IFEX

Through economic upturns, downturns and subsequent recovery, one industry continues to remain economitally viable. The pharmaceutical industry in the year 2000 earned a 17 percent return on both revenues and assets, making it the top performing industry] and the most profitable. According to the Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry trade group that represents the country's leading research-based pharmaceutical and biotechnology companies, more than $30 billion (was) invested in the development and discovery of new drugs during the year 2001. Pharmaceutical company stocks have continued to show growth regardless of fluctuations in the nation's economy. This record of steady growth may be attributed to several factors; one of which is the aging population. With the aging of the baby-boomers, estimates indicate that by the year 2030, approximately 70 million Americans will be over the age of 65, requiring much heavier reliance on prescription medications for the treatment of chronic health conditions. Another factor is the research and development and subsequent manufacture of new drugs through the biotechnology process.

Several mergers, takeovers and acquisitions occurred in the year 2000. The largest such deal was the $76 billion buyout of SmithKline Beecham by Glaxo Wellcome resulting in the formation of a new company, GlaxoSmithKline. Other mergers included Pfizer with former rival Warner-Lambert in a $116 billion transaction and Monsanto's purchase by Pharmacia for $31 billion. According to fiscal year-end sales, the top ten pharmaceutical companies for the year 2000 included Novartis, Merck, Pfizer, Johnson & Johnson, Bristol-Myers Squibb, Pharmacia, American Home Products, Abbott Laboratories, Eli Lilly, and ScheringPlough, respectively.

The leader of the pack, the Swiss company Novartis, ended the year 2000 with sales totaling $40.8 billion, a feat which garnered the company the coveted title of the world's top pharmaceutical firm. The company was formed in 1996 following the merger of two smaller Swiss-based companies, Sandoz and Ciba and has a diverse array of products that are responsible for its current status. Approximately two-thirds of the company's revenue comes from the sale of the prescription antihypertensives, Diovan and Lotrel and the immunosuppressant, Neoral. The remaining revenue comes from the sale of contact lenses and eye care products through Novartis Ophthalmics and CIBA Vision and its consumer health unit which includes Gerber baby foods, the cough and cold products Tavist and Theraflu, the laxative Ex-lax and the antacid Maalox. With FDA approval of Visudyne(R), the only drug treatment approved for serious myopia and ocular histoplasmosis early this summer, the ophthalmics division is sure to realize hefty profits in the coming years.

The number two drug company with fiscal year-end sales of $40.4 billion was Merck and Co. One-third of the company's sales were for drugs used to treat chronic conditions such as high cholesterol (Mevacor, Zocor), hypertension (Vasotec, Prinivil) and heart failure. With over 69,000 employees, Merck is not only a pharmaceutical company; its management subsidiary, Merck-Medco, accounts for more than half of its sales.

The third company in line with sales totaling $29.6 billion was Pfizer, Inc. The highest selling drug for this company is of course, the well-publicized anti-impotence drug, Viagra. Top sellers for the company also include the prescription drugs Norvasc for treatment of hypertension and the cholesterol-lowering agent, Lipitor with year-end sales totaling$ 4.1 billion.

Johnson and Johnson ranked four with sales totaling $29 billion, is not only a pharmaceutical company; it's also an array of healthcare businesses. The company is also the largest medical-device maker in the world, which accounts for 35% of total revenues. Johnson and Johnson, unlike most other companies, is in a very unique situation in that they are not facing patent expirations over the next several years. Risperdal, an antipsychotic agent, and Procrit, a medication used for the treatment of anemia associated with chronic diseases, are two of the company's top-- selling drugs.

The fifth ranked Bristol Myers Squibb, had year 2000 revenues totaling $21.3 billion. Today's corporation resulted from the merger 11 years ago of two companies: Bristol-- Myers, a company founded in the late 1800s to sell medications directly to doctors and Squibb, a pharmaceutical business founded around the same time by physician, Dr. Edward Squibb. Known for its development of innovative treatments of hypertension, heart disease, stroke, diabetes and HIV/AIDS drugs, the company is the number one provider worldwide of chemotherapeutic agents such as Taxol, Ifex and Paraplatin.

Most recently, the company has offered to work with the U.S. government to combat bio-terrorism in the "War on America." With the recent threat of anthrax and the potential loss of life, the company has announced several actions that will be taken in support of the campaign: 1) provide 20-25 fully-funded scientists specialized in anti-bacterial research to pursue research under government direction, 2) make the antibiotic Tequin (gatifloxacin) available at no cost to treat any person confirmed to have anthrax infection or as prophylaxis for someone who has been exposed to anthrax spores, and 3) consider sharing the Tequin license with the government in the event that demand exceeds supply. Tequin (gatifloxacin) is an antibiotic that is in the same class as the much talked-about Cipro, (ciprofloxacin).

Pharmacia, American Home Products, Abbott Laboratories, Eli Lilly and Schering-Plough round out the top ten.

Industry Statistics and Personnel Requirements

Though showing steady growth for several years, it was during the last decade that the growth could be considered phenomenal, escalating from $22 billion in 1980 to $149 billion in the year 2000. Industry earnings rose by a steady 15 percent each year during the 1990s making both the industry and shareholders very happy. The pharmaceutical industry employs individuals with diverse educational backgrounds holding degrees in such areas as business administration, marketing, accounting, chemistry, and of course, pharmacy. The industry can be a relatively closed one, with the chances for hire being greater for those persons having an inside contact, the greatest resource being a medical doctor.

