Home > Critical Thinking, Current Affairs, Dystopia, Musings, Philosophy sans Sophistry, Reason, Secular Religions, Skepticism > On the Poor Career Prospects for People with Postgraduate Degrees : 2

On the Poor Career Prospects for People with Postgraduate Degrees : 2

In the previous part of this series, I went into some detail about the careers of those who studied or worked alongside me during my MSc. To make a long story short, the majority are either no longer involved in scientific research or have menial unstable jobs with some vague connection to what they studied or used to do for a living. Some of you might say that this is to be expected since the biomedical sciences produce many times more graduates than the number of available jobs. While that may be true now, it wasn’t always the case. Indeed, until the early 1990s, those who studied or worked in that sector could either find decent to acceptable jobs or simply move into related areas with considerable ease.

Now let us now talk about another sector which, for over 50 years, provided highly stable, well compensated and intellectually engaging employment. I am talking about pharma. From the end of WW2 in 1945 to mid-1990s, pharmaceutical corporations (large and medium) provided some of the best and most interesting jobs and careers in western countries. And it worked both ways, since those who worked in them came up with the most important advances in medicine we have ever seen. There is a very good reason why this period is often referred to as the ‘golden age’ of drug discovery. And then it started going wrong and is now a mere shadow of its former self. Years ago, I linked to a spoof by somebody else about how things went to shit in pharma.

To be fair, this fall was not instantaneous and it was only after 2008 that the whole sector was irreparably damaged. But ya.. things had been on a downward slope since the mid-1990s. In retrospect, the true beginning of end started in late 1980s, when certain large corporations (Pfizer, Merck etc) decided to recruit ivy-league MBAs. The first signs of this rot manifested as gradual consolidation within that sector. While I could write multiple books on why consolidation in the pharma sector was so disastrous, here is the very brief version. Monopolization and oligopolization always results in counterproductive centralization, destruction of real innovation, greatly increased rent-seeking and is bad for everyone other than the upper management of those corporations in addition to their lawyers and bankers.

It should be noted that corporate monopolization has been much more disastrous in the West than Asian countries because corporations in the later are answerable to their governments to an extent unimaginable in the former. But why are we talking about how the pharma sector used to be about 20 years. Well.. because it is relevant to my choice of career. One of the main reasons for me taking the educational path I took was that working in pharma was an excellent career option with long-term stability and a pretty decent work environment. Sure.. nothing is perfect, but for someone with my interest and talents, it was as good a match as realistically possible.

Also, the pharma sector used to be fairly conservative in both hiring and firing people. Until early 2000s, mass layoffs and multiple site closures for the purpose of “corporate reorganization” were unknown in pharma. Many larger corporations even had defined benefit pensions until mid-2000s. Yes.. you heard that right. To make a long story short, those who stayed out of corporate politics and had generally satisfactory job performance could reasonably expect lifetime employment, and this was widely expected by employers and employees right upto early 2000s. You were not expected to work beyond normal work hours unless necessary due to nature of experiments and there was tons of autonomy at the site and group level. And in spite of all this, vast majority of pharma corporations were profitable businesses and remained so over multiple decades.

But how is any of this linked to my story? As it turns out, I ended up working in pharma for a few years and through direct experience and observing the career trajectories of acquaintances had a ringside seat to the beginning of final collapse of employment in pharma sector. Here is a post from 2011 in which they document that almost 300k jobs in that sector were lost between 2001 and 2011. And those layoffs did not stop in 2011, though they have sorta run out of people to fire- especially in past 4 years. The total is now closer to 400-450 k jobs and even if we assume that 60-70% were in sales and administration, it is fair to say that ivy-league MBAs have finally killed the goose which used to lay golden eggs. Far more problematically, it has altered the career course for many who would have otherwise gone into pharma.

In other words, their short-termism not only destroyed decades of institutional knowledge but also their ability to rebuild in future. And it shows! And before I explain you how, it is important to quickly explain the process of drug discovery and approval. It all starts with either the discovery of a new drug target (usually protein) or some effect of a chemical compound in cell-based or animal assays. From there it enters the pre-clinical development phase where chemists make hundreds and thousands of chemical cousins of the initial lead compounds and test them in a number of assays, animal models of some disease and extensive toxicity testing in multiple animal species. Only after it has cleared that phase can it be even considered for human trials. Small phase I trials are usually the first (dozens of people), followed by larger Phase II trials (hundreds) culminating in Phase III (hundreds to thousands and often) over a few years.

To make another long story short, the system was designed such that drugs which entered Phase III trials were unlikely to fail, and this was the case for most of modern history. Sure.. you did encounter situations where testing in larger populations (P III) revealed some rare but nasty side effects or the drug was not as efficacious as previously expected. But outright failures of efficacy in Phase III trials was really rare. Then something changed and nowadays the majority of drugs which enter Phase III trials fail, and they usually do so for lack of efficacy. Curiously, this often occurs when Phase I and Phase II data was either very good or pretty promising. So.. what is going on? While many industry insiders have tried to explain this deeply troubling trend by invoking all sorts of clever sounding bullshit, there is a simpler and more rational explanation.

