I’m blogging from my iPhone while I wait for my car to be inspected. Expect imperfection, although, some of you may not notice a difference.
To those of you on the left who are finally paying attention to pharma research, head on over to In the Pipeline. Derek Lowe has another story that illustrates the state of R&D research in the era of shareholder value and its potential impact on the rest of us.
This recent event is about Merck acquiring antibiotic research company Cubist. Cubist in-licensed much of its pipeline and had a small early discovery research team of 120 people. It has now been announced that those 120 researchers have been laid off.
I guess you could say, well, Cubist in-licensed much of their stuff anyway. But those 120 people presumably have many accumulated years of experience from working on antibiotic research and that experience will largely be lost because companies are not really investing in antibiotic research. Where are they going to go?
Some of them are going to get a nice payout from Merck but even if they pool their resources, it’s not going to be enough to make a dent in the hole of antibiotic research. It will mean starting from scratch-again- for many of them. Or casting around for another hard to keep job in one of the most expensive housing markets in thtalee country.
In the meantime, there goes some badly needed talent to combat multi drug resistant bacteria.
If only there was an institution big enough to fund research in the public interest…
Once upon a time in New Jersey about 20 years ago, there was a company called Merck that everyone I knew wanted to work for. The streets of Rahway were paved with gold. We jokingly referred to our own company as a training facility for Merck and Bristol Myers. The best of the best worked there for two years and then went to Merck.
At local conferences, the Merck people showed up in a pack, smug, condescending, and cast an otherworldly pool of light around them. THEY wrote their own proprietary modeling software. Even as late as two years ago, when Pharmageddon got its groove on, there was something magical about Merck people. They were like fading elves.
Alas, all good fairy tales come to an end and so it was with Merck this week where the rumor is that medicinal chemistry, that is the research part that makes your drugs from scratch, oh best beloveds, has been decimated at Merck. The rest of the story at Merck is unclear at this moment. We’re still trying to piece together whether Merck is going to outsource their synthesis to poorly paid foreign PhDs or whether management, who hasn’t synthesized anything but performance standards and political fantasy baseball for years, is going to don their too tight lab coats and nitrile gloves and go back to the lab. That should be interesting.
Once upon a time, the US had world class public research. Then the big companies decided they didn’t want to do research anymore and they would pharm out their research to academic labs. And they wrote policies about how this would be accomplished and the politicians said it was good because many of them didn’t know what the heck they were voting for. And then the Republicans decided to “drown government in a bathtub” and because they are like Godzillas in Tokyo, they were pretty indiscriminate about what they were knocking down. It turns out that the NIH keeps getting hit pretty hard and grants are harder and harder to come by with higher and higher bars to jump over and endless hours slaving over documents. That time could be used to invent new techniques but research is very expensive and someone has to pay for it. So the academic scientist spends much of his or her time begging to keep the reactions going and the lab rats paid.
The sequester hitting as it did in the middle of the year meant that about 640 grants that would have been supported and highly regarded by peer review are now not going to receive funds. And those ideas are not going to happen. And breakthroughs that they might have represented will not occur. We will not know what we’ve missed because it’s gone. Imagine 640 bright, motivated scientists on the brink of doing something powerful that could have changed the way in which we diagnose, treat, and cure cancer or influenza or diabetes or some rare disease that desperately needs an answer; it’s just not going happen. I would argue with anybody who says that’s a minor consequence. It’s not; it’s a major negative outcome and a tragedy for what had been the world’s most successful search-engine in biomedicine.
Other countries, meanwhile, have read our play book and see their future in trying to do what we used to do. As we seem to be backing away, they are increasing their support. And if people care about American leadership, they should be worried.
Unless something (it’s called C-O-N-G-R-E-S-S) stops the next set of cuts in the sequester, the problem is going to get a lot worse.
I don’t see a happily ever after ending to the story right at this minute but, you know, I’m a Tolkienist so I’m not ready to give up hope yet. The situation at the present time is this. We have private industry pulling out of research because the shareholders are like opium addicts who expect bigger and bigger quarterly hits. Long term investment doesn’t play nicely in the sandbox with an “ownership society” where everyone and their grandma is expected to put their savings into mutual funds that analysts and managers can gamble with. And we have idiots like Rush Limbaugh who yee-haw that the sequester is the best thing since sliced bread because liberals are sucking on it. I wouldn’t wish a Charlotte Corday situation on my worst enemy but I wouldn’t think twice about wishing a drug resistant version of Fournier’s Gangrene on Rush Limbaugh.
