Pharmaceuticals and Biotech
“Well, it’s not like he’s curing cancer.” It’s an off-the-cuff comment that
is thrown around when people take their jobs too seriously. But what if you
really could cure cancer or other diseases? Or come up with new
technologies that could increase crop yields by 20 or 25 percent? That
might be a good reason to take your job very seriously.
Working with plant- and chemical-based compounds, pharmaceutical companies
work their mojo to make medicines that cure some diseases, manage others,
and protect us from infection in the first place. Big Pharma includes a
handful of major companies that dominate the industry. While many of these
firms also produce animal health products, livestock feed supplements,
vitamins, and a host of other goods, this profile will focus solely on
their drug products used to treat human illness.
Big Pharma 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 2006 alone, the pharmaceutical industry
introduced 31 major drugs and sold $643 billion in products worldwide—a 7
percent increase over 2005 sales, according to the drug market research
firm IMS Health. U.S. sales beat the national average with growth of 8.3
percent (up from 5.4 percent growth in 2005).
Depending on their size and strategy, pharma companies may conduct
extensive research in-house or they may seek to license promising drugs
from academia, other pharma firms, or biotechnology companies. The latter
firms are generally smaller than their Big Pharma competitors, and they
employ cellular and biomolecular processes to make medicines or diagnose
illness.
Biotechnology, a newer area, has alternately been the sweetheart and the
bane of investors in recent years. Simply put, biotechnology, the applied
knowledge of biology, seeks to duplicate or change the function of a living
cell so it will work in a more predictable and controllable way. The
biotechnology industry uses advances in genetics research to develop
products for human diseases and conditions. Several biotech companies also
use genetic technology to other ends, like the manipulation of crops.
Biotech opportunities largely mirror those in the pharmaceutical industry.
The key difference is that biotech firms are much more focused on research
because they are still developing their initial products. Biotech firms
tend to expand their marketing and sales forces when—and if—a viable
product nears FDA approval. And it’s become common for small companies to
seek alliances with larger companies that already have the requisite
infrastructure in place for these functions. This means that jobs for
nonscientists are scarcer in biotech than in pharmaceuticals.
Biotech and pharma have been performing exceedingly well relative to other
industries in recent years. And while there are problems lurking in the
shadows at some companies, overall the future looks bright for these
industries. Though there is plenty of public controversy (e.g., the moral
and ethical questions surrounding genomics and the pricing and patent
practices of Big Pharma), demand for drugs is growing, fueled by an aging
population and blossoming international markets. Regardless of whether you
choose to work for Big Pharma or small biotech, don’t get too attached to
the status quo. These days, the business environment can change overnight.
One need only look at recent biotech stock volatility for ample evidence of
that. And as one insider says, “Even in Big Pharma, if there’s a merger or
a spin-off, you can easily find yourself without a job.”
Pricing
Insiders say this may be the biggest issue the industry currently faces.
Who will pay the cost of drug development? As more treatments become
available, will only the wealthy have access to them?
Prescription drug prices are rising annually, while insurers are getting
increasingly more stringent about which medications they’ll reimburse their
customers for. Exciting new drugs can cost thousands or even tens of
thousands of dollars per treatment. Providing price relief for seniors has
been an issue for several years. Many favor price controls to prevent costs
from skyrocketing, a move the pharmaceutical industry opposes.
Partnerships and Strategic Alliances
A growing number of Big Pharma companies are partnering in drug development
with innovation-rich biotech firms, or buying the firms outright. In 2006,
Big Pharma spent roughly $17 billion for more than 250 biotech deals, up
from 150 in 2003, according to venture capital firm Burrill & Company.
What is more, Big Pharma is increasingly looking to biotech to help it find
potential therapies for failed clinical compounds, a tactic called
“repositioning.” Pfizer’s blockbuster Viagra is one example of finding a
new use for a perceived failure: The well-known treatment for erectile
dysfunction began its run through the pipeline as an experimental heart
medication. Recently, Pfizer, Roche, and Eli Lilly all signed deals with
the tiny biotech firm Gene Logic to investigate their failed clinical
candidates in the hope of making their R&D programs more productive.
