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The Pharmalot blog today reported that pharma and biotech downsizing, restructuring and outsourcing have resulted in 38 manufacturing facilities in 2011. While this may not sound like a lot given the ongoing tough economy, the post reports that 65 facilities were closed in 2010. According to some estimates, these closures have resulted in the loss of roughly 18,000 life sciences manufacturing jobs in the past two years. Sadly, pharmaceutical manufacturing, like almost all other manufacturing jobs in the US are being lost at an unprecedented rate. Further, many of these manufacturing jobs are being outsourced to multinational CMOs or to manufacturing facilities being built by pharma companies in emerging markets like Latin America, Eastern Europe and Asia.

Not surprisingly, most of the 2011 closures were in the Northeast (8) resulting in the loss of roughly 1,400 jobs. And, not surprisingly again, one of the hardest hit states was New Jersey; home to almost all of the major pharmaceutical companies in the world. The next region that was hit hard is the Mid-Atlantic (7) with notable closures in Maryland (Shire Pharmaceuticals) and North Carolina (DSM Pharmaceutical Products).

Interestingly, while plant closures are on the rise, there is new manufacturing facility construction that may help to offset the losses. However, unlike the past, many of the new facilities are being financed by academic institutions and not-for-profits rather than life sciences companies. According to the post, roughly 106 new North American (not only the US) are underway and represent an investment value of $4.3 billion. The new Shire facility being constructed in Lexington, MA and the International Vaccine Center (InterVac) in Saskatoon, Saskatchewan were cited as examples.

Despite the constructions of several new manufacturing facilities in North America, it is obvious that most major life sciences companies are looking South and East for future pharmaceutical and biomanufacturing capabilities. The bottom line is that labor and the cost of goods are cheaper in these markets and in contrast with the past, there are skilled workforces in place to manufacture life sciences products according to American, European and Japanese Current Good Manufacturing Practices. 

Until next time...

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

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The fourth quarter is over, earnings are being announced and new budgets for the upcoming fiscal year are being evaluated and tweaked. This means that we have officially entered layoff and closure season. Isn’t it great that big companies wait until right before the holiday season to let employees know whether or not they will have a job next year?

That said, two companies, Bristol Myers Squibb (BMS) and Pfizer/Wyeth are the first to kickoff the 2009-2010 season.

BMS announced that it will lay off 25% of its Abilify sales force. This comes only six months after the drugmaker extended its contract with Otsuka Pharmaceutical to market the anti-psychotic and depression drug. Abilify is BMS’s second best selling medication after Plavix that is co-marketed with Sanofi-Aventis. Otsuka developed the drug and BMS markets and distributes it in the US and several European counties.

Abilify loses patent protection in 2012 and faces stiff generic competition in the anti-psychotic and depression markets. A BMS spokesperson declined to say exactly how many reps would be losing their jobs. However, according to a post on the sorely missed and recently resurrected Pharmalot blog there is speculation that Otsuka may hire some of the layed off BMS reps.

In other news, Pfizer/Wyeth announced that it will be closing its facility in Bridgewater, NJ but expanding operations at its Peapack-Gladstone, NJ location. The Bridgewater facility employs 300 people, 100 of which are involved in technology.  The company announced yesterday that it wouldn't be shutting down Wyeth's Collegeville, PA headquarters.

Over 120,000 employees have been laid off by pharma companies in the past three years, many of whom lived and worked in New Jersey.  Unemployment in NJ is hovering around 10%.

Stay tuned for more updates.

Hat tip to Ed at Pharmalot

Until next time...

Good Luck and Good Job Hunting!!!!!

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Astra Zeneca announced today that it would cut 1400 jobs and close several manufacturing facilities worldwide. According to a post on the Pharmalot blog “about 600 full-time jobs will be lost in Sweden as packaging operations are expanded in Wuxi, China. The cuts will come on top of the 7,600 positions the drugmaker plans to eliminate by 2010. The plant closings will occur in Spain, Belgium and Sweden by 2013. Manufacturing jobs will also be trimmed in Sweden and the UK as production is shifted to lower-cost countries in emerging markets.”

On Tuesday Wyeth disclosed that it was eliminating 70 positions at its Pearl River, New York, facility (which employs 3,200 workers, 118 employees at its Rouses Point facility in upstate New York that employs 725 people work, and 124 jobs at its Sanford, North Carolina manufacturing facility. Ironically, as more and more US workers are laid off, many big pharma companies like Merck, Pfizer and GlaxoSmithKline are expanding operations at their research facilities in India. In fact, Merck is doubling its headcount from 800 to 1,600 employees at its research facility in India that was opened a little over a year ago.

Until next time…

Good Luck and Keep on Looking!!!!

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As you all know by now, American pharmaceutical companies have been intermittently laying off thousands of employees for the past two years or so. Many of the employees who have lost their jobs are R& D scientists, marketing personnel and sales representatives. This seemingly makes sense—because fewer drugs are being discovered and brought to market, fewer people are required to market and sell them. That said, isn’t discovering new drugs the currency and lifeblood of the pharmaceutical industry? How do these companies plan to stay in business if they continue to layoff employees who are seemingly responsible for developing new sources of revenue for them? Taking their cues from the IT and software industries, many US drug makers are beginning to either transfer R&D operations to foreign, company-owned research facilities or outsourcing some or all R&D activities to foreign contract research organizations (CROs).

For those of you who may not know, US pharmaceutical companies have been routinely outsourcing various aspects of R&D and drug manufacturing for many years. For example, a majority of the active pharmaceutical ingredients (APIs) and excipients found in many drug sold in the US are routinely manufactured in places like China, India and elsewhere. Until recently, many pharmaceutical companies were reluctant to outsource many critical R&D activities, e.g., screening, medicinal chemistry, pre-clinical testing, etc. for fear of inferior quality. However, the increasing costs of conducting US-based R&D coupled with a worldwide glut of American-trained, foreign scientists (who were unable or not permitted to find jobs in the US) has made the practice of outsourcing R&D operations less risky and more economically feasible. After all, many of the scientists who work in company-owned foreign research facilities or foreign-owned CROs were trained by American scientists who work at some of America’s pre-eminent academic and government research institutions.

From a business perspective, it makes complete sense that pharmaceutical companies might opt to transfer or outsource R&D operations to foreign countries—the quality is good and it is much cheaper! That said, don’t expect the price of pharmaceutical drugs to plummet anytime soon as more drug makers outsource or expand their R&D operations in foreign countries. Put simply, pharmaceutical companies are outsourcing R&D to cut costs, drive up stock share prices and insure financial growth by preserving the staggering product profit margins that they currently enjoy. Take Bristol-Myers Squibb (BMS) for example. Late last Wednesday, its CFO told a group of financial analysts and investors that the company plans on trimming $2.5 billion by 2012 from its operating budget through US job cuts and revamping operations. Shortly after the announcement, I read with amazement that BMS is expanding its R&D operations in Bangalore, India and that they are looking to hire no fewer than five new Department heads—America’s loss is India’s gain!

While outsourcing or expanding R&D operations in foreign countries at the expense of American workers may help the bottom line of many US drug makers, it will do precious little to reverse the decade-long, decline of America’s global competitiveness in science and technology.

Until next time…

Good Luck and Good Job Hunting (try India)!!!!!!

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