In the meantime, some of us still can’t quit science. After two years in the desert, I have to pinch myself because I now have access to all the journal articles I can eat. I’m afraid to click on the “Full Journal Article” button sometimes. It’s almost not real, like ruby slippers. {{Oh, wow, oh, wow!}} But it’s almost cruel too because it’s so uncertain these days. What is granted can so easily be taken away, like coaches that turn into pumpkins at midnight. Sometimes, I think I might have been better off if I’d taken my academic advisor’s advice and studied law. Then I think I’d rather eat glass than study torts.
So, science, yeah. You can barely make a living at it anymore and yet can’t quit the habit. The best I can do at this point is try not to frighten the new, untested, warriors in training that there be dragons out there and to pass on what a wizard once told me, “Don’t let anybody steal your bliss.”
I believe that this story has been mentioned in the comments here, but since I’ve heard from the actual person involved, I thought I’d pass on the canonical version. Someone I used to work with at Schering-Plough found himself (like many others in his position) out of a job in late October. He had a previously scheduled trip to Florida the next day, and as he boarded the plane, who should he see sitting in first class but Fred Hassan, the CEO of Schering-Plough who’d helped engineer the deal with Merck?
As the chemist involved put it, “After quickly scanning to make sure there wasn’t a body guard looking guy near him”, he said “Hi, Fred!” Hassan looked up and asked “Do I know you?” “Well,” said the chemist, “no, probably not, but I’m a medicinal chemist with Schering-Plough, and now Merck”. Hassan smiled and said “Great, so how are you?” The response, in a loud voice, was “Well, I just got laid off!”. He then walked on down to his seat in coach, and heard Hassan saying something about being sorry about that. And as he told me, he sat there in coach, smiling at the picture of Hassan thinking about this irate ex-employee on the plane with him for the next 2 and a half hours. . .
I can think of some other CEOs who we’d like to meet in planes. Like Bernard Poissot, Jeffrey Kindler and all of the guys from Morgan-Stanley and Goldman Sachs who helped arrange the innovation sucking, livelihood killing mergers that resulted in the unnecessary and stupid loss of our jobs.
Now that we know that they occasionally fly commercial, we may get our chance someday Fred Hassan has left such a trail of destruction through the industry, it’s a wonder he didn’t find a contingent of Occupy Pharma on that flight.
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Conflucian Sharon recommended this video last night. It’s supposed to be the research version of Glengarry Glen Ross but it’s eerily accurate.
I’ve even had my share of rageaholic bosses who used to travel from Cambridge, MA to Princeton just for the purpose of screaming in our faces. He subjected my female colleague to a purple faced tirade for close to 30 minutes and it was so loud the whole floor could hear it. Not only that but there have been instances where the guy who invented a multi-billion dollar blockbuster drug for a company was laid off with the rest of the site. Well, after all, that was 10 years ago. The dude probably sold that invention to the company for the customary $1. And after billions of dollars, he gets a pink slip. And yes, we drive Ford Fiestas, or PT Cruisers, in my case. I once had to drive my French director to a dinner in my Cruiser and he told me in no uncertain terms how little he thought of it. I like it. As a single person, I need a car that has the versatility of a Swiss army knife. Besides, if he wanted to travel in style to dinner in a BMW or a Lexus, he was hanging with the wrong crowd. The executives up the road can afford the nice cars.
Every day in the labs that are left in America, a less noisy version of that video plays itself out. Your job is constantly on the line. There is no time for thinking problems through thoroughly, no money for the iterations of experiments that are necessary to crack the problem. Your colleagues become your competition for a vicious game of full time position musical chairs. Every year, there’s a new hairbrained scheme from the MBA class that never sets foot in a lab. One of the most idiotic is to have each department bid for another department’s work. Yes, let’s treat each of our former seamlessly integrated pieces of the research puzzle as potential contract resources complete with competitive bidding with the outside world and all of the time wasting paperwork that goes with that. And no one is allowed to feel “good enough”. If you don’t have a PhD, you’re dirt. If you don’t have a PhD from a prestigious university, you’re barely tolerable. If you haven’t published 2 papers per year in Nature as first author, your job is in jeopardy. Steak knives? Unheard of. You’re lucky if you still get free coffee. And your pension is not safe no matter how many years you put in.