Biotech companies, especially those dealing with agriculture, are also
aligning with universities to maximize their research capabilities. Some
universities, like the University of Rochester in New York, are developing
centers and incubators that will give fledgling biotech companies the
resources they need to grow.
The Rise of Generics
When a drug goes “off patent,” other drug companies are free to sell
generic versions, chemically identical copies that typically cost much less
than the trademarked version. The patents on some of Big Pharma’s most
profitable drugs have expired in the past few years. Examples include
Merck’s Zocor, a cholesterol-lowering drug; Pfizer’s onetime blockbuster
Zoloft, used to alleviate depression; and Bristol-Myers Squibb’s
cholesterol reducer Pravachol. All of these drugs were targeted in 2006 by
Teva, the Israel-based generic pharmaceuticals manufacturer.
But as generic drug manufacturers have become more aggressive in their
sales and marketing efforts, producers of branded pharmaceuticals have
become more vigorous in defending their turf. Some Big Pharma companies
have acquired generic drug manufacturers, such as Novartis’s acquisition of
Eon and Hexal. Those additions, and the firm’s acquisition of biotech firm
Chiron, are part of Novartis’s strategy of becoming a “one-stop shop” for
its largest drug customers: governments and managed care organizations.
Vaccines
Vaccines long held a low spot on the drug development totem pole as Big
Pharma pursued products that traditionally offered a better return on
investment. (Part of the reason for this is that developing nations that
need vaccines the most often lack the funds to pay for them.) The situation
has changed, however, due to a renewed drive to produce vaccines that will
prevent or treat devastating illnesses common in the developed world, such
as cancer and Alzheimer’s disease. Some experts are predicting that
vaccines will eventually supplant other medications to become Big Pharma’s
biggest sellers.
Today, there are roughly 450 vaccines in development addressing such health
threats as hepatitis, HIV, and breast cancer. Drug firms are charging more
for newly developed vaccines than they were able to for older ones, a
situation that is spurring vaccine R&D. But government/industry
partnerships are improving the vaccine development picture, too. The Group
of Seven industrialized nations announced its commitment in early 2007 to
provide $1.5 billion in a so-called “advance market commitment” to
subsidize developing countries’ purchase of pneumococcal vaccines. The hope
is that this initiative will provide an incentive for pharma companies to
develop and manufacture new vaccines to fight infectious diseases.
Big Pharma
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.
Big Pharma companies come in two styles: diversified and nondiversified.
Diversified companies, which include Johnson & Johnson, Abbott
Laboratories, and Wyeth, maintain other health care–related businesses,
such as consumer health product divisions and medical device companies,
while those that are nondiversified—Eli Lilly, Merck—focus solely on the
development and sale of drugs. In recent times, though, diversified
companies have been choosing to divest their nonpharma concerns in favor of
the leaner and more profitable drug business. Bristol-Myers Squibb, for
instance, sold Clairol, the number-one hair-products company in the United
States, to Procter & Gamble in 2001.
Biotech
Despite the success of such biotech giants as Amgen and Genentech, a large
majority of biotech shops are still small enough for everyone to know
everyone else’s name. But a growing number is joining the elite group of
biotech firms that have FDA-approved drugs on the market; between 2000 and
2003, the FDA approved some 132 new drugs and vaccines and new indications
for existing products. Once a biotech company has reached the stage at
which it has a product coming to market, its jobs expand from the primarily
science-focused to include marketing, manufacturing, engineering, and
sales. Culturally, companies tend to have growing pains as they move from
R&D to commercialization, but their organizations tend to remain much
leaner and flatter than those in Big Pharma.
Although there are 1,466 biotech firms in the United States (318 of them
publicly traded), with some 200,000 total employees, the biotech industry
is significantly smaller than the pharma industry. Still, this is a vibrant
sector. Between 1992 and 2002, revenue for the industry more than tripled,
from $8 billion in 1992 to nearly $30 billion in 2002. And while funding
for biotech concerns dropped in the early 2000s, this remains one of the
industries where investors are most likely to put their money.