A large percentage, likely overwhelming majority, of drug development in past two decades has been based in two types of fraud. The first involves manipulating metrics to make something look far better than it is in real life. Examples of such frauds involve cherry-picking patients, burying negative data, changing criteria for success, playing around with data and statistics and other stuff which is not technically illegal. The second type involves falsification of data, deliberately deleting data, kicking non-responders out of trials to improve responses rates etc. But what does any of this have to do with the downward career trajectory of people working in that sector?

Well.. since we have already exceeded 1200 words in this post, I will leave that discussion for the next part of this series. In it, I hope to go into some more detail about how neoliberalization and financialization of pharma destroyed its older and much more successful business model and institutional structure- all to make a handful of people on wall street and upper management far richer than they otherwise would have been. You will also see how stuff such as pushing opioids, antidepressants, antipsychotics etc to doctors and constantly jacking up prices of old and new drugs replaced developing newer ones as the main source of corporate growth. And ya.. I will also go into what happened to all those middle-aged and older people who lost their jobs and, in many cases their entire, careers after decades of relative stability.

What do you think? Comments?

  1. Someone
    August 23, 2019 at 5:07 am

    The bean counters have ruined every aspect of business and public institutions. We have this unholy rule by MBA and a balance sheet. This is one of the reasons the quality of everything is declining because the intangibles are not appreciated. The mentality of most MBA’s is that any monkey can do some of these jobs and cheap is always great.

  2. bonzo
    August 23, 2019 at 8:02 am

    Almost all institutions eventually rot. If competition is allowed, then someone else takes over. Sears was replaced by Home Depot, Walmart and other big big stores, for example. The real question is why this isn’t happening in pharma. Also, I’m not so sure about “… came up with the most important advances in medicine we have ever seen”. Other than vaccines, antibiotics, antifungals and anti-parasite medicines, what exactly are the truly useful pharmaceuticals?

    • Another Commenter
      August 23, 2019 at 2:00 pm

      Other useful things, off top of my head:

      Hormone replacement, both sex hormones and thyroid

      Steroids, used moderately and appropriately

      Pain control, opiates and others

      Clot busters, once again used with discretion

  3. Jack Donovan
    August 23, 2019 at 3:46 pm

    so advocates, tell us is the war between strippers and porn stars as bad as the war between the alt-reich and alt-lite:

    See Hail !!!
    14 88 !!!
    Not Str8 !!!

    ___

    Strippers have massive attitude, especially if they ever used to work in well-known joints. They make horrible escorts and this fact is well known among hobbyists.

    • P Ray
      August 24, 2019 at 11:50 am

      Very likely because strippers got money without having to “touch (his) base” with their customers, they feel entitled to a home run of money.

      It creates the worst kind of woman, the one that thinks “my presence is my gift to you”.

  4. MikeCA
    August 24, 2019 at 5:33 pm

    I’m not familiar with the pharmaceutical industry, but I am very familiar with the way private equity funds and hedge funds have ruined many American companies. Fortunately the private equity funds have mostly stayed away from Silicon Valley.

    In 2008 I was fortunate to be working for a financially strong company. It had almost a billion dollars in cash and no debt. When the credit markets froze up in 2008 it had no problem meeting payroll and paying suppliers. It came through the great recession in good shape with no lay-offs.

    In 2012 the company appeared on a list of possible private equity take over targets. Why? Because it had so much cash. Private equity could borrow the money to buy the company. Then they could pay all that cash to themselves as a special dividend that they could use to pay back part of the debt. Then they could sell off a few products to generate more cash which would be paid out as a special dividend. Then they would lay-off a bunch of R&D to cut costs. Finally, they would have the company borrow large sums of money and pay half or more of it to the private equity as a special dividend. Then they would take the company public again hoping to get paid more than what they originally paid for the company.

    Private equity will claim that they cleaned up the balance sheets when they restructured the company, but the truth is they are spinning out a weakened company that is deeply in debt. The company will be able to service that debt as long as the economy is strong, but they would be short of the R&D to improve the technology and they would no longer have the cash to buy small companies with new technology. In an economic downturn they would be forced to lay-off even more R&D.

    Private equity is hollowing out American companies to enrich themselves.

    Private equity is one of the more visible but minor manifestation of the problem. Monopolization, oligopolization and financialization are far bigger manifesastions.

    Here is a good starting place.. https://mattstoller.substack.com

    • bonzo
      August 26, 2019 at 3:04 am

      >>Then they would take the company public again hoping to get paid more than what they originally paid for the company.

      There’s the real problem. Nothing wrong with buying up a good business and then effectively liquidating it with all that borrowing, cash dividends and layoffs. Assuming the stock market priced the company fairly before and after these shenanigans, and the bond market also priced those junk bonds correctly, government wasn’t somehow tilting the playing field, then this would not make economic sense. That is, when they took the company private, they would receive far less than what they paid, and they would lose a ton of money taking everything into account, and everyone would laugh at then for being idiots, and that would be the end of this foolishness. Something is going wrong when the stock and bond market allow these gutting operations to be profitable.

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