So, it only looks like comedy until you have to live it. Oh, I could tell stories that would make your hair curl. This is the way we treat our best and brightest.
Yeah, yeah, I know, lefties would care about us except we’re *pharma*. Your (lack of) concern is truly touching.
This latest layoff is from Sanofi-Aventis in Bridgewater, NJ. Hundreds of scientists will be losing their jobs. 20-30% may be transferred to the Cambridge facility. Looks like NJ just lost a bunch more taxpayers. There’s not a lot of upside to the layoff of more of my friends and colleagues. There are a lot more of us biomedical researchers on the market now. With the recent announcements of layoffs from Merck, Novartis and Amgen, it’s almost as if the spigot was opened full force again. What is happening to pharma right now would have someone like Steve Jobs spitting nails. The entire focus has been on extracting every last dollar out of the company and abandoning the product line. It’s hard to predict what comes next but pharma can’t be bled dry forever and the Chinese are not ready to take over yet.
Geeks are people too and we have caloric and shelter requirements like everyone else. I would say I am surprised that the Obama administration is not paying greater attention to this problem but by the time the effects of so many unemployed researchers finally hits the American consciousness, he will be out of office. What might have happened if he had taken Christina Romer up on that suggestion of $100 billion for a jobs program? We might all be working our butts off in some mothballed lab somewhere, carrying on with the research we were doing, living on decent but unspectacular salaries and paying our taxes.
But since we are not all male construction workers, Obama isn’t worrying his pretty little head about us.
Some more bad news on the research front. Earlier this week, Merck laid off a number of employees from the parent company and Schering-Plough, the company it merged with a couple years ago. I can’t find a firm number for the total layoffs. In some reports, it’s 17,000, in others it is 17,000 plus an additional 13,000. That’s worldwide. And while Merck has something like 91,000 employees worldwide, when it comes to laying off research, it comes primarily from the US side because American research workers have zero labor protections. I would expect the loss from Western European research facilities to be light. Estimated cost savings are $400 million out of a budget of $7.9 billion. That is a huge research budget but that’s what it takes these days. Drug discovery is very expensive. Merck and Schering-Plough have facilities in the Northeast, particularly in Rahway, NJ, West Point, PA and Kennilworth, NJ. Derek Lowe at In the Pipeline says he is getting heavy casualty reports in from the research professionals at Schering Plough (Kennilworth). I know people who work at both companies and I’m very sad for them. This is not a good time to be untethered from a steady income. I hope they’ve prepared themselves. The loss to the states of NJ and PA in tax revenue from cutting these well-paying jobs is going to be pretty bad. So, this month we have Novartis, Amgen and Merck-Schering-Plough. Wait, wasn’t there another one? Too many to keep track of. And more competition for me. Well, I am in good company. Some of the smartest people in the country, no, the *world* are now out of work.
Jay Ackroyd thinks that the desire to globalize is driving this and calling it “centrism”. Jay’s anger and disgust is pretty clear but coming from the corporate world that most lefties hate, hate, HATE with all their souls, I see this a little differently. For example, take the way Steve Jobs was pushed out of Apple back in the 80’s. I’m listening to the biography by Walter Isaacson. Jobs was no saint. Back in the 80s, he was the heartless boss from hell. I guess you could chalk that up to youthful immaturity but when the precariousness of his position at Apple hit him, he got a sense of how companies would work in the future. John Sculley, the president Jobs hired to run Apple, was a marketing guy. He didn’t understand the product he was manufacturing. He wanted to spin off the creative part of Apple to a unit called Apple Labs, that would be run by Jobs. It was a way to get rid of Jobs and his loyal creative types who wanted to act like pirates. Sculley wanted employees to put Apple, the company, first. People like Jobs wanted to put the product first. It’s too bad that he acted like such an obnoxious, insulting immature brat because Jobs was right. Most companies have followed the Sculley route. They put sales and marketing and making money first. And that’s what companies are for, to make money. You’d have to be stupid if you had any altruistic aspirations for having a company. But what marketing people fail to see is that without a product, you have nothing to sell. If you short your R&D division, you’ll be cutting your own throat. It won’t happen overnight but it will happen. And then you’ll be busily eating your seed corn to make those quarterly earnings, like Merck, Pfizer, Novartis, Amgen… After Jobs grew up a bit and came back to Apple, he put the focus back on innovative products and now, the company is the most profitable in the world.
