The pharmaceutical industry is one of the world’s most profitable. Over the past three decades, the industry has spent billions of dollars on research and profited immensely. The total level of pharmaceutical revenue worldwide has reached nearly one trillion U.S. dollars. In 2014, nominal spending on pharmaceuticals increased by 13.1 percent. And this growth is expected to continue, with global spending on medicines expected to reach $1.2 trillion by 2017, according to the IMS Institute for Healthcare Informatics.
Spend on Medicines
Source: IMS Health
Depending on their size and strategy, pharmaceutical companies can choose to conduct research in-house, or they make seek to license promising drugs from academia, other pharmaceutical firms, or biotechnology companies. Biotechnology is a newer area that has been appealing to investors recently. The biotechnology industry uses advances in genetics research to develop products for human diseases and conditions. Unlike pharmaceutical companies, biotech firms focus primarily on research and development.
Often, the pharmaceutical industry and the biotech industry are thought of together, and while opportunities in both sectors tend to mirror each other, the key difference is that biotech firms are more focused on research because they are still developing their initial products.
Over this month and next, DCR TrendLine will focus on each of these industries separately to provide highlights of key employment and talent trends. This month, we provide insight into workforce trends in the pharmaceutical industry.
DCR TrendLine Pharmaceutical Index
One of the main challenges facing pharmaceutical employers today is identifying and retaining the best talent in the market amidst fierce competition. In a recent global survey, pharmaceutical CEOs identified talent gaps as the second-largest threat to their growth prospects, with worries over corporate tax burdens coming first. Pharmaceutical companies are using a combination of full-time employees and contingent workers to achieve flexible scalability as corporate initiatives shift over time. Hiring trends in the industry extend to new kinds of corporate partnerships, academic alliances, and crowdsourcing.
Employment in the Pharmaceutical Industry
The pharmaceutical industry has one of the largest talent shortages in the market today. According to iCIMS, the industry has the lowest number of job applicants for the pool of jobs that need to be filled, with twice as many positions as there are applicants for those jobs.
For job seekers, the pharmaceutical industry has quality, higher-than-average paying jobs, with jobs ranging from sales representatives to chemists, paying median wages of more than $60,000.
Top Pharmaceutical Companies
The Non-Employee Pharma Workforce and Intellectual Property
A 2013 global survey of human capital and R&D executives by PwC found that approximately 60 percent of pharmaceutical executives plan to increase investments over the next few years to create a more skilled workforce. Larger companies are starting to follow the model of smaller companies by repositioning the size and focus of their internal R&D groups so that they are more agile. This strategy allows HR departments to entice top researchers by offering the benefits of working for a large company, while enjoying a work environment that supports autonomy.
Companies are also capitalizing on the on-demand workforce to bring in the skills they need on a project or short-term basis. While classification remains a challenge, as it does for organizations in other industries utilizing non-employee workers, pharmaceutical companies are also concerned about compliance and ownership of intellectual property when contingent workers are involved in its creation. In the pharmaceutical industry, IP protections such as patents and data protection provide incentives to spur research and development. When utilizing contingent workers, it raises the question of who owns the intellectual property rights to the product that has been created.
Copyright law guarantees that work performed by employees is considered work-for-hire and owned by the employer. But who retains the right to materials created by an independent contractor is less straightforward. The ownership of work products created by independent contractors depends on how comprehensive the contract between the parties is.