More Big Pharma Layoffs: What This May Mean

Unfortunately, it appears that Johnson & Johnson (JNJ) is continuing to trim their chemistry staff. I’ve heard from people there that another round of layoffs have hit, most of them to take effect later this year. And as usual, the company doesn’t seem to be making any public announcement about this. Readers with more details are welcome to add them in the comments.

This has clearly not been a good year to be a drug researcher here in the US, what with the Bayer and Pfizer upheavals earlier and now this. There seem to be several reasons for this, some of which are specific to the companies involved. Pfizer (PFE), for example, was faced with some hard choices after taking some grievous hits in their advanced clinical pipeline, with the torcetrapib disaster being the intolerable last torpedo. Bayer ended up paying a lot more for their merger with Schering AG than they expected to (a merger that was surely going to involve some job losses even before the price went up). J&J, for their part, seems by their actions to believe that their future lies more in running fewer in-house programs and inlicensing more from other people.

And there are trends that affect everyone, on top of these local troubles. Low clinical research productivity at many big firms is proverbial, which is why some of these mergers and re-orgs are happening in the first place. In the preclinical world, a lot of routine (and some less routine) work is going overseas, which is no news to anyone. The changes in the industry are catching even really good scientists, so it’s definitely not safe to be doing an OK job on things that pretty much everyone else is doing. There aren’t any safe jobs in the business, and there haven’t been any for quite some time now, when you look back on it.

My belief is that we’re witnessing a broad shift in this country to a larger fraction of researchers being employed at the smaller companies. One thing that the US has which not many other places have imitated is our venture-capital culture. Our mechanisms for funding ideas are second to none in their speed and scope. Given that, I think that we may be heading into a world where drug research is broken down into smaller independent units – startups. These shops open up (and close down) with greater speed, and their successes and failures are likewise magnified.

Instead of Huge Company X moving along with some projects working really well and some dragging along, imagine each therapeutic area (or in extreme cases, each project) split out into a separate company. Some will work, some won’t, and some will move up and some will disappear. This affects the way these projects are run, naturally. In a smaller company, there’s more pressure to get something to the clinic (and the market), and at the same time there’s an increased willingness to take chances and try out new approaches to get there.

If this idea of mine is true, it means that we’re all, on the average, probably going to end up working for a longer list of companies than we might have planned on. (I already have!) It also means that the locations that have the best small-company culture will have a leg up, since they have access to a larger (and more easily accessed) pool of equipment, facilities, and potential employees. Keep in mind that this is the voice of someone who’s worked for larger companies, and is now working for a smaller one in Cambridge – but think about it.

Comments

[User 52183:]

Just to make sure I understand, are these new J&J cuts in addition to the 3,615 to 4,820 job losses they announced would begin in August (drugresearcher.com/new...) and run into 2008?

2007 Oct 05 10:36 AM

[sdjnj:]

User 52183 these are part of the announced job cuts. When the leadership closed the Mountain View site in July they said the remaining decisions about who would lose their jobs would be made no later than September.
I would disagree with the authors statement about JNJ relying on inlicensing more. At our drug discovery site the expectations are set at 5 NME per year with one coming from an inlicensing opportunity. Discovery as a whole is expected to transistion 4 compounds to late development per year with one of those for inlicensing. Most layoffs were because the focus of each discovery site was changed to allow more focus on one particular therapeutic area. Lastly I do agree with the author that discovery research will continue to shift to small biotechs. While this will lead to more risk for the individual chemist, it will also have the potential for more reward.