So what does this have to do with Ackroyd’s piece? Well, if pharma is any indication of what is really going on, globalization is a fad. That’s what the business people do. They chase fads and trends. They rarely follow up on their initial enthusiasm to see if the fads actually add to their bottom lines. It’s the initial savings that they care about because that’s immediate, it’s quarterly and they think better in 3 month increments. Pharma went through a period of mergers and acquisitions that did nothing for research and only enriched executives’ pockets. But there have been other fads, like combinatorial chemistry, proteomics, siRNA, and genomics. None of them turned out to be the panacea the Sculley class was looking for because the nature of biology is such that these technologies were just tools that we used to dig up more problems to solve. They were never intended to be solutions all by themselves. The newest fad is to relocate all of research (or what is left) in the bay areas, Cambridge,MA and San Francisco and San Diego, CA. Presumably, the smartest people in the world graduate from MIT and Harvard and Stanford and UCSD. That may be true. But it may also be the case that only the wealthy and well connected can get into those schools anymore. It also ignores the fact that for years, biomedical researchers came from all over the country, prestigious and unprestigious schools alike. I’ve known excellent researchers who graduated from schools in Indiana, Colorado, New Jersey and Louisiana. But this idea of educational exclusivity and capturing the elite is the new fad. They will do the brain work and the hands on stuff will be carried out by a bunch of drones in China and India. The corporate guys are marketing and sales and business school guys. They think research and innovation can be broken down to a list of mind numbing chores and “just in time” off the shelf solutions while the “better people”, people like them in their social class, are graduating from ivy league schools and those people have the natural talent to manage the innovation process. The corporation will take the profits gained by outsourcing.
And they are following this course of action and business not because it is good for the companies they serve but because they can. The rules don’t apply to them anymore. I’m not sure the goal was always globalization but now that there’s nothing to stop them, that’s what they’re going to do even if it ruins the product line. The Sculleys of this world do not understand what motivates people who do research and who are inspired to innovate. Here’s a clue: the most profitable product line of the world was designed by a college drop out and his rag tag bunch of unorthodox pirates who were left to their own devices.
So, Jay, I wouldn’t worry too much about the desire to globalize. At some point, the grasshoppers will stop eating their seed corn because there will be nothing left, the big corporations you hate will find themselves smaller and their research divisions located in Western Europe and the fascination for the elite universities will be tempered by the reality that real innovation takes time and dedication and getting the right people *together* in one place. At some point, the researchers in China and India will get fed up with studying hard for years only to be treated like cheap assembly line workers by the Sculley class. It would also help if lefties took some time to understand pharma so they would stop contributing to the demise of biomedical research through bone headed ignorance. But that’s another post. Yeah, it may mean that the innovation infrastructure of the US is decimated. But I wouldn’t be looking for meaning in any of this. Think of it like water flowing in the path of least resistance. There’s nothing intelligent about this, as in sentient beings planning to gut their product lines for the sake of a quick buck. There’s no giant conspiracy to globalize. It’s happening because we allowed it to happen.
When we block the path to a quick buck at the middle class’ expense, it will stop. And we know this is possible because there are countries where the government has protected their innovative infrastructure. When the dust settles and the corporations come to their senses, it will be the middle class in places like Germany and France who will be able to carry on. If we want to be one of those countries, we have to decide that we want to reimpose the rules. There’s no need to over analyze. But I would like to point out that saving innovation here does not mean that we as a country will not be taking advantage of cheap labor elsewhere. As Nucky Thompson says, “We all need to decide how much sin we can live with.”