Biotech companies tend to be located in geographical clusters, often near
prominent research universities. The largest concentration of biotech
companies is in California (in and around the San Francisco Bay Area and
San Diego, mainly), followed closely by Massachusetts. You’ll also find
pockets in such far-flung regions as Washington, D.C.; Raleigh-Durham,
North Carolina; and Boulder, Colorado, as well as in New Jersey and
Wisconsin, as these states have recently made an effort to focus on drawing
biotech companies by devoting finding and resources for them.
According to the Bureau of Labor Statistics, employment in the biotech and
pharmaceutical industries will increase at a faster rate than the average
through 2012.
The pharmaceutical job market is healthy. While Big Pharma is under attack
for its pricing and patent practices, it is among the most profitable
industries in the United States. Biotech, on the other hand, relies on the
public and private funding markets to survive the long years until a
product is approved for sale; insiders advise that you ascertain whether
your prospective biotech employer has at least 2 years of funding, and
preferably more, in the bank.
In demand are people with scientific backgrounds, particularly those with
that rare combination of science and computer skills required for
bioinformatics, as well as those who combine scientific training with
managerial ability. Folks with BS or MS degrees in chemistry, molecular
biology, genetics, biochemistry, computer science, and physics can find
absorbing careers. However, a PhD is required if you want to advance beyond
the level of research associate. Nonscience undergrads can get a foot in
the door in biotech manufacturing or pharma sales. MBAs who forgo
consulting and investment banking careers will find a more palatable
work/life balance along with good pay and some of the best benefits
packages around. MDs can find well-paying, engaging work that offers
regular hours and is free of managed-care administrivia.
Some biotech engineers are opting to work overseas, especially in China,
Korea and India, with the lure of more research dollars and better-equipped
labs among the key incentives. Fewer government restrictions are also
attractive to biotech scientists who want the freedom to work in areas that
are controversial in the U.S., such as stem cell research.
Above all, those who choose to work in this industry enjoy the very real
satisfaction of knowing that they are laboring to produce drugs that could
make a radical difference in the lives of thousands, even millions, of
people.
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Changing Lives
Most people in this industry believe deeply in what their company does. As
one MBA says, “When you’re in the pharmaceutical industry, yeah, you’re
there to make money, but there’s also the underlying fact that you’re doing
something that is going to make a huge difference in thousands of people’s
lives.”
The Good Life
Although there’s some debate as to whether industry scientists work fewer
hours than their academic colleagues, they most certainly earn more. And
they don’t have to hustle for money. “It’s nice not always having to worry
about funding,” says one insider. For their part, MBAs can hit six figures
not long after coming out of school without suffering through the travel
and long hours imposed on classmates who opt for consulting or banking.
That Guy’s Pretty Sharp
“A lot of brilliant people are attracted to this industry,” says one
recruiter. And while many of these industrial-strength geniuses are
attracted by the research opportunities, it’s often the presence of fellow
thinkers that they find most enjoyable. “It is definitely a more
intellectual industry than most, which is great,” says one insider.
Business First
In the final analysis, the companies that comprise this industry are just
that: companies. Their chief aim is to maximize profits, not save lives,
and this goal is reflected in the decisions they make. If you end up
working on the world’s 99th drug for high blood pressure instead of the
world’s first drug to treat some incurable disease, don’t say we didn’t
warn you.
Consolidation Blues
“There’s always the risk of layoff,” says an insider. “I don’t care who you
are [Big Pharma or start-up biotech].” Widespread mergers and acquisitions
mean that Big Pharma simply doesn’t offer the job security of yesteryear,
particularly if you’re in administration or manufacturing. While your
experiences will likely serve you well in finding a new job in the
industry, no one enjoys being laid off. And a merger can be an adjustment
even if you keep your job. “Every time you turn around it seems you have a
new title and you’re still sitting at the same desk,” says a veteran of
three consolidations.