2007 Oct 06 11:22 AM

[quiact:]

You Have Now Been Sampled

While the pharmaceutical industry’s image and reputation has and appears to continue to suffer, added damage has expressed itself with costly patent expirations. Yet the big pharma task forces still insist that reps provide incredible value, and the more the better, as the drug reps are the givers of gifts, and reciprocity in the form of prescriptions just has to occur, as the samples reps dispense are around 20 billion a year, along with the reps themselves costing about 5 billion a year by the pharmaceutical industry. It is possible for prescribers to order samples on the internet to be delivered to their practice, but this remains rare presently
As a big pharma ex drug rep for over a decade, which during that period the number of drug reps actually tripled, the drug rep’s vocation has become more ridiculous, and possibly void of any true sense of accomplishment due to their customers preventing them from interaction or even presence in order for the drug reps to follow directives of the health care givers, and not their own employers, which is to influence their prescribing habits via direct dialogue along with the giving of gifts. The job has become nothing more than doing lunches and leaving samples at offices, for the most part. My perception formed from my own analysis of how drug reps operate in today’s environment in the medical community has led me to draw such conclusions, which I believe to be accurate.
So they may be named at times in different ways, these promoters will be referred to now only as drug reps, which number close to 100,000 in the U.S. presently to influence close to 1 million prescribers in this country, it is believed, yet is probably less now due to big pharma cutting thousands of reps recently. The cost to the pharmaceutical industry of these drug reps is around 5 billion dollars a year. Income for each rep grosses close to or above 100,000 grand a year on average, along with great benefits and a company car, as well as stock options as they gladly work from their homes and set their own hours, which I understand is much less than 8 hours a day.
The main function these days of drug reps, I believe, is primarily to offer doctors various types of inducements of a certain value that are not gifts, but bribes, by definition. The drug sampling of doctors may be considered an inducement, and a rather valuable one for the drug rep, as many believe that these samples are what ultimately influence the doctor’s prescribing habits over anything else, including statements from drug reps. This may be why the drug industry spends around 20 billion every year on samples. Yet I want to be clear on what I am saying: drug reps are some of the smartest people you will meet that do in fact have great paying jobs with great benefits. Most importantly and my opinion, I believe most reps really WANT to do well for their employers, yet are prohibited from doing so now because of how their employers are now viewed in their medical community.
Many years ago, drug reps have used their persuasive, yet ethical, abilities to influence the prescribing habits of doctors in an honest and ethical manner, as they focused on the benefits for the doctor’s patients with a particular drug that the detailer may promote to such a doctor. However presently, most health care providers now simply prevent drug reps to speak with them- now this is especially true when they are in clinic treating and assessing patients. More and more medical establishments are completely banning drug reps from their locations, and I speculate that this is occurring for many reasons, which may include the following:
The doctors lose money. Doctors are normally busy, so their time is valuable. As a drug rep, you are an incredible waste of their time. Yet they will accept your samples still. The credibility you possibly have thought you had and were perceived as such by doctors as a drug rep is no longer viewed to exist to any noticeable degree by the prescriber. For example and this is based on my experience and my colleagues, doctors view any information you may provide to them as biased and embellished. In my opinion, based on information and belief, their view regarding their assessment of you as a drug rep is accurate due to the statistical gymnastics the employers of drug reps engage in, which effectively and ultimately is permitting and encouraging the drug reps to lie to the doctor and likely are unaware of the statements stated by them are misleading. Doctors by their very nature seek answers objectively. And doctors do in fact find out about drugs through other methods besides the representative of the drug’s maker, such as the internet and experience with certain medications. Most drug reps in this country in particular mostly hire drug reps based on such qualities as the candidate’s looks as well as their personality, overall. Furthermore, it is possible that pharmaceutical companies desire their drug reps to be obedient and to not question what is asked of them. Upon speculation, this can be possibly determined by the background of the candidate, which may indicate they seek popularity as well as are money driven. In addition, most drug reps do not have degrees remotely related to any aspect of anything of a scientific or clinical nature.
During my decade as a drug rep, I would encounter on very rare occasion another rep that may have been a nurse or researcher, and this is concerning that others do not have similar backgrounds because the type of training necessary is rare for a drug rep. In fact, based on my opinion, many do not particularly care to acquire education related to such medical or clinical topics. They learn the basics in order to sell their promoted products. Yet anyone who has ever worked with doctors in a clinical setting, or in a hospital working in a clinical nature, likely they would agree that a drug rep should want to and seek all related to the complexities involved in the restoration of another’s health.
Many drug reps, it is believed, are void of any complete interest in medicine completely, and I believe this to be necessary. In addition, ethical considerations due to their possible deliberate ignorance created by the necessity of what they are required to say or do by their employers may be viewed as a disturbing fallacy as well. This allows them with the encouragement and coercion of their employer to embellish the benefits of their promoted products at times in addition to offering inducements to doctors in various ways- most of all of which are rather covert, yet performed and issued to select prescribers upon instruction of their employer. Examples may be creating a check from your company to a certain supporting doctor and handing this check to thank a doctor for supporting your company’s products for doing little if anything for your employer to justify this check. Or tangible items are given to such prescribers, such as TVs or DVDs which may or may not be utilized in a particular doctor’s office. It happens often, such activities.
