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Will the global economic crisis affect your job? BioPharm International's third annual salary survey finds out.
It is a time of change, not only for the finance and automobile markets, but also for the pharmaceutical and biopharmaceutical industries. Even before the downturn in the world economy, drug makers were already facing big challenges, including drug safety, patent expirations, and dwindling pipelines, and had started restructuring and conserving costs. The year 2008 witnessed a constant stream of job cuts in the pharmaceutical sector, including layoffs at Merck (8,400 jobs), Schering-Plough (5,500 jobs), Wyeth (5,000 jobs), UCB Pharma (2,000 jobs), and Abbott (1,000 jobs). There has been a slew of job cuts at small- and medium-sized biotechs as well.
During such times of change, almost everyone, at every level of the biopharmaceutical industry, is asking questions such as, "What is the general outlook for the industry?" or "Will employment opportunities decrease in the future?" and "How will the economic downturn affect me?" Besides charting the current trends in salaries—including the gender gap—in the biopharmaceutical sector, BioPharm International's third annual salary survey explores these questions and more generally, finds out how secure biopharmaceutical professionals are feeling in their jobs.
The salary survey was conducted by BioPharm International's corporate research department in the fall of 2008. The survey was emailed to 24,417 readers around the globe and generated 593 responses. To encourage participation, all subscribers who responded to the survey were entered into a drawing to win one of five $100 gift cards. The maximum statistical error of the survey, at a 95% confidence level, is +4.2%. (Some percentages may not add up to 100% because of rounding.)
The vast majority (64%) of survey respondents are from the US. Another 19% are from Europe, 8% are from India, and 5% are from Canada. About half work in publicly traded companies, 37% in privately held firms, 5% in academic institutions, 5% in government, and 2% in nonprofit organizations. About 1% of respondents are self-employed.
A little more than a third (37%) of respondents work in biopharmaceutical manufacturing companies, 15% in small-molecule pharmaceutical companies with a biotech focus, 7% in contract manufacturing, and 7% in research institutes (Figure 1). Most of our respondents work in fairly large companies: 50% work in companies with 1,000 employees or more, and another 10% work in companies employing between 500 and 1,000 people.
Despite the current economic scenario, biopharmceutical professionals continue to earn good salaries. "The pay is excellent in the biopharmaceutical sector when you get into specialized skills," says Stephan Krause, director of quality at MPex Pharmaceuticals and a member of BioPharm's Editorial Advisory Board, who started this new job only a month ago after leaving a small biotech that went under. "With the number of unemployed people in the job market, your negotiating power during a job interview might be less, but the salaries haven't gone down," he says.
As shown in Figure 2, the mean industry salary is $89,760 in the United States, and €62,721 (approximately $85,927, converted at an average exchange rate over 2008 of €1=$1.37) in Europe. In the US, 37% of respondents earn more than $100,000 and 23% earn between $75,000 and $100,000. The salary breakdown among European respondents was similar: 39% earn more than €70,000 ($95,900) and 23% earn between €50,000 and €70,000 ($68,500 to $95,900).
Like last year, this year's survey showed that the US biotech jobs with the highest salaries included corporate management, information technology, legal, and plant engineering (Figure 3). And job opportunities are relatively good in the biopharmaceutical sector, especially at the higher levels, says Krause. In particular, he sees a lot of opportunity in the areas of quality and regulatory affairs. "Those two areas are going to be in great demand because regulations are becoming more complex with lot of outsourcing now being done in development," he says.
With the monoclonal antibodies market projected to grow to $12 billion by 2010, industry experts think that job opportunities will continue to rise in the coming years even if opportunities in the traditional pharmaceutical sector don't keep pace. "The biopharmaceutical sector has more opportunities compared to small-molecule companies," says a senior professional employed at a large pharmaceutical company. "It is simple mathematics—just compare the number of small-molecule drugs to large-molecule drugs in the pipeline."
A closer look at the list of job cuts by big companies this year shows that it's mainly Big Pharma, not the big biotech companies, that have downsized this year. Most experts, however, believe this is unrelated to the slow economy, seeing the causes in the industry itself, in such as drug failures, drug safety concerns, and dwindling pipelines. With many blockbuster drugs lined up to come off patent in 2010, Big Pharma is stepping up efforts to save costs and invest in large-molecule drugs.
Of course, the biotechnology industry is not immune to the economic downturn. Small biotech companies, which depend on investors for cash, are struggling to get funding amid the credit crisis. These companies are rapidly restructuring as a result of the negative capital markets, says Steven Burrill in his column ("Burrill on Biotech" p. 26). "Staff is being reduced and many R&D programs have been put in the refrigerator until better times prevail."
For the most part, however, large biotechs have been able to withstand the financial market's meltdown so far. "It could be because the big biotechs' financial strength is tied more to their product portfolio than the stock market," says a senior process development manager, who has worked with small and large biotech companies during his 15-year career.
Recruiters have also seen fairly consistent activity in the biotech sector. "The larger biotech companies that we work with are still hiring," confirms Pete Ferguson, president of health and life sciences for Yoh, a recruitment company that provides contract employees to the pharmaceutical sector.
