It’s the Holiday Season: Time for More Job Cuts in Pharma

Posted in BioBusiness, BioJobBuzz

While the holiday season (beginning on Thanksgiving) is supposed to be joyous, it is usually the time of year that many life sciences and other large corporations announce job cuts. As expected, two companies, Mylan and Lilly announced today that they will be cutting the size of their work forces and laying off employee.

Mylan, whose CEO was forced to appear before Congressional committees because of the company’s egregiously high price it was charging for EpiPens, announced that it may lay off of as many as 3,500 workers. The reason for the layoffs was to “reduce redundancy” that resulted from Mylan’s $5.3 billion acquisition of Abbott Laboratories generic drug business, the $7 billion it paid to purchase the Swedish drugmaker Meda and the $1.0 billion for several topical skin medications from Renaissance Holdings. The layoffs will purportedly impact less than 10% of Mylan’s global workforce and help to cut costs and refocus operations at the generic drug manufacturer.

Likewise, troubled pharmaceutical manufacturer Lilly, whose CEO abruptly retired earlier this year announced that it was trimming its US pharmaceutical sales force. The announced cuts were related to the recent Phase 3 failure of the company’s Alzheimer’s project solanezumab. A company spokesperson did not disclose the number of sales representative who would lose their jobs.

Finally, this past September, the Danish company  Novo Nordisk, a world leader in the diabetes market, announced it would layoff 1,000 employees worldwide to cut costs and focus it efforts on developing “truly innovative” diabetes products.  Meanwhile, behind the scenes, speculation suggests that the layoffs are in response to payer pressures that are being brought to bear in the US, the company’s largest market.  Many of the cuts are expected in R&D where innovation has been lacking according to company executives.

Although these jobs cuts are taking place, the good news is that these workforce reductions are smaller than those announced in holiday seasons past!

Until next time

Good Luck and Good Job Hunting

 

Pharma and Social Media: Lilly Launches A YouTube Channel

Posted in Social Media

Mark Senak, author of the outstanding EyeonFDA blog, tweeted today, that Eli Lilly & Co had launched a YouTube Channel. According to a post on the company’s blog Lilly Pad, its new channel dubbed the “Lilly Health Channel” will “videos on health and wellness, employee and community outreach efforts, health innovation, Lilly programs and other non-product-branded initiatives.”

While the announcement of a launch of another pharma-sponsored YouTube channel is no longer new or novel, Eli Lilly has been trying to transform itself into a modern, social media and crowdsourcing-focused pharmaceutical company. For example, Lilly is one of only a handful of big pharma companies that sponsors its own corporate blog. Moreover, the company is a leader in using so-called crowdsourcing to discover and develop potential new drugs. It has spun off at least two ventures that utilize a crowdsourcing approach to new drug discovery. Finally, unlike most other big pharma CEOs, its chief executive John Lechleiter has been outspoken about the lack of innovation and available workforce talent in the US life sciences industry. 

Is Lilly truly the pharmaceutical company of the future? That remains to be seen! 

Until next time… 

Good Luck and Good Viewing!!!!

 

Are US Immigration Laws Really Hurting Life Science Innovation?

Posted in BioBusiness

A report in Bloomberg News today suggested that Eli Lilly & Co. Chief Executive Officer John Lechleiter, PhD told a technology conference today that unfavorable US permanent resident (green card) laws are to blame for declining US innovation in the life sciences. With this in mind, Lechleiter plans on calling for US immigration officials to issue more green cards and adopt a shorter and simpler process for highly skilled foreign nationals to gain permanent residence in the US. According to Dr. Lechleiter, one of only a handful of big pharma CEO who is also a PhD-trained scientist, current green card regulations are so-called job killers and force many talented foreign nationals to return to their native countries to work with firms that directly compete with American life sciences companies. Unlike most of his peers, Lechleiter has been very outspoken about the lack of US life sciences innovation.