From the drug rep’s perspective, it is unlikely they will even consider the possibility to question their pharmaceutical employer due to the great risk of losing income and benefits that they are unlikely to acquire at another place of employment. Because of their consistent and conscious effort to keep their high-paying jobs, the drug reps always appear overtly anxious to please their superiors- regardless of any ethics or legalities regarding any activity they may be required to perform. With big pharma in particular, each drug rep is given a variety of budgets, such as a chunk of cash for doctor office lunches that they are required to spend in a certain period of time. Another chunk of cash may be assigned to a rep to pay assigned or registered speakers of their employer to speak to other prescribers about a disease state related to the drug rep’s promoted product. These activities, in my time with big pharma, were never monitored or questioned by managers or superiors. What I did notice is that my annual raises were greater than others according to the amount I spent for that particular year, as this, according to a big pharma company, was a very objective and noticeable variable with securing and keeping your employment in big pharma.
While legally risky, the drug companies continue to dispense to their reps these large budgets their drug reps are in effect coerced to dispense with complete autonomy and possibly the spending can be fabricated, which is too complicated to fully explain. This design perhaps is why there are now various state and federal disclosure laws that are presently being considered to mandate the release of all funds dispensed from pharmaceutical companies as far as why a company’s funds were spent and for what reason or method. Because, according to the lobbyists of pharma companies, they consistently insist that whatever they spend always is for the benefit of public health. As mentioned earlier, presently such activities are quite covert. Yet if such laws are mandated, it is likely the accounting of pharma companies will become rather creative and incomplete. In summary, as a big pharma drug rep, my budgets were unlimited, and I typically spent more than I made though the activities I have mentioned so far. And this is not an isolated case. Historically, pharma lavished doctors with expesive gifts and trips. Now it is about funding for them, such as financial grants. Basically, the two remain synonymous and ethically conflicting.
Another issue is what is referred to as data mining. The American Medical Association sells this prescribing data on individual doctors to pharmaceutical companies or pharmacies, by providing others identifying numbers of a particular doctor, such as a state license number or DEA number, which allows them to track the scripts a doctor writes not far from real time availability. This data shows the volume of scripts of a particular doctor and what the doctor has been prescribing for the doctor’s patient for their disease state, and this data reveals competitor products to the drug rep as well. Aside from being deceiving and dishonest, the data allows a pharma company to ‘reward’ those doctors who support their products, while treating the other doctors with ‘neglect’, which means the non-supporters of a pharma company will not receive any inducement or remuneration from a particular pharma company. The data, by the way, only reflects numbers linked with particular products, and fortunately is free of patient names- this data that is provided to all drug reps. What has been described is the method typical with all big pharma companies, in my opinion, and I worked for three of them. It appears to be manipulative in a psychological paradigm- a combination of Pavlovian responses combined with positive and negative reinforcement.
So such methods create a toxic culture required to be absorbed by those members of such a pharma company. Furthermore, the tactics implemented by pharma companies vacuum the judgment of prescribers, which may prevent patients from receiving objective treatment. Yet on the most basic level, it is the samples left with prescribers that ultimately determine their prescribing habits- with various inducements to some doctors running close in second place. Yet remarkably, prescribers are prescribing more and more generics, which typically are not sampled to prescribers. I find this comforting that the manipulation efforts of the pharma industry are not as effective as they believe they are in a rather delusional way. Yet what is happening now in regards of branded meds vs. generic meds, insurance companies are flat out paying doctors to switch patients to a generic if one is available, as well as initiating generic medication treatment for their patients. I speculate they are paying doctors for this as a response of what pharma has been doing for quite a long time. From a clinical paradigm, if a medication is providing desired treatment and good tolerability for a particular patient, one could argue it would be unethical to switch treatment for financial gain, further complicated by the fact that most patients are aware that insurance company payments to doctors for this even occur.
It is likely and I believe that most drug reps are good and intelligent people who unfortunately are coerced to do things that may be considered corruptive to others in order to maintain their employment. In other words, the drug reps have compromised their integrity, ultimately.
It seems that external regulation is necessary to prevent the drug companies from allowing the autonomy of drug reps that exists, with their encouragement, which forces the reps to do the wrong thing for the medical community, possibly. Because it is obvious that internal controls with such corporations exist on paper often, but clearly are discouraged to be enforced. It is possible that these pharma companies falsely believe that being an ethical company would make them a company without excess profit. One can only speculate on their true motives. Yet it appears that overt greed has replaced ethics with this element of the health care system, which is the pharmaceutical industry, as illustrated with what occurs within these companies. However, reversing this misguided focus of drug companies is not impossible if the right action is taken for the benefit of public health. Likely, if there are no drug reps, there is no one to employ such tactics mentioned earlier. Because authentically educating doctors does not appear to be the reason for their vocation. This is far from being the responsibility of a pharmaceutical sales representative. Perhaps most frightening is that most drug reps fail to dig deep enough to realize that what they do at times may damage public health.