In this time of threats and opportunities, are biopharmaceutical professionals feeling secure in their jobs? Overall, our respondents feel secure in their jobs. Seventy-one percent (71%) of respondents said they feel "secure," "very secure," or "extremely secure" in their current jobs (Figure 4).
This sense of security continues despite the fact that, like last year, 54% have been through a merger, acquisition, or downsizing within the last two years. Perhaps the secure feeling remains because only 7% were laid off as a result of such corporate upheaval, and 48% said they were unaffected by the process (Figure 5). The rest either said their job responsibilities changed (38%) as a result of a merger or downsizing activity or that they chose to leave their companies voluntarily (8%).
A global quality control manager with 20 years of experience, currently employed at a leading Big Pharma company, feels more secure now because his company is trying to transition from small-molecule drugs to biologics. "There is a new initiative to become the next-generation biopharma, so I feel secure," he says.
Most respondents also feel their academic background has served them in their current job functions: 50% say their education prepared them extremely well or well, and 38% say it prepared them adequately. Job experience has proven more valuable: 74% of respondents say their employment experience prepared them extremely well or well for their current role; another 22% say it prepared them adequately.
Most respondents also work for companies that support their continued professional development: 75% say their organizations pay for them to attend conferences; 74% say the same for in-house training; and 73% attend outside courses or workshops.
The above are perhaps some of the reasons why biopharmcaeutical professionals are feeling secure even in these times of economic insecurity. A broad portfolio of products is keeping the big biotechs financially strong and in a position to recruit people. Bill Bennett, senior director of science and policy assessment at Genentech says, "Our business is actually doing pretty well and the economy isn't threatening it very much at the moment."
"The economy has made the market more robust for a big biotech because of good molecules being available," says John K. Towns, director of global CMC regulatory affairs at Eli Lilly and Company. The big companies are benefiting from this economy, Towns says, because they have the money to buy small biotechs with new compounds at low prices and move these forward in the pipeline.
Although the big biotechs are generally sheltered from the current economic crisis, the same can't be said about the small biotechs that are struggling to survive as the venture capital funds that drive these companies are drying up. Job security is therefore down at cash-hungry small biotechs as they continue to make wholesale layoffs in a desperate attempt to stay afloat.
In fact, as we went to press, representatives from the US biotech industry, supported by the Biotechnology Industry Organization (BIO), were planning to meet with the members of Congress to ask for a temporary change in the tax law that would let money-losing companies get cash from the government now, in exchange for tax credits they would pledge not to take if they eventually became profitable. The change, if approved, could enable the industry to receive potentially hundreds of millions or even billions of dollars.
Bader, who has worked for three large pharmaceutical and three small biotech companies, says the insecurity at small companies is balanced by a greater sense of personal control. "In a small biotech, the security equation is rather simple. You look at how much cash the company has, what the burn rate is, and you can calculate how many months it can survive before the next financing period," he says. "The small biotechs carry more risk, but you feel more empowered as you understand the risks and how you can affect them."
So are biotech professionals still confident enough to risk job changes in this turbulent economic climate? The majority of respondents (60%) said they are not likely to leave their jobs in the next 12 months, compared to 40% who said they are likely to leave their jobs. As shown in Figure 6, for those who expect to change jobs, the most common reasons would be a job offer with better salary (29%), a job offer with more satisfying work (16%), or a geographic move to a more desirable location or for family reasons (10%). About a quarter (27%) cited involuntary reasons.
From the recruitment point of view, Ferguson, the recruiter, thinks biopharma remains a good career choice. "Typically, the life sciences industry has been a little more recession-proof than other industries. I think it is going to continue to be a very strong industry," he says. "As far as anyone coming out of college, I would certainly recommend it for a career as the demand is still there," he adds.
Levine echoes Ferguson's words. "The industry has been through lots of ups and downs, but overall it is a strong industry with a lot of prospects, he says. "For somebody who is interested in medicine and biology, it is certainly a career I would encourage them to pursue."
Overall, a career in the biopharmaceutical industry is satisfying for most of our survey respondents (Figure 7). The vast majority (89%) of our respondents are satisfied with their jobs, with more than half of those (47% of the total respondents) describing themselves as "extremely satisfied" or "very satisfied" with their jobs. "I still get up in the morning and feel energized and great about my job," said one project manager. Krause agrees. "There is a lot of good science being done in this industry," he says. "I would suggest a career in this industry," he says. "It is rewarding and exciting."
"With over 30 years in healthcare, one learns that the industry and economy naturally cycle between expansion and contraction," says Bader. "We all generally feel rather secure during expansion and insecure during contraction. I doubt that this will ever change." Thus, Bader believes leading companies will continue to focus on recruiting a talented and diverse workforce and recognize the need to create growth opportunities, excitement, and recognition in the workplace. "These trends have steadily increased over the past three decades and will likely continue in the future, leading to more empowered and highly skilled employees."
Is Biotech a Mans World?
Chitra Sethi is the managing editor of BioPharm International, 732.346.3059, firstname.lastname@example.org