While Lechleiter comments may have been appropriate five or more years ago, they are no longer germane to America’s waning innovation in the life sciences. There is little doubt that many bright and talented foreign nationals were denied permanent residency during the Bush era (2000 to 2008) because of stringent immigration policies and limits on the numbers of green cards allotted for persons from certain parts of the world; mainly China, India and the Middle East. This, in turn, forced many life scientists—many of whom desperately wanted permanent residency in the US—to return to their home countries to look for work and gainful employment.

As Lechleiter rightly asserts, these scientists found work with companies that began to directly compete with US life sciences. This phenomenon, coupled with the rapid assent of the middle class in many of these nations, made it possible to begin to conduct Western style research at a much lower costs in these countries. To that end, by 2007, most big pharma companies—many of whom had dwindling pipelines and monstrous overhead costs—realized that it would be more cost effective to outsource or move R&D to countries with emerging pharmaceutical and biotechnology markets and a well trained R&D workforce. And, for the past four years downsizing and outsourcing of R&D are exactly what have been taking place at many American big pharma and biotechnology companies.

In my opinion, the larger question that must be addressed, as far as US innovation in the life sciences is concerned is: why are so few Americans willing to pursue scientific careers? To wit, the main reason why so many foreign life scientists were educated and trained in the US over the past 20 years was because there weren’t enough American students to fill the incoming roster at most American graduate training programs. Put simply, America’s growing lack of innovation in the life sciences over the past decade can be directly attributed to far fewer Americans pursuing scientific careers and an increased reliance on foreign nationals—who were unable to stay in the US—to innovate! While changing US immigration laws may allow some foreign nationals to more easily remain in the US, there simply aren’t enough life sciences jobs left in the US to make it worth their while! In fact, the likelihood of them finding life sciences jobs in their home countries is now greater than it is in the US. In my opinion, the only way to restore American innovation in the life sciences is to convince American students that pursuing scientific careers is worthwhile and that the requisite training for industry jobs is available to them.

Interestingly, after leading with changes to US immigration laws, Lechleiter also suggested that America’s innovation problem could be solved by lowering US corporate tax rates and American companies should not be forced to pay taxes on oversea earnings. Also, he asserted that the US Food and Drug Administration (FDA) should stop putting off decisions or erring on the side of avoiding risk when considering new drug applications. 

This begs the questions, how do lower taxes, no overseas taxes and expedited drug approvals help to spur American innovation when most life sciences R&D is conducted outside of the US?

Until next time…

Good Luck and Good Innovating!!!!!!!!

 

Pharmaceutical R&D Continues Its Eastward Migration

Posted in BioBusiness

For the past three years or so, Eli Lilly CEO John Lechleiter has publicly criticized America’s lack of math, science and engineering preparedness. Further, he has lamented that this lack of preparedness has resulted in a lack of innovation and that it threatens the US standing as a leader in the pharmaceutical and biotechnology industries. Finally, Lechleiter squarely places the blame on American science educators. 

Therefore, it came as somewhat of surprise to me when I learned that Lilly (and many other pharmaceutical companies) are outsourcing an increasing amounts of drug discovery and development to Chinese contract research organizations (CROs pharma companies continue to outsource drug R&D to ostensibly lower development costs and get drugs to market faster. According to Chuan “Joe” Shih, a former Eli Lilly employee of 25 years and executive vice president of integrated drug discovery at Crown Bioscience a Shanghai-based CRO, the total annual cost for one researcher at Lilly might run $300,000 to $350,000 a year. The figure at Crown is one-third of that. Shih also disclosed that Pfizer was one of Crown’s clients.

In addition to Crown, Eli Lilly has outsourced R&D to other Chinese CROs that includeWuXi AppTec and ChemExplorer. It also operates its own research-and-development center in Shanghai and is building a diabetes research center here. Like Lilly, big pharma companies like Roche, Novartis and others have also established research centers in China.

Some analysts contend that the reasons given for the current R&D outsourcing trends—lower costs and faster market times—are red herrings. They suggest that establishing R&D in China helps position companies to sell into the huge, emerging Chinese market. Within the next decade or so, the Chinese market may eclipse the US as the major pharmaceutical market in the world.