In other news, if the election were held today, guess which politician would have the best chance of beating the Republicans? It’s Hillary. Yep, sorry lefties who hate Hillary, in a recent Time Magazine poll she beats the Republicans by larger margins than Obama does and she’s not even in the race (yet):
A national poll conducted for TIME on Oct. 9 and 10 found that if Clinton were the Democratic nominee for President in 2012, she would best Mitt Romney 55% to 38%, Rick Perry 58% to 32% and Herman Cain 56% to 34% among likely voters in a general election. The same poll found that President Obama would edge Romney by just 46% to 43%, Perry by 50% to 38% and Cain by 49% to 37% among likely voters.
It always amuses me when the left starts to hyperventilate about the prospect of a Republican president next year and how evil that would be. But when you give them a perfectly acceptable alternative of someone with a lot of experience, who is excelling in foreign policy, runs a global executive branch and has been able to stay away from domestic issues to emerge fresh as a rose, while being widely admired by world leaders and voters of both parties, they flinch when it turns out to be Hillary. Apparently, they are MORE afraid of Hillary Clinton in the White House than Mitt Romney or Herman Cain or, gawd help us, Governor Rick “Good Hair” Perry.
No? That’s not how it is? There’s something I’m missing? Oh, her Iraq War Resolution vote. Yeah, she single handedly brought on the Iraq War. Of all 99 senators who voted for that POS in 2003, HER vote counted more than anyone elses. It was even more powerful than John Edwards’ IRW vote. It had to be because the left was perfectly happy to forgive and forget that reckless phony.
I can just see them gearing up to spew some anti Hillary hatespiel. No, no, save your breath. No one cares what you think of Hillary anymore. Your opinions are not more important than the rest of the electorate. She should have her opportunity because the Democrats don’t really have anyone better, not even Obama. No one is entitled to a second term.
But if you get stuck with a Republican in November 2012, you have no one to blame but yourselves. Hillary wins over all of them, you passed anyway.
I happen to work for one of those 50 companies, which gives me a little bit of perspective (even if I am very far down its hierarchy). And I can tell you that most of those companies aren’t in that position because of a conspiracy of control – but because you have a pension. AXA, Legal and General, Aviva, Sun Life, and many many more of the companies on there are there because ordinary people put their cash into life insurance or pensions, and that cash is then invested in the stock market so that it can make payouts in the event of either problems (for the insurance) or retirement (for the pensions). And because many of these companies provide pensions either for millions of people, thousands of large companies, or both, they are managing massive piles of cash.
Which doesn’t mean that they’re actually running the companies they own lots of shares in. Most pensions/insurance/life companies are terrified of telling the companies they own shares in how to behave – they want to own shares in something successful so that they make profits, but they don’t have the time to micro-manage them, and they really don’t want to get involved in anything that smells even slightly political.
This actually leads, sometimes, to insufficient control over the directors of large corporations – because if you’re in the FTSE 100, you’re going to find your shares are owned by a lot of investment companies, who just want you to churn out profits, without paying too much attention to, say, board-level renumeration. So you can get away with paying your high level people a lot without a share-holder rebellion. If they were owned by a few ordinary people then they’d find themselves subjected to a lot more scrutiny, and a lot more control.
Well, Andrew, speaking as a former employee of one of those companies that the network node companies are terrified to micro manage, I call bullshit. The pharma industry has been micromanaged to death by the node network guys. When they’re not totally onboard some gutwrenching merger or acquisition, they’re telling the CEO to cut more from research. Yeah, that’s the ticket to a successful, money making pharmaceutical company! Dismantle the research apparatus. Do it quickly, like before the next quarter. Andrew, please do not tell anyone in the pharma industry who has either lost their job or about to lose their job (those are the only two categories at the present time), that the pension fund managers and big banks and other financial sector players have not had a profound effect on the way pharmaceuticals run their businesses. We have been at the Town Hall meetings when the head honchos have told us directly and to our faces that you guys have been leaning on them- heavily. It’s not bad enough that pharma has been shooting it’s own image in the foot with lobbyists and high drug prices, that you financial types skim from, or that it is constantly under attack from the left for being less than perfect (as if there is such a thing as a perfect drug, there isn’t). No, what really pisses the labrats off is yet another boneheaded restructuring plan brought on by some nitwit Wharton School graduate who just has to take the latest management trend out for a spin to teach those damn researchers that research costs money, by golly! How dare they consume so many pipettes, order so many tests and break so many instruments. Don’t they know that those costs go into the debit column?? Well, they’re going to have to learn a thing or two or we’re not going to make our quarterly estimate.
