As Big Pharma Downsizes, A Major Loss of Brain Power

As Big Pharma Downsizes, A Major Loss of Brain Power [the Philadelphia Inquirer]

From Philadelphia Inquirer (PA) (August 21, 2011)

Aug. 21--Maybe the 15 women chatting over coffee at the Wegmans supermarket cafe in Malvern should start their own pharmaceutical firm.

They have the brain power, if not the capital.

A scientist who spent 19 years in drug development sat a few tables away from a coordinator of clinical trials.

A few managed pharmaceutical finances, and one administered a $2.7 billion global research and development budget. One handled drug pricing and another edited marketing materials. The former human resources person squeezed in next to the woman who once worked in supply logistics.

Average annual salary: at least $100,000. Total pay in the group: about $1.5 million.

But not now.

Not one holds a full-time job in her field -- all have been laid off, part of the huge brain drain in what has been one of this region's key industries.

"It's tragic. It's a colossal waste of what we could be contributing," said Robyn Allen-McKinnon, at Wegmans earlier this month, part of a group that meets every other Monday, including tomorrow in King of Prussia.

Allen-McKinnon has been out of work for a year, despite two master's degrees and 20 years of experience in operations and in negotiating drug prices with insurers.

The reasons are many, recruiters for the pharma industry say.

"What's happened in the last five years is a complete implosion," said recruiter Cheryl Buxton, who leads the pharmaceutical practice out of the executive-search company Korn/Ferry International's Princeton office.

Some, she said, are related to changes in the pharmaceutical-product mix, some related to the way big pharma companies organize their workforces.

To cope with projected revenue declines and margin erosion as some blockbuster drugs went off their patents, companies consolidated, among them the 2009 Pfizer Inc. acquisition of Wyeth. Those consolidations, in turn, led to people such as Allen-McKinnon being out of work.

"I think it's a tragedy," Buxton said. "I think we're losing so much expertise."

Four of the 15 at Wegmans on Aug. 8 lost their jobs in the Pfizer consolidation.

"We are such high-achievers," Allen-McKinnon said. "We expect to be doing something and making contributions. We chose this area because we wanted to make a difference in people's lives."

"In pharmaceuticals, they are not laying off 500 people here and there," said Alma Azua-Cassady, who worked in health-care marketing until she lost her job at AstraZeneca P.L.C. in December 2008.

"They are laying off 12,000 people at a time," she said.

AstraZeneca, with facilities in Wilmington, kept piling on the cuts, enough to bring them to a planned 15,000 worldwide by the end of 2013. Pfizer slashed 19,000 jobs after it acquired Wyeth, with many at Wyeth's Collegeville location losing work.

In July, Merck & Co. Inc. said it would cut as many as 13,000 jobs by 2015 -- that's on top of 11,500 jobs lost in 2010.

"We're very aware that the pharmaceutical industry is shrinking," said Allen-McKinnon of Plymouth Meeting.

She and most of the others have had interviews but, so far, no jobs.

There are many ways to count what society as a whole loses when people are out of work, and one of them is the multiplier effect. That is a term economists use to measure the ripple effect of each dollar as it moves through the economy.

Statewide, said Rutgers University professor Michael Lahr, who has studied the economic effect of pharmaceutical companies, each spent salary dollar adds roughly $1.50 to the economy.

Doing the math, that is $2.25 million worth of spending being curtailed with the loss of those 15 jobs. An example? Allen-McKinnon and her husband own two cars, each with more than 100,000 miles.

Before, they would have spent $25,000 each to buy new ones. Their decision to delay means lost revenue at local car dealerships.

At Wegmans, the women, members of the Healthcare Businesswomen's Association Women in Transition group, talked about resumes and job-search tips. Some agreed to meet later that week to participate in a focus group for pharmaceutical specialists.

After all, they had the time.

Some had never been laid off; most had never had to look for a job. The weight of it hung heavy but flew away as they talked about their industry, interrupting one another to offer a visitor definitions of industry terms such as biologics and orphan drugs.

They slipped into the lingo like a pair of comfortable shoes -- back talking about pharmaceuticals again.

Fundamentally, they explained, they are out of work because many of the blockbuster drugs that pumped profits into the pharmaceutical companies are coming off their patents, leaving the door open for the development of generics with lower-profit margins.

The blockbusters covered the most common conditions, such as high cholesterol, "but they don't have any new drugs in their pipeline, so they are laying off people," said group coleader Sue Price, a former supply-chain executive pursuing work in career counseling.

That requires, Allen-McKinnon said, drug companies to develop more niche products, but they serve fewer patients, "so you don't need the same number of marketing people and you don't need the number of people in financials."

Price said some jobs were emerging in smaller biotech or research companies, and recruiter Buxton agreed.

"The companies who are hiring are smaller, midsize companies," Buxton said. "These are great companies -- but they don't have the sheer volume of jobs that the Mercks of the world did."

The small firms worry -- wrongly, Price believes -- that former employees of big companies are too specialized, unable to handle a range of tasks.

"Most of us are at the director level or above," she said. "Even if you are OK with taking something lower, they are nervous about offering it."

The big pharma companies encouraged specialization, the women said, but that specialization is costing them as they hunt for jobs, because potential employers do not seem to be interested in transferable skills.

"I'll go out to an interview and be asked how many orphan drugs I have launched," said Donna Zubek, of Flemington, N.J., a drug marketer who was laid off from Sanofi-Aventis in Bridgewater, N.J.

"Well, there aren't even that many orphan drugs to be launched," she said, referring to niche drugs that help only a small number of patients.

"I've helped launch many, many other drugs, but they won't consider me," she said.

It also frustrates Katherine A. Driggs, a manager of corporate finance laid off in December from Pfizer-Wyeth. Driggs, of North Wales, was the finance person who worked on Wyeth's $2.7 billion research budget.

"I'm a finance person," she said. "Give me a profit-and-loss statement and I can analyze it, whether it's pills or widgets."

Contact staff writer Jane M. Von Bergen at 215-854-2769, jvonbergen@phillynews.com,

or @JaneVonBergen on Twitter. Read her workplace blog at www.philly.com/jobbing

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Posted: August 2011


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