Monday, January 27, 2014

Lilly's John Lechleiter and PhRMA's John Castellani on pharma layoffs: no good answers for ScienceCareers' Beryl Benderly

This past week, the Pharmaceutical Research and Manufacturers of America held a "STEM Saves Lives" event (don't click on the link until you want an autoplay of the video to start) in conjunction with U.S. News and World Report. It was held to flog a new report from Battelle on what pharmaceutical companies are doing in terms of STEM education. The report is pretty mundane, with very little new substantive information (despite what USNWR's Brian Kelly has to say about it.) The real core of the report is that PhRMA members are donating time and money to STEM education. Here's my summary of the report:
  • America needs STEM! There are lots of STEM jobs! 
  • America sucks at STEM education. 
  • Pharma knows this! 
  • Pharma is sending its people and spending its money into the classrooms to Get! Kids! Excited! about STEM. 
For what it's worth, it's a worthwhile endeavor. I'm all in favor of K-12 STEM ed, no matter what form it takes. 

But what I have a real problem with how the main speakers of the event, John Lechleiter (CEO of Eli Lilly) and John Castellani (the CEO of PhRMA) justify their efforts. There's a lot of talk about how STEM jobs are the future (true, but relatively speaking, they're not in pharma. They're in health care and in technology and engineering.) There was a lot of talk about how the teachers of America suck at getting kids interested in STEM (hey, if you have better ideas than "we need to get kids excited" I'm all ears.) There was a wonderful bit where Dr. Lechleiter said that kids don't want to go into STEM because it's hard -- nothing quite like impugning the moral fiber of American kids for compelling analysis. 

But the highlight of the event had to be ScienceCareers's Beryl Benderly asking John Lechleiter and John Castellani, "Um, why did you have all these layoffs in the past decade, if you guys need STEM workers like crazy?" Here is her summary of the event. She asked a tough question and got absolutely horrible answers. They boil down to "Who are you going to believe, me or your lying employment numbers?" The audio is above.

[Does John Lechleiter really see Lilly as "the only one left standing"? I feel that this is a very unusual comment, but I can't put my finger on it. Also, I think it's ridiculous to assert that the layoff statistics do not account for the growth in the biological side of the house; maybe I'm wrong.]

Also, I've appended in the audio box (press the fast forward button) John Lechleiter's desire to have access to "the global talent pool" and that if Lilly can't get a visa for anyone they want to hire, it's "a disaster" for Lilly and for the scientist.

I transcribed Dr. Lechleiter's answers and Mr. Castellani's answers to Beryl Benderly below the jump, as well as Brian Kelly's (the editor of USNWR) comment as well. Trust me, they're completely unimpressive. If this is the blather that our business/media elites have to serve, we're in real trouble.

Beryl Benderly: Hi, I'm Beryl Benderly of Science Careers of Science Magazine. There have been very large layoffs in the pharmaceutical industry in recent years and many highly-skilled scientists and mid-level technical people are no longer with the pharmaceutical companies and many of them are no longer in those fields because they can't find work. That's seems... somewhat at variance with an idea that there's a skills gap? or a shortage of skilled people. Please explain.

Brian Kelly (editor of US News and World Report): Wanna try? 

John Lechleiter (CEO of Eli Lilly and Company): I think the industry's being reshaped. We have a map within Lilly and you probably have a similar thing at Science where we sort of plot it out, all the pharma companies that were around in 1980 and then went through all the various permutations combinations et cetera and Lilly's the only one left standing. I mean, we're the only company in the last 30 years that's not either gone away or merged or changed names or combined. Time will tell if that's the right thing. Okay? But there's no doubt you're seeing the emergence of large biotech, so you have a Gilead, you have a Vertex, you have a Biogen-Idec in addition to a Genentech and an Amgen. And I think what we miss sometimes by looking at employment numbers which have fallen in total for what you call Big Pharma in recent years is all the activity that John talked about in the biosphere around us. 

So we're working with dozens probably hundreds of partners, organizations doing everything from running clinical trials to providing us with discovery chemistry researchers that are typically run and operated and staffed by people who've had prior Big Pharma experience. I was out last week at the J.P. Morgan conference, sort of the Woodstock of the biopharma industry and the people out there who were starting companies, who were looking for venture capital money, who have things that they want to license to us, they're by-and-large people who've come out of the large company experience, they've learned from that and now they're creating value as entrepreneurs, so overall, I'm rather optimistic about the situation because I think the life sciences are just so well-disposed today for us to be discover and develop these new medicines. But there's no question the structure has changed a lot. 