The Living Dead
The vast majority (5,999 of every 6,000) of promising compounds fail to
develop into a marketable drug. So if you’re working for a small biotech
company, there’s a serious possibility that your company’s efforts will
never produce a marketable product, which in turn would transform the
small, vibrant company you joined into a stagnant mire. If you’re
considering a stint with a biotech shop, evaluate its prospects as
thoroughly as possible, and heed an insider’s warning: “You don’t want to
end up among the living dead.”
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Top 10 Pharmaceutical Firms, by 2006 Revenue
|
Rank
|
Firm
|
Revenue ($M)
|
1-Year Change (%)
|
Employees
|
|
1
|
Johnson & Johnson
|
53,324
|
5.6
|
122,200
|
|
2
|
Pfizer
|
48,371
|
–5.6
|
98,000
|
|
3
|
Merck
|
22,636
|
2.8
|
60,000
|
|
4
|
Abbott Laboratories
|
22,476
|
0.6
|
66,663
|
|
5
|
Wyeth
|
20,350
|
8.5
|
50,060
|
|
6
|
Bristol-Myers Squibb
|
17,914
|
–6.7
|
43,000
|
|
7
|
Eli Lilly
|
15,691
|
7.1
|
41,500
|
|
8
|
Hoffman-La Roche
|
12,884
|
4.4
|
5,000
|
|
9
|
Novartis
|
12,587
|
11.8
|
22,391
|
|
10
|
Schering-Plough
|
10,594
|
11.4
|
33,500
|
|
Source: Hoover's, WetFeet Analysis.
|
Top 10 Biotech Firms, by 2006 Revenue
|
Rank
|
Firm
|
Revenue ($M)
|
1-Year Change (%)
|
Employees
|
|
1
|
Amgen
|
14,268
|
14.8
|
20,100
|
|
2
|
Genentech
|
9,284
|
40.0
|
10,533
|
|
3
|
Genzyme
|
3,187
|
16.5
|
9,000
|
|
4
|
Biogen Idec
|
2,683
|
10.8
|
3,750
|
|
5
|
Merck Serono
|
2,586
|
5.2
|
2,846
|
|
6
|
Gilead Sciences
|
3,026
|
49.2
|
2,515
|
|
7
|
Applera
|
1,949
|
n/a
|
5,090
|
|
8
|
Covance
|
1,406
|
12.4
|
8,100
|
|
9
|
MedImmune
|
1,277
|
2.6
|
2,538
|
|
10
|
Chiron
|
707
|
n/a
|
5,500
|
|
Source: Hoover's; WetFeet Analysis.
|
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A note about salaries: At large pharmaceutical companies, people in
management positions earn significant bonuses in cash and stock options. At
many biotech companies, all employees receive stock options, which, if the
company does well, can be lucrative. These bonuses are not reflected in the
salary ranges below.
Lab Tech
Lab techs perform the routine maintenance tasks—cleaning and maintaining
glassware, working with animal colonies, operating lab equipment, and so
on—that are needed to keep labs functioning. Only a high school diploma is
required, though many people with college degrees start here as well.
Salary range: $27,000 to $35,000.
Research Associate
A BS or MS in biochemistry or a related discipline and experience working
in a lab are typically required to land this job. Associates work at the
bench, conducting experiments under the guidance of PhD scientists. If
you’re coming out of school with some lab experience but no PhD and you
want to work in R&D, this is the job for you. Salary range: $40,000 to
$71,000.
Research Scientist
After receiving a PhD and completing a postdoc, a scientist can get a job
as a research scientist (sometimes the initial title is “associate
scientist”), designing and conducting experiments and writing up results
for publication when appropriate. Salary range: $65,000 to $110,000.
