More Good News - R&D Investment by U.S. Biopharmaceutical companies is up

Fierce Biotech reports here that:

Despite a fragile economy, America's pharmaceutical research and biotechnology companies invested a record $65.3 billion last year in the research and development of new life-changing medicines and vaccines - an increase of more than $1.5 billion from 2008, according to analyses by the Pharmaceutical Research and Manufacturers of America (PhRMA) and Burrill & Company.

The article goes on to say:

While companies have been forced to make difficult business decisions, research spending as a percentage of sales remained high in 2009. Over the past nine years, America's pharmaceutical research companies have consistently invested around 18 percent of domestic sales on R&D activities.

Again, while the industry is still experiencing dynamic change, at least there are still some positive trends that we anticipate will help to set the stage for future growth within the Pharma industry.

Good News / Bad News for Pharma

Interesting blog post here entitled "Pharma Layoff Stats Show the Glory Days of Drugs Won't Be Coming Back". The post details the number of layoffs the industry has been experiencing.

While the news has been bleak for the industry, the worst may be behind us.

John A. Challenger, CEO of Challenger, Gray & Christmas, a major Outplacement Consulting Firm says:

"… there is an overall sense that we have turned a corner. With downsizing showing dramatic signs of stabilization, chances are good that increased job creation is approaching."

Mr. Challenger is also quoted as saying:

“We are seeing more job cuts related to business strategy, as opposed to cuts stemming from recessionary pressure. In other words, we expect cuts from mergers and acquisitions or from companies shifting focus from one business area to another.”

My opinion is this....the Pharmaceutical industry is in the midst of a significant contraction.
And the future of the industry may appear bleak.
HOWEVER....there is some truth to the saying that it is always darkest before the dawn.
What the industry is experiencing now is a major shift in its business model.
The old "Blockbuster" model under which the major Big Pharma firms achieved their dominance is no longer valid.
So the industry is changing. And change...even if it is for the good...is not always easy.

Bottom line....I tend to be a contrarian. Any time I hear the 'experts' all lining up in agreement with regards to any topic....I believe that in most instances...over time....the exact opposite will occur.
For example...when I became a Recruiter almost 20 years ago....I remember reading articles about how the Pharmaceutical Industry was bullet-proof. There appeared to be no end in sight for the dominant Big Pharma companies. The stock pickers on Wall Street claimed Big Pharma was recession-proof. They claimed the good times would never end for Big Pharma. The joke was as long as there was Disease...Big Pharma companies would always be extremely profitable.
And at that time...it appeared these companies would rule the Pharma landscape forever.

But things change. Industries change. Companies change. The world changes.

Now we hear the Pundits claiming that not only is Big Pharma in trouble...but the entire industry is in jeopardy. These same 'experts' are now touting the demise of the industry.

I could not disagree more.

I never believed the claims that the industry was bullet-proof. And I certainly don't agree with the predictions of the industry's demise. Like most things the truth lies somewhere in the middle. There will continue to be change. There will continue to be some 'pain'. But the industry will re-emerge...looking differently....but still in a position to thrive in the future.
And for people who love Science....love solving challenging problems...and relish the prospect of being in a position to help improve the lives and health of other human beings....the Pharmaceutical industry will still be a wonderful industry to work in.