It’s been done to every one of the companies I’ve ever heard of. If the companies aren’t shedding research jobs to hire cheap contractors, they’re shedding research jobs to just get out of unprofitable therapeutic areas. Well, who needs antibiotics anyway? The latest news is that Abbott is spinning off the pharma unit altogether. Oh sure, they’ve got a blockbuster that will keep them afloat for awhile but most likely, they’ll get swallowed up by a bigger shark and where will the cost savings come from? That’s right, the research unit. These days, companies buy products, not the group that actually discovered the product.
More joy is on the horizon for 380 Amgen employees who learned just last week that they are going to lose their jobs. (pharmas are either tricklers or gushers when it comes to cutting jobs. Amgen is a trickler; Pfizer is a gusher. But it’s all the same in the end) Really, guys, do the rest of us unemployed labrats need more competition? And Merck, the beacon of stability, that has been holding off the financial analysts bravely for the past couple of years while the rest of the pharmas have done what their masters ordered, seems to have finally thrown in the towel. They are going to be making an announcement next week about reorganizing. Derek Lowe’s blog, In the Pipeline, has some of the details and this complaint from Derek:
And on a similar topic, here’s a post from John LaMattina asking what many people have at one point or another: how come Wall Street analysts get so much influence over how much a drug organization spends on R&D? His examples are Merck, Lilly, and Amgen, and his take is:
“Now, I am all for monitoring R&D budgets to maximize the returns from these investments. And I am all for accountability – asking the R&D organization to deliver new candidates to the pipeline, having formal goals with rigorous deadlines, and for running clinical trials as expeditiously as possible while keeping a close eye on costs. But for Wall Street to reward a company for lowering R&D spending and attack those that want to commit to R&D is absurd. Like it or not, R&D IS the engine that powers a pharmaceutical company. It is also a high-risk endeavor. Furthermore, given all of the hurdles that now exist especially with regard to ensuring safety and having sufficient novelty to justify pricing, R&D is more expensive than ever. But, if you want to succeed, you have to invest – substantially. There are no short cuts.”
Wall Street’s answer, which may be hard to refute, is that if you want the access to capital that the stock market provides, then you have to accept the backseat driving as part of the deal. But do we get the same degree of it as other industries, or more?
That is the rule, Andrew, not the exception.
Now, I know that a lot of people at OccupyWallStreet don’t much care for pharma. I know it takes a lot of milk of human kindness to love us but try, people, try. It’s really important that you try to understand this problem. Because if there was ever an industry that needed to be liberated from Wall Street it would have to be pharmaceutical research. Wall Street and pharmaceutical research are about as incompatible as two entities can get. Wall Street is all about short term profits and paying the shareholder. Pharma research “used” to be about developing cures through science and long term committments. The Wall Street crew does not care if there is a research industry left in this country. It is not interested in your excuses that research takes time and human organisms and their cells are very complex. They are deaf to the pleas that we are being squeezed by the FDA to make our imperfect drugs perfect and need to carry out more and more expensive clinical trials that will cause some drugs to fail to advance. All Wall Street cares about is whether the quarterly estimate will be hit or not. And the MBAs who populate pharma’s corporate office suites are there to see that it is done. That’s why they make the big bucks.
This is an opportunity, occupywallst, to take pharma back and make it work for the public. Don’t pass this one up.
Moving on to cures of a different kind:
The people at ApartmentTherapy are starting the 20/20 Home Cure on Monday. It’s 20 minutes a day for 20 days. Each day features a different project to get your house back in shape. You can sign up at ApartmentTherapy on Monday. Here’s Maxwell’s introduction video to explain what it’s about. If you are a bit more ambitious and need more structure in your home clean up routine, check out the 20 minutes for 30 days plan. You can add these tasks to your favorite productivity tool (I’m testing out Home Routines for the iPad) and they can come up on a regular basis. I have heard that if you do something for 21 days, you’re more likely to make it a lasting habit. So, if you’re like me and you spend a bit too much time hunched behind your computer, join ApartmentTherapy on Monday for the Home Cure.
