Fierce Pharma reports a steep drop in Pharma industry employment in the USA in an article today (Biotech payrolls boom along with sales, while Big Pharma jobs keep disappearing - Tracy Staton). "The pharma industry saw employment drop to 277,113 in 2013 from 291,795 in 2003, the Philadelphia Inquirer reports, citing data from the Bureau of Labor Statistics. But biotech employment grew to 142,475 from 135,424 from 2007 to 2013".
This is not news in Europe where consolidation has seen traditionally large companies shrink their headcounts especially in those areas where more nimble outsourced partners can offer flexible solutions. Most especially seen in sales early on, the trend has increased in areas such as regulatory services and more recently into R&D.
The top 10 pharma companies had 29,720 fewer employees at the end of 2013 than at the end of 2012, according to FiercePharma research in the USA. A more pertinent question is what are core numbers of employees supporting pharma from across CRO/CSO and virtual and connected SME's and start-ups.
The old adage that the big eat the small has never been more true. The last 2 years of Pharma M&A has been staggering and the lofty valuations of Biotech companies especially point to a positive future for small cap pharma as long as money remains cheap and interests rate are low.
In medical devices the Medtronic acqusition of Covidien has taken one acquisitive beast from the field and replaced it with a behemoth. Omar Ishrak has quite a task to integrate and streamline two such large organisations without loss of focus and momentum. These megamergers are a boon to advisors and sometimes investors. Rumours that Pfizer may try to acquire GSK after failing to acquire AZ in the recent past will not sit with well with UK politicians and researchers. The nature of mergers which require the deployment of lots of capital is that the financial returns which are the catalyst for the transaction, are also the mathematics that drives "synergies" of 30%-50%. For synergies read people and processes who become redundant.
One can't stop business but one can be busy protecting oneself. Stay current, stay agile and stay up to date. If you work in or near the Pharma and medtech business, chances are in this climate if you are mid cap and growing there's a bear in the woods who wants to get friendly.