“Fear ensures loyalty.” --- Author unknown

Dan Abshear (what has been written is based upon information and belief).

2008 Jul 07 01:37 AM

[quiact:]

You Have Now Been Sampled

While the pharmaceutical industry’s image and reputation has and appears to continue to suffer, added damage has expressed itself with costly patent expirations. Yet the big pharma task forces still insist that reps provide incredible value, and the more the better, as the drug reps are the givers of gifts, and reciprocity in the form of prescriptions just has to occur, as the samples reps dispense are around 20 billion a year, along with the reps themselves costing about 5 billion a year by the pharmaceutical industry. It is possible for prescribers to order samples on the internet to be delivered to their practice, but this remains rare presently
As a big pharma ex drug rep for over a decade, which during that period the number of drug reps actually tripled, the drug rep’s vocation has become more ridiculous, and possibly void of any true sense of accomplishment due to their customers preventing them from interaction or even presence in order for the drug reps to follow directives of the health care givers, and not their own employers, which is to influence their prescribing habits via direct dialogue along with the giving of gifts. The job has become nothing more than doing lunches and leaving samples at offices, for the most part. My perception formed from my own analysis of how drug reps operate in today’s environment in the medical community has led me to draw such conclusions, which I believe to be accurate.
So they may be named at times in different ways, these promoters will be referred to now only as drug reps, which number close to 100,000 in the U.S. presently to influence close to 1 million prescribers in this country, it is believed, yet is probably less now due to big pharma cutting thousands of reps recently. The cost to the pharmaceutical industry of these drug reps is around 5 billion dollars a year. Income for each rep grosses close to or above 100,000 grand a year on average, along with great benefits and a company car, as well as stock options as they gladly work from their homes and set their own hours, which I understand is much less than 8 hours a day.
The main function these days of drug reps, I believe, is primarily to offer doctors various types of inducements of a certain value that are not gifts, but bribes, by definition. The drug sampling of doctors may be considered an inducement, and a rather valuable one for the drug rep, as many believe that these samples are what ultimately influence the doctor’s prescribing habits over anything else, including statements from drug reps. This may be why the drug industry spends around 20 billion every year on samples. Yet I want to be clear on what I am saying: drug reps are some of the smartest people you will meet that do in fact have great paying jobs with great benefits. Most importantly and my opinion, I believe most reps really WANT to do well for their employers, yet are prohibited from doing so now because of how their employers are now viewed in their medical community.
Many years ago, drug reps have used their persuasive, yet ethical, abilities to influence the prescribing habits of doctors in an honest and ethical manner, as they focused on the benefits for the doctor’s patients with a particular drug that the detailer may promote to such a doctor. However presently, most health care providers now simply prevent drug reps to speak with them- now this is especially true when they are in clinic treating and assessing patients. More and more medical establishments are completely banning drug reps from their locations, and I speculate that this is occurring for many reasons, which may include the following:
The doctors lose money. Doctors are normally busy, so their time is valuable. As a drug rep, you are an incredible waste of their time. Yet they will accept your samples still. The credibility you possibly have thought you had and were perceived as such by doctors as a drug rep is no longer viewed to exist to any noticeable degree by the prescriber. For example and this is based on my experience and my colleagues, doctors view any information you may provide to them as biased and embellished. In my opinion, based on information and belief, their view regarding their assessment of you as a drug rep is accurate due to the statistical gymnastics the employers of drug reps engage in, which effectively and ultimately is permitting and encouraging the drug reps to lie to the doctor and likely are unaware of the statements stated by them are misleading. Doctors by their very nature seek answers objectively. And