Apartmenttherapy is just a great site to add to your daily routine anyway. If you’re looking for a way to change your home environment in some way, they have the answers, ideas, DIY projects and plenty of design inspirations from people on budgets, updated frequently throughout the day. They have several sibling sites too that cover everything from renesting, food, and parenting to planning your next high tech gadgets. Another blog of visual relief for the home is Design*Sponge by Grace Bonney and her crew. Highly recommended.
On the menu for a cool fall evening, Roast Pumpkin with Cheese Fondue. I made this last year. Dead simple to assemble, delicious. Should be served in front of a toasty fire with salad and a crisp white wine. Yummm.
Last week, my lab partner and I sat in on a webinar from the American Chemical Society (ACS) discussing employment and employment trends of its members. Now, the fact that the ACS is even having a webinar like this is significant. It’s because so many chemists are out of work. In previous recessions, this bloc of well educated, technically savvy workers was able to weather the economic downturn relatively well. Not this recession. Now, our trend lines follow the rest of the country’s workers. We’re not as badly off as workers without college degrees but there is no doubt that the ACS sees ominous signs that there is a decline in our ability to put our degrees to work for us.
There were two dudes from the Bureau of Labor Statistics on hand to give the government’s outlook on employment for our sector. And by and large, they were useless. Problem? What problem? According to the BLS, our sector is experiencing a minor blip of something like 3.8%. The ACS only shows a 5+% unemployment rate. Why are you chemists belly aching? And look! If you switch to biochemistry and biophysics, your sector is going to be booming right up into 2018. Oh, sure, if you’re a chemical engineer, life sucks for you -because we’ve moved production facilities out of the US. Ever wanted to get your drugs from Canada? Well, now you can.
The questions that came from the audience demonstrated confusion. Those numbers are not what *we’re* experiencing. Just about every R&D chemist I know is unemployed right now. The pharma sector, despite what might be your personal distaste for the sector, has laid off more than 100,000 people since 2008. Pfizer alone laid off 19,000 people last year including nearly all of the chemists at Wyeth with whom they merged in 2009. Pfizer is preparing to lay off more this year and ship some of the rest to Cambridge, Massachusetts. Presumably, those are the chemists that can switch to biochemistry and biophysics. Really, guys, it’s not that hard. OK, it was grueling but very rewarding. I did it last year. Then *I* got laid off. D’OH! But the carnage is not limited to Pfizer. They’re all doing it.
The general impression I got from the BLS guys is that they really don’t know anything about this sector. They admit that they haven’t updated their subcategories for the sector since 2007 and aren’t scheduled to reclassify them until 2012. The predictions they are making about the sector for 2008-2018 are based on statistics gathered prior to the financial collapse of 2008. By the time the BLS catches up, it will have missed the hollowing out of the R&D due to the financial guys eating what they kill. The BLS also doesn’t seem to have a category for R&D chemists. We’re considered “manufacturing”. Because we’re not in academia? I don’t know. It seems very vague and indistinct but apparently, some miracle is already in progress and we are all shortly to be gainfully employed making antibodies.
The ACS is not a whole lot better off. Many of the people in their target audience who participate in their annual survey of employment no longer get email from them. It’s hard to reach people who are no longer employed. It’s also hard to justify paying your ACS dues if you need to pay your car insurance and you aren’t getting an income. Better to borrow a copy of C&E News from a friend who still gets it, provided you can still find someone who isn’t in the same boat you’re in.