Interestingly, in an interview in Shanghai Lilly’s Lechleiter said that he believed that CROs in China have more to offer than cost savings. “The skill level and the quality and the increasing availability of high-skilled and high-quality operations in the contract-research space render these firms globally competitive,” he said. Further, he added that in recent years, Lilly has had difficulty getting green cards or permanent resident visas for some of the Chinese people graduating from American universities it wants to hire. “So we need to follow the talent, and I expect there will be people recruited to the U.S. who will want to stay in the U.S. And there will be Chinese people and others who want to come back here. Our research center in Shanghai gives them a place to land.”

Does this mean that Lechleiter has given up on his quest to improve American science preparedness and American innovation? And, what will become of the 100,000 or so American pharmaceutical scientists who were laid off in recent years or those new minted American PhDs who cannot find work in the US? Is that the fault of the American education system or pharmaceutical companies that are trying to maintain profit margins at any cost or improving the likelihood of success in emerging markets in developing nations?

Until next time…

Good Look and Good Job Hunting (try the BRIC countries)

 

Lilly Shows More Sales Reps the Door

Posted in BioJobBuzz

Eli Lilly and Co. announced last Thursday that it plans on cutting 200 sales and marketing support jobs in its U.S. biomedicine group. More than half of those cuts will take place in Indianapolis, the corporate headquarters of the company. The cuts are the latest wave of the drugmaker’s previously announced plans to chop 5,500 jobs worldwide by the end of 2011. The layoffs will be the largest since Lilly eliminated 200 jobs from its research laboratories in March.

Big pharmaceutical companies have been laying off marketing and sales reps for the past three years or so in response to lack of newly approved drugs and anticipated revenue losses from blockbuster drugs that are nearing patent expiry. According to a recent survey conducted by SDI Health the number of pharmaceutical sales reps has shrunk to roughly 81,780 in last year’s third quarter from 101,818 in 2005: a nearly 20 per cent. Further a recent post on the Pharmalot blog revealed that “last year, the number of docs willing to see most reps fell nearly 20 percent, the number of prescribers refusing to see most reps increased by half and the number of management-planned sales calls that were nearly impossible to complete topped 8 million” according to ZS Associates, which monitored interactions involving 500,000 physicians nationwide.

Declining revenues from brand name prescription drugs combined with the changing attitudes of physicians to sales reps suggest that marketing and sales jobs in the pharmaceutical industry may become scare in the future. However, as the biotechnology continues to mature, the need for sales reps with backgrounds in molecular biology and protein-based drugs will continue to increase.

While most physicians are very familiar and comfortable with small molecule prescription drugs, their understanding and familiarity with biotechnology drugs is surprisingly deficient. This suggests that PhD-trained life scientists, who are outgoing and don’t have problems “selling”, may want to consider careers in biotechnology sales or marketing.

Until next time…

Good Luck and Good Job Hunting!!!!!!!!!!

 

 

Bristol-Myers Squibb to Buy Monoclonal Antibody Maker Medarex

Posted in BioBusiness

Bristol-Myers Squibb (BMS) announced late yesterday that it intends to purchase Princeton, NJ-based Medarex for $2.1 billion. BMS and Medarex were working collaboratively to develop a monoclonal antibody called Ipilimumab as a treatment for late stage melanoma.

The acquisition represents BMS’s public commitment to transform itself into a “next generation pharmaceutical company” with both pharmaceutical and biotechnology products in its arsenal. Last year, BMS bought Kosan Biosciences, Inc a California-based biotechnology company developing novel cancer treatments. Also, as you may recall, BMS lost ImClone to Lilly in a bidding war over Erbitux—a monoclonal antibody-based colorectal cancer treatment that was co-marketed by BMS. 