doctors do in fact find out about drugs through other methods besides the representative of the drug’s maker, such as the internet and experience with certain medications. Most drug reps in this country in particular mostly hire drug reps based on such qualities as the candidate’s looks as well as their personality, overall. Furthermore, it is possible that pharmaceutical companies desire their drug reps to be obedient and to not question what is asked of them. Upon speculation, this can be possibly determined by the background of the candidate, which may indicate they seek popularity as well as are money driven. In addition, most drug reps do not have degrees remotely related to any aspect of anything of a scientific or clinical nature.
During my decade as a drug rep, I would encounter on very rare occasion another rep that may have been a nurse or researcher, and this is concerning that others do not have similar backgrounds because the type of training necessary is rare for a drug rep. In fact, based on my opinion, many do not particularly care to acquire education related to such medical or clinical topics. They learn the basics in order to sell their promoted products. Yet anyone who has ever worked with doctors in a clinical setting, or in a hospital working in a clinical nature, likely they would agree that a drug rep should want to and seek all related to the complexities involved in the restoration of another’s health.
Many drug reps, it is believed, are void of any complete interest in medicine completely, and I believe this to be necessary. In addition, ethical considerations due to their possible deliberate ignorance created by the necessity of what they are required to say or do by their employers may be viewed as a disturbing fallacy as well. This allows them with the encouragement and coercion of their employer to embellish the benefits of their promoted products at times in addition to offering inducements to doctors in various ways- most of all of which are rather covert, yet performed and issued to select prescribers upon instruction of their employer. Examples may be creating a check from your company to a certain supporting doctor and handing this check to thank a doctor for supporting your company’s products for doing little if anything for your employer to justify this check. Or tangible items are given to such prescribers, such as TVs or DVDs which may or may not be utilized in a particular doctor’s office. It happens often, such activities.
From the drug rep’s perspective, it is unlikely they will even consider the possibility to question their pharmaceutical employer due to the great risk of losing income and benefits that they are unlikely to acquire at another place of employment. Because of their consistent and conscious effort to keep their high-paying jobs, the drug reps always appear overtly anxious to please their superiors- regardless of any ethics or legalities regarding any activity they may be required to perform. With big pharma in particular, each drug rep is given a variety of budgets, such as a chunk of cash for doctor office lunches that they are required to spend in a certain period of time. Another chunk of cash may be assigned to a rep to pay assigned or registered speakers of their employer to speak to other prescribers about a disease state related to the drug rep’s promoted product. These activities, in my time with big pharma, were never monitored or questioned by managers or superiors. What I did notice is that my annual raises were greater than others according to the amount I spent for that particular year, as this, according to a big pharma company, was a very objective and noticeable variable with securing and keeping your employment in big pharma.
While legally risky, the drug companies continue to dispense to their reps these large budgets their drug reps are in effect coerced to dispense with complete autonomy and possibly the spending can be fabricated, which is too complicated to fully explain. This design perhaps is why there are now various state and federal disclosure laws that are presently being considered to mandate the release of all funds dispensed from pharmaceutical companies as far as why a company’s funds were spent and for what reason or method. Because, according to the lobbyists of pharma companies, they consistently insist that whatever they spend always is for the benefit of public health. As mentioned earlier, presently such activities are quite covert. Yet if such laws are mandated, it is likely the accounting of pharma companies will become rather creative and incomplete. In summary, as a big pharma drug rep, my budgets were unlimited, and I typically spent more than I made though the activities I have mentioned so far. And this is not an isolated case. Historically, pharma lavished doctors with expesive gifts and trips. Now it is about funding for them, such as financial grants. Basically, the two remain synonymous and ethically conflicting.