Internships and co-ops are other avenues that may prove beneficial in landing a position in the pharmaceutical industry. Most companies have summer internship programs that introduce you, the potential employee, to the company and provide valuable networking opportunities that may result in future employment. According to Sheryl Callendar, executive director of Human Relations, Novartis Ophthalmics, NA, "Graduates can effectively prepare to break into the industry by earning a bachelor's degree in business or a related field, and sales or industry experience, and experience with general business plans." Many companies hire new college graduates but the final decision usually rests with the district manager and is also largely dependent upon the individual's qualifications. Networking with those currently employed by the company or otherwise employed within the industry, researching the company prior to an interview and writing a good industry-specific resume are several ways in which you can increase your chances for hire.

Some positions available in the pharmaceutical industry other than sales include data analysts, programmers, medical liaisons, clinical research scientists and clinical research associates. Salaries in entry-- level positions typically range from $ 30- 40,000 depending upon experience and the position sought. Opportunities for advancement and promotion are vast for the dedicated, productive hard worker. So can you as an African-American college graduate look forward to a potential professional opportunity within this vast industry? "There's no doubt in my mind in that the industry is viable for African-American college graduates," says Myrtle Potter, executive vice president and Chief Operating Officer, Genentech, Inc. "We have a full outreach effort, particularly within the Black community. We spent a good amount of time this past year at the Graduate School of Arts and Sciences at Howard University and also hosted a visit at Spelman College. We have relationships with a number of the other historically Black colleges in the United States and would welcome relationships with other schools." Potter continued, "We are also a part of the National Organization for the Professional Development of Black Chemists, and NChemE, one of the societies for Black engineers. We've got a presence and naturally are very interested in having a broad reach when it comes to seeking talent for Genentech."

21st Century Trends

The past two to three years have seen several companies merge in an effort to downsize and cut expenses, a trend sure to continue within the next few years. Of these, probably the most significant is Pharmacia, the result of a merger between Pharmacia & Upjohn and Monsanto with year-- end sales totaling $18.1 billion. In order to effectively market and advertise their products, the pharmaceutical industry continues to rely on a dynamic, ever-increasing sales force. Approximately 85 percent of physicians confirm that visits from pharmaceutical sales reps have a positive impact on their prescribing habits. Though a long-standing practice, the face of detailing may be changing. A physicians group in Cincinnati, Ohio recently implemented a pay-for-- appointment scenario in which the pharmaceutical company pays the group approximately $65 for a 10-- minute slot of appointment time. The group decided to take this drastic measure after reaching the conclusion that the reps were not only competing with patients for a seat in the waiting area but also for valuable time. Whether this practice will gain widespread acceptance is yet to be determined.

Another recent trend is marketing and advertising via direct-to-consumer advertising utilizing television and radio ads that directly target the patients, providing them with a wealth of information about the drug, its uses and side effects. Currently, the majority of ad budgets are dedicated to the three most common health problems in the U.S.: hypertension, diabetes and high cholesterol. The largest ad campaign to date has been the advertisement of the non-sedating antihistamine, Claritin that resulted in sales totaling several billions of dollars.

Future Viability

With an increased reliance on prescription drugs by an aging population and the continued research and development of new drugs, the pharmaceutical industry is certain to remain viable in the coming years. The recent release of the 2001 PhRMA survey on New Medicines in Development for Women indicates that 358 drugs are currently being developed for the treatment of diseases, which primarily affect women. One reason may be due to the increased life expectancy of women (79.4 years), exceeding men by five years (74.4 years). The medications are either in clinical trial or awaiting final FDA approval. The majority of the medications will be used to treat breast cancer; however, medications for other diseases that affect women such as heart disease, stroke, and lupus are also being developed. A population that has been largely ignored for many years, women and the Women's Health initiative now stand in the forefront of the healthcare arena.

For those who have discounted the biotechnology companies as overrated and nonproductive, such thought may soon prove to have been premature. Extensive research continues to take place for diseases such as Alzheimer's and high cholesterol. As evidenced by the billion dollar negotiations earlier this year between a large pharmaceutical company, Bayer and a smaller biotechnology company, CuraGen, such relationships are becoming more common in a cost-sharing effort. The collaboration between these two companies will result in the sharing of approximately $1.34 billion in development costs and the sharing of profits from any drugs developed at a 56 percent to 44 percent ratio.

So what is the state of the pharmaceutical industry? With a positive economic impact, steady growth, excellent job opportunities, new and innovative trends and the promising development of new drugs utilizing the biotechnology process (which may ultimately find the cure for cancer and other terminal illnesses), it's fair to say that this industry, unlike so many others, is sure to continue to thrive as it has done for so many years past.

By Conchetta White Fulton, Pharm. D.

Dr. Conchetta White Fulton is a clinical assistant professor at Xavier University of Louisiana College of Pharmacy and a clinical pharmacist at the ulane Hutchinson Women's Health Clinic.

Copyright Black Collegian Feb 2002
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