Sales Rep
Sales reps work with physicians, hospitals, HMOs, and countless other
medical institutions to keep health-care professionals abreast of—and, if
possible, partial toward—their company’s line of products. Some of these
jobs require extensive travel; others don’t. A bachelor’s degree in the
sciences will help, but previous sales experience is more important in
landing one of these jobs. Big Pharma companies have huge staffs of sales
reps, so these positions can offer the necessary prerequisite for the more
complex job of biotechnology sales, where salaries are higher and bonuses
can exceed base salary. Average base salary for all sales reps: $68,600
plus generous incentives.
Marketing Analyst/Associate Product Manager
Job seekers without a background in science can also find work on the
marketing side in Big Pharma and large biotech companies. A marketing
analyst is primarily responsible for coordinating and implementing
campaigns for specific drugs, audiences, or both. This involves a little
strategy and a lot of execution—things like developing collateral pieces,
working as a liaison to advertising agencies, and overseeing a company
presence at conventions. Many MBAs enter the industry this way, and—perhaps
more important—few without MBAs move far beyond the marketing analyst
level, although this varies from company to company. Other people come to
these positions from sales. Salary range: $46,000 to $75,000 (more for MBAs
with industry or sales experience).
Product Manager
This job requires managing a team of people and working to determine price,
distribution, brand image, forecasting, and overall strategy for one or
more drugs. On a micro level, the job can be claustrophobic: Imagine
spending 13 months of six-day weeks learning every aspect of a single drug,
then having the company decide that it would be best simply to let the
product die. But over the years you should be exposed to some of the most
important, dynamic, and profitable drug markets in the industry, an
experience that will give you a big-picture understanding of the industry
and make you a greater asset to the company. Salary range: $65,000 to
$120,000.
Programmer/Analyst
These titles cover a wide variety of jobs, but put simply,
programmers/analysts are computer people. There’s a lot of complex database
work to be done in this industry, particularly for clinical trials, which
can involve thousands of patients (sometimes in several countries) with
elaborate medical histories and completely different responses to each of
the drugs and placebos being tested. And the computational demands of
postgenomic research are enormous, creating demand for job seekers who have
backgrounds combining science with computers. Bachelor’s degrees are
usually required (though not always). Salary range: $56,000 to $74,000.
Regulatory Affairs Associate/Manager
The regulatory affairs career path suits job seekers who have a background
in science but don’t want to do lab work. Regulatory affairs specialists
complete the paperwork required by regulatory agencies worldwide and
communicate directly with the agencies to ask questions and resolve issues.
Depending on their level of industry experience, they may also set
regulatory strategy for a pharma company. A master’s degree is typically
the minimum requirement for entry-level positions. Salary range: $42,000 to
$88,000.
Clinical Research Physician (CRP)
CRPs are MDs who develop and implement plans for ushering experimental
drugs through preapproval clinical trials. They work on cross-functional
teams to maximize understanding of the pharmacological, regulatory, and
clinical dimensions of the drugs being studied. Salary range: $90,000 to
$200,000; company-sponsored speaking tours and other promotional events
offer the enterprising physician numerous other ways to increase net
income.
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Know your audience. A tiny biotech company will want you to be willing to
roll up your sleeves and turn on a dime. A huge pharmaceutical company
will want you to be comfortable with hierarchy and process. Even within a
given sector, each company will have its own specific traits:
research-driven, egalitarian, highly structured. By familiarizing
yourself with these traits before the interview, you will be able to
present yourself in the best possible light—and figure out whether you
really want to work there.
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Be flexible. There is plenty of horizontal movement in this industry,
particularly in more-junior positions. If you can't find a job doing
exactly what you want, consider taking a job doing something else with
the intention of working your way into your ideal job over the course of
a year or two.
-
Scientists: PhDs should have publications under their belts, preferably
as first author. BS and MS job seekers should have some experience doing
research in a lab. And the more relevant your experience is to the lab to
which you're applying, the better. In the interview, technical folks
should be ready to demonstrate that they can apply what they’ve learned
in school. “If a candidate who’s taken some chemistry courses can’t tell
us how to make a one-molar solution of a given reagent,” says one
insider, “it’s a very bad sign.”