Another issue is what is referred to as data mining. The American Medical Association sells this prescribing data on individual doctors to pharmaceutical companies or pharmacies, by providing others identifying numbers of a particular doctor, such as a state license number or DEA number, which allows them to track the scripts a doctor writes not far from real time availability. This data shows the volume of scripts of a particular doctor and what the doctor has been prescribing for the doctor’s patient for their disease state, and this data reveals competitor products to the drug rep as well. Aside from being deceiving and dishonest, the data allows a pharma company to ‘reward’ those doctors who support their products, while treating the other doctors with ‘neglect’, which means the non-supporters of a pharma company will not receive any inducement or remuneration from a particular pharma company. The data, by the way, only reflects numbers linked with particular products, and fortunately is free of patient names- this data that is provided to all drug reps. What has been described is the method typical with all big pharma companies, in my opinion, and I worked for three of them. It appears to be manipulative in a psychological paradigm- a combination of Pavlovian responses combined with positive and negative reinforcement.
So such methods create a toxic culture required to be absorbed by those members of such a pharma company. Furthermore, the tactics implemented by pharma companies vacuum the judgment of prescribers, which may prevent patients from receiving objective treatment. Yet on the most basic level, it is the samples left with prescribers that ultimately determine their prescribing habits- with various inducements to some doctors running close in second place. Yet remarkably, prescribers are prescribing more and more generics, which typically are not sampled to prescribers. I find this comforting that the manipulation efforts of the pharma industry are not as effective as they believe they are in a rather delusional way. Yet what is happening now in regards of branded meds vs. generic meds, insurance companies are flat out paying doctors to switch patients to a generic if one is available, as well as initiating generic medication treatment for their patients. I speculate they are paying doctors for this as a response of what pharma has been doing for quite a long time. From a clinical paradigm, if a medication is providing desired treatment and good tolerability for a particular patient, one could argue it would be unethical to switch treatment for financial gain, further complicated by the fact that most patients are aware that insurance company payments to doctors for this even occur.
It is likely and I believe that most drug reps are good and intelligent people who unfortunately are coerced to do things that may be considered corruptive to others in order to maintain their employment. In other words, the drug reps have compromised their integrity, ultimately.
It seems that external regulation is necessary to prevent the drug companies from allowing the autonomy of drug reps that exists, with their encouragement, which forces the reps to do the wrong thing for the medical community, possibly. Because it is obvious that internal controls with such corporations exist on paper often, but clearly are discouraged to be enforced. It is possible that these pharma companies falsely believe that being an ethical company would make them a company without excess profit. One can only speculate on their true motives. Yet it appears that overt greed has replaced ethics with this element of the health care system, which is the pharmaceutical industry, as illustrated with what occurs within these companies. However, reversing this misguided focus of drug companies is not impossible if the right action is taken for the benefit of public health. Likely, if there are no drug reps, there is no one to employ such tactics mentioned earlier. Because authentically educating doctors does not appear to be the reason for their vocation. This is far from being the responsibility of a pharmaceutical sales representative. Perhaps most frightening is that most drug reps fail to dig deep enough to realize that what they do at times may damage public health.

“Fear ensures loyalty.” --- Author unknown

Dan Abshear (what has been written is based upon information and belief).

2008 Jul 07 01:37 AM