John Castellani (CEO of PhRMA): Just to add to what John said, I'd look at a different measure because if you look at just employment, you don't see what disciplines are rising or falling, so you have to look at that and you don't see the broader ecosystem as it becomes more and more distributed. What I look at is what's the level of investment in research and development. And in our little corner of the world, our 31 companies continue in about the same level over the last 5 years at about 50 billion dollars a year of investment in research and development... 49 and a half billion, I missed it by half-a-billion bucks. It's about 20 percent of the revenue that the companies generate. So that has stayed at a very very high level, the highest level of any other sector of the economy. And the National Science Foundation tells us that in our industry, we do about 20% of all of the research and development that is funded by industry in the United States. So when you talk to our leaders, John's counterparts in our industry and you ask them, long-term, what are you concerned about? High on that list is still the talent across the ecosystem as well in their own companies to be able to develop those therapies. 

John Lechleiter (CEO of Eli Lilly and Company): I think the one other comment I would make is that I think we gotta be careful that our thought process is not just around what we have today. When I decided to go to graduate school in 1975, I had lots of people, including people employed in the field who said, "Are you crazy? They're layin' off chemists." This was the end of the polymer hiring thing and chemists were losing their jobs in the recession of the 70s and my view was, this is something that I want to do and I think it's exciting. I reckon after 4 years of grad school, the economy might look a little different. What developed about that same time? Biotechnology! So a whole new era grew out of findings in the Seventies and today, biotechnology is at least on par if not beyond exceeding the traditional chemistry technologies you find in our industry. Organ replacement, stem cells, what are all the things that we dream about or think about that could develop as industries down the road? To take on the tech side, you have IBM and Apple twenty years ago. You have Google now, Facebook. Where did that come from? Could any of us have envisioned that ten or fifteen years ago. I think this is about creating new things in addition to sort of helping the existing framework operate better. 

Brian Kelly (editor of US News and World Report): As an aside, I hear that about other industries, it's sort of a forest for the trees question. Defense, high tech, on any given day, there are people out of work. But -- where's the trend line going? Again, 19 of our top 20 jobs which we are looking at projections are STEM capabilities. 


  1. IF USNWR report is looking at projections for STEM fields, what do the salary trends look like? If the salary trends aren't upward, then those stinkin' employment numbers aren't the ones lying here.

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  3. The fact that this took place in Washington leads me to believe that the pharma companies and their trade association were primarily focused on influencing the Washington media and (especially) influencing those involved in science policy, be they think tanks, government personnel or members of Congress and their staffers. One wonders, what does pharma want in return for their 'feel good' STEM education initiative? Better tax breaks? Immigration reform that benefits them? Less scrutiny/criticism from the media or Congress?

    Kudos to Beryl Benderly for asking a tough question. I bet it was one that Lechleiter and Castellani weren't expecting. Hopefully the others in the room took note of her points, and weren't too bowled over with the non-responses from the two men.

    I see that one of the panelists for this conference is a person from Cubist. Isn't that the company that runs strange ads on the ACS job board?

  4. There is plenty of "talent" when it comes to medical doctors, pharmacists, dentists, optometrists, etc. People go into those field because there are jobs, stability, and because those jobs actually pay.

    Props to Ms. Benderly for asking the hard question.

  5. EliLily saying they employ foreign graduates is not true either. I have people of foreign origin, who were PhD trained within the US or Europe (UK/France/Germany), pursued post-doctoral training in Europe and US and yet when they apply for positions, they often encounter a statement saying EliLily will not be able to obtain sponsor visa.

    So, they dont consider foreign candidates, they say there aren't US candidates...who are they actually employing? If companies do not invest in employing US/global candidates, this is drastically impact science of the future and drug development and an entire working generation will be lost.

    Concentrating on profits should NOT always be the driving force especially at hard times. Think big and think of the future.


looks like Blogger doesn't work with anonymous comments from Chrome browsers at the moment - works in Microsoft Edge, or from Chrome with a Blogger account - sorry! CJ 3/21/20