their toll.

The overall U.S. economy may be limping back into shape, but the biopharma employment market appears to be another story, as continued consolidation and patent-cliff losses by big pharma have prompted drug and diagnostics companies to step up job reductions.

This month alone, Endo Health Solutions said it would shrink its workforce by 15% or about 700 jobs worldwide, while Aveo Oncology sliced 140 jobs or 62%. Aveo and Endo join at least 15 other biopharmas in announcing, disclosing, or confirming workforce reductions this year, according to a GEN spot check of company announcements, news reports, and regulatory filings.

U.S.-based employers revealed plans between January and May to cut 6,389 jobs—up nearly 27% from 5,042 jobs the same period last year, according to Challenger Gray & Christmas. The largest single job cutter of 2013 so far is U.K.-based AstraZeneca, where CEO Pascal Soriot announced plans in March to eliminate 3,900 positions—1,600 in R&D, 2,300 in selling, general, and administrative (SG&A) operations.

Pharma giants disclosing job cuts in 2013 through June 13 include Eli Lilly (1,000 sales reps), Baxter International (400 in Puerto Rico), Bristol-Myers Squibb (about 400 in San Diego), Novartis (300 jobs over two years in Lincoln, NE) and its Novartis Institutes for BioMedical Research (about 120 in Fort Worth, TX), and Roche (170 jobs in the U.S. and Germany).

The sobering numbers reverse last year’s encouraging trend, when the number of announced job cuts by U.S.-based employers fell more than one-third to 14,150 jobs from 21,580 jobs in 2011. That year, Challenger Gray & Christmas calculated that 297,650 biopharma jobs were lost between 2000 and 2010, when consolidations and layoffs began reshaping the industry.

Since then, big pharma has continued to consolidate far-flung workforces, cut R&D, and slash salesforces as blockbusters leap off the patent cliff. By GEN’s count, the 15 job-cutting employers have revealed they’ll shed a combined nearly 7,800 positions. That number includes both big pharma and smaller biotechs such as Alkermes (130 jobs in Ireland), Mylan (nearly 120 from Basking Ridge, NJ, to near its Pittsburgh headquarters), and Impax Laboratories (about 110 jobs).

A New World

Those biotechs are unlikely to make up for the jobs being slashed by big pharma for several reasons. One is that they’re being pressured by risk-averse investors to pull the trigger on layoffs, often after clinical or regulatory failure. They don’t need the glut of researchers being downsized out of pharma giants because they’re cutting R&D. Even if they needed those researchers, biotechs don’t have the money to offer pharma-sized compensation.

“We need more scientists in development, people that understand pharmacokinetics, pharmacodynamics, toxicology, pharmacology, process development, process chemistry, biomanufacturing, those kinds of people,” Clifford S. Mintz, Ph.D., founder of BioInsights, a biopharmaceutical education and training organization, tells GEN.

Those professionals, he said, are a better fit with biopharmas’ shift away from research and toward drug development and commercialization. The shift also reduces the need for salespeople, given fewer blockbusters and tightening regulation on how reps can sell drugs to doctors.

Unfortunately for industry, much of academia hasn’t responded to the change. “The Ph.D.s that are being trained at academic institutions are being trained to do discovery research. The amount of people you need these days to do basic R&D is so small,” adds Dr. Mintz, who follows biopharma employment news and trends as publisher of BioJobsBlog. “I think we’ve entered into a new world.”

As a result, many of the senior researchers losing their jobs will find it difficult to land similar positions, let alone similar positions at comparable pay. According to the U.S. Bureau of Labor Statistics (BLS), the median salary for medical scientists was $76,700 in 2010, while biochemists and biophysicists earned a median $79,390 ($81,791.50 and $84,660.07, respectively, in today’s dollars as projected by BLS’ inflation calculator).

“If you’ve got two or three years of pharmaceutical experience, and you’re in an area where there are smaller biotech companies, or you’re willing to relocate, or you’re willing to work outside the United States, you could find positions because experienced R&D scientists, in terms of the biotech industry, are valuable,” Dr. Mintz says.

Also valuable to industry are professionals with business as well as research skills—not only Ph.D.s and candidates, but bachelor’s and masters’ degrees commanding lower pay: “They fare a lot better as research techs or doing quasi-research or quasi-project management, manufacturing stuff, quality control, quality assurance. Those people are easily retrainable,” he adds.

“If you’re a straight-up discovery research scientist, and all you’ve done is work in discovery labs for most of your career, you may be out of work for a while,” Dr. Mintz cautions. “But if you’re a Ph.D.—or even not a Ph.D.—with experience in business development, regulatory affairs, project management, medical writing, those kind of things, those people can find employment pretty quickly at the end of the day.”

Help Wanted: Regulatory Affairs, Bioinformatics

Regulatory affairs pros are especially sought after given FDA’s shift starting in 2007 to risk-benefit analysis for evaluating new drugs, followed by last year’s FDA Safety and Innovation Act (FDASIA).

“Certainly regulatory specialists are needed. It is definitely a skill that we have to look for quite often, with the changes there. Someone who can deal with the FDA is always in need,” Barbara Gebhardt, president and CEO of life science staffing agency Opus Scientific and its nonbiotech counterpart, Opus Staffing, tells GEN.

Also remaining in demand are bioinformaticians: “With the emphasis on patient outcomes, and even just for the company to maintain good data to stay agile, bioinformatics is an area where we’re seeing some growth,” adds Gebhardt, author of The Essential Career Guide for the Scientific Professional.

She says displaced workers can position themselves better for new jobs by learning new skills and networking, particularly in smaller groups focused on a niche field where they can stand out.

Both Gebhardt and Dr. Mintz foresee fewer layoffs next year, when the patent cliff is finally expected to peak and pharma giants are imagined to stop consolidating.

But several additional significant job reductions are in the works.

Merck KGaA plans to chop 1,100 German jobs by 2015. Indian news reports, citing unnamed sources, say Ranbaxy plans to cut its salesforce of about 14,600 by one-third (eliminating around 4,867 jobs). Patent-cliff losses expected for TriCor, TriLipix, and Niaspan may cost several hundred AbbVie sales reps their jobs, though the company has declined to comment on a Bloomberg news report that said as much. And corporate cost-cutting goals—$2 billion at Teva; £1 billion (about $1.6 billion) annually through 2016 at GlaxoSmithKline—may bring pink slips to more employees yet.

Even if only some of these layoffs happen, they will likely further swell the ranks of unemployed biopharma professionals, especially investigators, forcing many to scramble for academic or nonprofit research institute jobs. Such prospective reductions-in-force are in addition to those that can be expected from biopharmas forced to contract due to clinical or regulatory failures. And with the industry increasingly carrying out more work through cheaper labor overseas, it’s safe to say those who lose jobs in the near future will find it harder to land back on their feet in biopharma.

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