Wednesday, December 18, 2013

From your keyboard to God's ears, Luke Timmerman

In an article titled "12 things the pharma industry can do to rebuild real public trust", a rather inspiring section here:
7. Invest in your own employees. The biomedical industrial complex has educated lots of young graduate students and postdocs over the past decade, during the boom in NIH funding from the late-90s to the early 2000s. Many of these people are stuck with no job prospects, because they can’t get the precious few faculty gigs at cash-strapped universities, and most haven’t gotten all the training and mentoring they need to be relevant for jobs in industry. Ethan Perlstein, a former Princeton University postdoc who struck out recently on his own as an independent scientist, has referred to this phenomenon as the “postdocalypse.” This is a huge recruiting opportunity for pharma, to snap up lots of bright people at entry and mid-levels and train them for long careers in industry.  
Instead, you just see wave after wave of layoffs in R&D, as companies seem to be almost throwing in the towel on all their good medicinal chemists, molecular biologists, biochemists, and more. It’s short-sighted, and unfair to those people. This isn’t a poverty-stricken industry like my former world of newspapers, which can’t afford to hire people. Pharma can and should do this for its long-term survival.
The bit about the difference between the newspaper industry and pharma industry is really true. There have been no disruptive technologies that have annihilated pharma's revenue sources, and yet, the layoffs continue... 


  1. The problem with pharma is that the people who invested in it, for various reasons (retiring soon + no/diminished pension + poor portfolio yields, expected higher yields despite the "past performance is no guarantee of future performance", want to loot and run while the looting is good) want their money back, or don't want to invest more if they can't get the yields they want from it. The people running pharma have stock incentives and obvious reasons to listen to investors, and since the long-term is a long time away (and they don't expect to be around for it, at least there), their choices are obvious.

    What businesses does the US have that are 1) making useful products and 2) thinking about the future? I don't think the "show me the money now, and I don't care about the future" phenomenon is limited to pharma - we seem to have decided as a society that doing good and useful things is too expensive and doesn't provide returns we care about, and so this is what we get. Maybe as individuals, too. I assume that part of it is that they don't trust institutions enough to assume that their sacrifices/investments will go towards a comon good rather than someone else's pockets, or that others will help.

  2. I invested my retirement money in both PFE and MRK in the late 1990s. I am patient money, an investor not a trader and am still underwater in those investments 15 years later (not counting dividends). I do not know what you are talking about because whatever these jokers are doing with the money it is not rewarding the long term investor. I even had to pay for the animal health shares I already owned when that group was spun out of PFE. This is a dying business model. I wish these companies would liquidate or sell out to some foreign entity and give me something for my retirement.

  3. I can sort of see your point...

    I think someone's benefiting from it in the short term, though - I don't layoffs benefit management in the way mergers do. The stock performance might mirror the lack of productivity, which isn't helped by the "death in bits" strategy. (IPharma might be analogous to someone who lives off of investments; eating the principal increases yield demands on it to the point that they can't be reached, forcing more cashing out and increasing the problem.)

    At this point, though, I wonder if liquidating it all wouldn't be best - the way pharma is shrinking now helps a few fortunate ones, while liquidating would at least benefit all the shareholders, and might put the money in the hands of better people. If you're not going to get started living, then you'd better get started dying.

  4. Well, the only way these companies can higher post-docs is if they do get rid of the mid-career scientist types, unless the company is expanding.

    Then again, with profit margins for big pharma always huge, I have trouble understanding their employment behavior: why CAN'T they hire more post-docs even at the cost of a cut from an 18% yearly profit margin?