Medarex was one of the last independent, public, late stage monoclonal antibody development companies in the biotechnology industry. Many of its competitors, like ImClone and Cambridge Antibody Technologies, had already been acquired by big pharma and I was wondering when Medarex would be acquired. I have always held Medarex in high regard and it is a solid and well position company. To that end, I recommended that my mother purchase Medarex stock several years ago telling her that I thought it had a huge upside. Not surprisingly, the stock has been soaring since the announcement; so much so that my mother called me today to tell me how smart I was—go figure.

It is not clear, at present, what effect, if any, the Medarex acquisition will have on the employment situation in New Jersey. Although BMS is headquartered in NYC, it has two large sites in New Jersey, one in Lawrenceville and the other in Plainsboro. As mentioned above Medarex is based in Princeton, NJ. BMS has been steadily downsizing over the past three years and I suspect that there may be more layoffs after the Medarex deal closes.  If there are layoffs, more are likely to occur on the Medarex side of the business.

While I have been critical of some of BMS’ strategic moves in the past, I think the Medarex acquisition is an outstanding one and BMS will likely benefit from it!

Until next time…

Good Luck and Good Job Hunting!!!

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Eli Lilly & Co Vows to Fight US Legislation That Allows Importation of Lower-Priced Prescription Drugs

Posted in Career Advice

As the cost of prescription drugs continues to spiral upward, the affordability and accessibility to prescription drugs and healthcare will likely be fiercely debated and may influence the outcome of the presidential election next November. Despite growing public concern over the cost of prescription drugs in the US, Eli Lilly has vowed to fight federal legislation that will allow Americans to import lower-priced prescription drugs from Canada, Japan, Australia and many European nations. Lilly spokespeople and their lobbyists in Washington DC argue that the policy would put consumers at huge risk of consuming dangerous and unsafe counterfeit drugs. Big pharma has been using the drug safety argument for the past decade or so to stifle drug importation legislation. That said, blocking prescription drug importation legislation has very little to do with drug safety and everything to do with profit margins and corporate stock prices.

The stakes of prescription drug importation are high for drug makers. In contrast with the US, most other countries keep drug prices low through government distribution programs and strict price controls. Because the US government does not control prescription drug prices, American typically pay two-thirds more than Canadians, 80% more than Germans and 100 per cent more than French residents for identical prescription drugs. Lilly and other big pharma companies contend that price controls for prescription drugs stifle innovation and competition (tell that to the European and Japanese drug companies). Currently, according to government and industry surveillance data only a tiny fraction of counterfeit drugs (about 5 per cent) actually enter the US market. But Lilly and other pharmaceutical companies argue that there could be enormous increases in the number of counterfeit drugs that enter the US annually if Congress relaxes the federal ban on imported prescription drugs.

Pharma’s counterfeit drug argument is a convenient scare tactic that it has been using to lobby against relaxing current drug importation legislation. What the drug makers don’t tell you is that they routinely import and sell drugs in America that are manufactured in foreign production facilities. Further, many of drugs that are sold in Canada, Europe, Japan and Australia are manufactured in the same production facilities that supply drugs that are sold in the US. This begs the question —if drugs are manufactured in the same foreign production facilities and one lot is sold in the US and the other in Canada, would American consumers really be at a greater risk if they bought a Company’s drug in Canada or the US? The answer to the question is a resounding NO–unless you believe that the Canadian Regulatory Agency is less competent at monitoring and approving drugs than the US FDA The real story is this–.counterfeiters stand to make much more money selling bogus prescription drugs in the US than in other countries because there are no price controls in the US (which means much larger profit margins for the counterfeiters–duh!)

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Inhalable Insulin: Not Worth the Effort?

Posted in Career Advice

The Danish drug maker Novo Nordisk announced today that it was halting further clinical development of its inhalable insulin product called AERx. AERx was in Phase 3 clinical testing as a short-term diabetes treatment. In a press release the company stated that it was halting development of its inhaled insulin compound because the drug was "unlikely to offer significant clinical or convenience benefits" versus current diabetes treatments.” AERx joins Exubera (Nektar Therapeutics/ Pfizer) on the inhalable insulin scrap heap. This leavesEli Lilly and Alkermes’ IR insulin system as the only inhalable short-acting diabetes treatment in Phase 3 clinical development.