Here’s what the people on the inside of the industry are seeing: small molecule chemistry in this country is dead or dying. The money guys have decided that making new small molecule drugs is too risky. Or expensive. They are shipping the small molecule synthesis overseas to Chindia or to countries where the labor laws protect workers better. The industry is pulling out of traditional medicines and investing in biologicals. That’s because biologicals have better patent protection (well, at the *present* time. Politics being what they are and pharma being indiscreetly reviled amongst Democrats could change all of that.) But biologicals are going to be expensive too and there’s no guarantee that the end result is going to provide better therapies. The risk is still high but not as high as it is for traditional medicines when it comes to money. So, the money is going to biotechs and R&D is bugging out of some geographical locations to be crammed into Cambridge, MA. You want to know where our best employment prospects are? China. Yep, there’s an inexplicable shortage of R&D chemists in a country with 2 billion people. Even China can’t keep up with China.
Also, the finance guys continue to blame the researchers for the lack of new drugs in the pipeline. What the finance guys either forget to mention or don’t know is that researchers work their asses off for new drug entities but the bar for approval by the FDA keeps getting raised. It’s getting harder and harder to make a drug that has zero risks for patient, lawyers and shareholders. It doesn’t help that the industry has been careening from mergers and acquisitions, new technologies, management theories (that are really not helpful, guys), outsourcing and the thirst for “get rich quick” schemes that would put Ralph Cramden to shame. Everything that has been going on for the past 15 years that has sucked the life out of research has been on warp hyperdrive since 2008. What would make the industry more profitable is for research companies to take the long view, buck the pressure of the finance guys and have patience so that research productivity can actually happen. Merck is one such company. But Merck is an exception under pressure. Long term thinking can’t happen when we have financialized our own retirements with a 401K system and a roulette wheel of high stakes brokerages and quants. We expect our investment portfolios to keep increasing indefinitely and some of those profits come at the expense of our own jobs. In effect, we are our own worst enemies.
Meanwhile, R&D infrastructure is going to continue to melt away. The chemists thrown out of work today won’t find a job for a mean of 11 months. They may not be able to find a job in biotech. With so many of them out of work, employers can be very persnickety and choosy. And with the fast pace of scientific discovery these days, it’s hard to keep skills and knowledge fresh and current without practice and access to scientific journals. In short, we’re doooomed, both on a personal professional level and as a country that used to take pride in its R&D leadership.
But the country and it’s lawmakers won’t know that for several more years if the BLS has been feeding them stale statistics. They’ll keep partying like it’s 2007.
“I think Brian Cowen was probably the worst taoiseach we’ve ever had,” said David Ryan, 76, a retired businessman, using the Irish word for prime minister and speaking of Fianna Fail’s former leader. “I am totally angry,” Mr. Ryan went on — not just at Mr. Cowen, who resigned last month, but at the Irish banks whose spectacular debts his government promised to guarantee on a fateful day in 2008. “They were totally corrupt.”
Yes, if you screw your citizens to prop up corrupt and criminally negligent banks, you will be politically annihilated. Hmmm, this next bit is interesting. You could substitute “American” for “Irish” and either one of our parties for “Fianna Fail” and it would read just as well:
Unemployment is up to 13.8 percent (it was as low as 4.2 percent as recently as 2005); public spending has been savagely and repeatedly cut since 2008; the deficit has risen to 14.3 percent; and current predictions suggest that 100,000 people will emigrate in the next several years, from a population of 4.3 million. The bill from the struggling banks may, in the end, total upward of $135 billion 100 billion euros,Ö in an economy with a G.D.P. of $220 billion 160 billion euros.Ö
The housing bubble that fueled the boom has collapsed, along with the banks that made the loans that led to it in the first place. In November, the country was forced to accept a humiliating and onerous $92.8 billion 67.5 billion euro international loan package that tied it to a brutal four-year austerity program. The package came with such unfavorable interest rates that some economists feel the country might be unable to afford even to service the debt.
Many of these problems can be directly attributed to poor decisions made by the government, said Diarmaid Ferriter, a professor of modern history at University College Dublin. “There has been a complete and utter lack of leadership in Ireland,” Professor Ferriter said. As for Fianna Fail, he said, “They’ve actually managed to alienate all sections of our society.”
The question is, do the Irish have someplace else to go? Do Americans? Because I see Obama going the way of Brian Cowan. The jig is up. And the Republicans better not get too comfy either. 2012 could be a major game changer.
Yeah, yeah, I know, lefties would care about us except we’re *pharma*. Your (lack of) concern is truly touching.
The Confluence 