Interestingly, Novo didn’t say that it was giving up on developing inhalable insulins— only that it was halting its current late-stage AERx program. The company did announce that it plans to pursue a Glucagon_Like Protein (GLP-1) inhalable diabetes treatment which is similar to a product being developed by California-based MannKind. Its product in Phase 1 clinical testing. Unlike Nektar, which partnered with Pfizer to develop Exubera, MannKind, a small startup, is developing its inhalable insulin product alone. Novo also disclosed plans to develop a longer-acting injectable form of insulin which would eliminate the need for daily injections by patients with diabetes.

In theory, inhalable insulins make sense—many people hate daily injections. That said, inhalable insulins may create other problems that obviate their usefulness as alternatives to daily insulin injections-just ask Pfizer and Nektar about that!

Until next time….

Good Luck and Good Job Hunting!!!!!!!!!!

Political Intrigue at 3 Big Pharma Companies

Posted in Career Advice

The New York times reported today that Britain’s Serious Fraud Office has demanded documents from GlaxoSmithKline, Astra Zeneca and a British affiliate of Eli Lilly & Company in connections with allegations that the companies paid bribes to secure lucrative drug contracts in Iraq while Saddam Hussein was in power. The 3 companies are accused of violating the United Nations’ oil-for-food program that was instituted in post war Iraq in the 1990s.

A report from the fraud office in 2005 accused some 2,200 companies from 40 countries of colluding with the Hussein regime to cheat the UN program out of about $1.8 billion. As I have stated time and time again, drug companies are no different than other companies–profits and stock prices always come before ethics, morality and sometimes the law!

Until next time….

Good Luck and Good Job Hunting!!!!

Happy Thanksgiving–Pharmaceutical Companies are Cutting Jobs and Closing Manufacturing Facilities in Puerto Rico

Posted in BioJobBuzz

Pfizer said on Tuesday it will eliminate another 40 workers from factories in Puerto Rico. Pfizer closed a plant in Arecibo, Puerto Rico in 2005 and last year announced 210 layoffs in the U.S. Caribbean island territory

As pointed out by Ed Silverman over at Pharmalot, Puerto Rico has long been a manufacturing hub for US pharmaceutical companies. Over the past 30 years, pharmaceutical manufacturing has accounted for a quarter of the island’s gross domestic product and currently employs about 20,000 Puerto Rican citizens.

Over the past few years, companies like Watson Pharmaceuticals (generics), GlaxoSmithKline, Teva (generics), Bristol Myers Squibb and Schering Plough have either closed or will close manufacturing facilities on the Island. These closings were somewhat surprising because the Puerto Rican workforce is one of the best pharmaceutical manufacturing workforces in the world. That said, US pharmaceutical companies are looking elsewhere to produce their drugs because of rising wages, changing tax structures and the high cost of electricity (supplied by oil-fired power plants) on the island. Further, over the past decade, there have been ongoing compliance and quality assurance problems at many of the shuttered manufacturing facilities. Officials from these companies explained that it was less costly to shut down and move operations elsewhere rather than modernize the plants and bring them into regulatory compliance.

Despite these recent facility closings, the island’s pharmaceutical manufacturing industry still produces 13 of 20 best selling drugs in the US. However that number will likely continue to dwindle over the next few years. Many companies that have closed or are considering closing production facilities are moving operations to Asian destinations like Singapore, China, Thailand (and even Vietnam) where there are trained workforces, lower wages and cost structures and many people speak English.

Unlike most pharmaceutical companies, Amgen, Abbot and Lilly recently built or relocated biomanufacturing operations to Puerto Rico. Because of a trained workforce and Puerto Rico’s ongoing familiarity with FDA regulatory requirements, I suspect that other biotechnology and specialty pharmaceutical companies will consider establishing biomanufacturing facilities in Puerto Rico– pharma’s loss may well be biotech’s gain!!!!

Until next time….

Good Luck and Good Job Hunting!!!!!!!!!