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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

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« Bits And Pieces | Main | Report from C&E News »

April 21, 2010

Two Bad Ideas

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Posted by Derek

I note that one of the biggest topics in the "What To Tell the C&E News People" comment thread is chemical employment. And it should be - there are far fewer med-chem jobs out there today than there were five years ago, and it's getting harder and harder to imagine things coming back to the way that they once were.

In fact, I don't see any way that they can, at least if by "the way they once were", you mean the number of well-paid US-based positions at large pharma companies. I hate to sound like this, but I think there's been too much of a shift in recent years for anything to undo it. Costs have gone up, drug-development success rates have (at best) not increased, and there are cheaper ways to get a good amount of work done which used to cost more. Which of these things are going to change back, and how?

We can argue about how effective some outsourcing is, but it's definitely not worthless. And we can certainly argue about whether companies have cut too far back in the current downturn. But (and I've said this before around here), what I really have trouble with are two solutions that get proposed every time this topic comes up.

The first of these is "Cut back on work visas". Well, that's the milder form of it - this point of view has a way of slipping down to "Ship 'em all back" sometimes. Either way, what people who advocate this seem to believe is that companies will gladly hire American-based scientists if they're just, you know, forced to. I can't see it. And as I've said here before, I'm not particularly focused on bettering the lives of American scientists as opposed to those coming in from other countries. Many of them become Americans themselves, and I'm glad to have them. We can use all the intelligent, resourceful, hard-working people here that we can get.

The second solution that gets aired out is "Form a Union!" And I have to say that I have even less patience for this one. I'm not a big union fan in general, actually, and I think that in this case it's an even worse idea than usual. What leverage do employees have? Here's the problem that sinks many such ideas: the US is not an island nation, in any sense of the word. If you force the cost of doing business here up even higher, the jobs will leave even faster. There are now places for them to go, which is the biggest change of the last ten or twenty years. Those places are often not quite as good in some ways (for now), but they're a lot less expensive, and that's where the money will flow if the deal looks reasonable. The only thing that will slow this down is if things get cheaper here (which isn't too likely), or if they get more expensive over there (which is quite likely indeed, actually - a topic for another day).

So to me, both of these proposals boil down to forcing companies to pay more for what they can get elsewhere. In my opinion, they're both unworkable and likely to make the situation deteriorate even faster than it is already.

Update: fixed typos, I think. Views remain the same! As to the "scientist shortage" talk that keeps popping up, I agree with the people who are ticked off about that one. We clearly have no great shortage of scientists at the moment in the fields that I have personal experience of. But this is (or ideally should be) something of a separate topic from immigration, and will be the topic of a future post. . .

Comments (116) + TrackBacks (0) | Category: Business and Markets | Drug Industry History


COMMENTS

1. David P on April 21, 2010 4:15 PM writes...

I agree with you on these points, for the most part.

An idle idea I had while reading over this and the comments in the thread was that a Union would not have to be an "Us against Them" organization, but just acts as a representative for the non-management employees. Not leveraging more pay, just working with the company to be more efficient and competative. Being there to point out that a management idea won't work and to give alternatives.

Pipe dream?

I wonder if you are wrong about the difference in prices between here and abroad remaining large though: salaries in China (at least IIRC) are on the rise and, crucially, there are a lot of unemployed chemists here. Seems to me that we are in a period where we have to make do with less and not feel entitled to $100k+ salaries. Maybe we don't want to think about salaries going down, but what is the alternative?

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2. Nat on April 21, 2010 4:38 PM writes...

I agree with both points, but my impression from reading many of the earlier comments was that people aren't particularly angry at foreign guests taking jobs from Americans, they're angry at industry lobbyists claiming that there's a scientist shortage and we need to issue more visas. The immigrants aren't the villains here - they're just being exploited like everyone else. It is even more appalling from the point of view of a biologist: more and more companies are using "industrial postdocs" as an excuse to hire junior scientists at $50,000 per year, and in this economy they'll probably have no trouble filling these positions. Is there any other field where you spend all of your 20s in school in order to make so little money in the private sector?

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3. Nat on April 21, 2010 4:39 PM writes...

I agree with both points, but my impression from reading many of the earlier comments was that people aren't particularly angry at foreign guests taking jobs from Americans, they're angry at industry lobbyists claiming that there's a scientist shortage and we need to issue more visas. The immigrants aren't the villains here - they're just being exploited like everyone else. It is even more appalling from the point of view of a biologist: more and more companies are using "industrial postdocs" as an excuse to hire junior scientists at $50,000 per year, and in this economy they'll probably have no trouble filling these positions. Is there any other field where you spend all of your 20s in school in order to make so little money in the private sector?

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4. chemist on April 21, 2010 4:42 PM writes...

"We can use all the intelligent, resource[sic], hard-working people here that we can get."

If you mean "use" as in "use with compensation" as in "employ" as in "hire to fill a job" then you're wrong. We have a glut of talented people.

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5. here today gone tomorrow on April 21, 2010 5:01 PM writes...

Yep, the jobs are not coming back -- Large US pharmaceutical R&D sites shuttered in past 15 years – Syntex, Searle, Sterling, UpJohn, Park-Davis, Bayer, Berlex, Alza, JNJ – Ortho, Monsanto, Dupont, P&G, Glaxo – RTP (plus 4 R&D sites around the world), Robins, Knoll (Bayer), 3M, Ciba Summit, Burroughs-Wellcome, Rorer, Merrill-Dow, Rhone-Poulenc, Sanofi-Aventis, Wyeth (6 sites), Lederle, Pfizer – New London, AstraZeneca – Delaware (multiple sites in the EU) and more closures are coming in the future, count on it.

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6. Nick on April 21, 2010 5:21 PM writes...

"And as I've said here before, I'm not particularly focused on bettering the lives of American scientists as opposed to those coming in from other countries."


Congrats! You are a true humanitarian. But the ACS...the AMERICAN CHEMICAL SOCIETY, should be concerned about the US Scientist. It claims to represent my interests. Or didn’t you know the ACS lobbyists are some of the highest paid in Washington?

Now a temp visa in this time of strife and famine is akin to dumping more people onto a crowded lifeboat.

Yes, we'd all like to think the US has infinite resources..give us your hungry and poor...yada yada yada. But I'd humbly point out that the USA is not an open system. Its foremost goal is to protect its citizens welfare.

Would you complain if the local petrochemical plant imported a thousand Zimbabwe residents to kick you out of your home and squat on your land? Why, you'd be straight off to the nearest court screaming for justice.

Likewise those jobs given to foreigners that you blithely dismiss are American jobs! You have a right to those jobs..you have a right to exist.


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7. J-bone on April 21, 2010 5:35 PM writes...

more and more companies are using "industrial postdocs" as an excuse to hire junior scientists at $50,000 per year, and in this economy they'll probably have no trouble filling these positions

This is not much more than I was making as a BS level scientist at my last company (which I left for grad school) and I would happily take a "postdoc" for this amount of money.

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8. bbooooooya on April 21, 2010 5:46 PM writes...

"But the ACS...the AMERICAN CHEMICAL SOCIETY, should be concerned about the US Scientist."

So what about those darn foreigners whop are also ACS members? Should the ACS not be concerned about them, or should only Americans be permitted to join the ACS?

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9. GreedyCynicalSelfInterested on April 21, 2010 5:46 PM writes...

I think what the ACS and other lobbyists for visas are trying to say is that there is a shortage of graduate students to fill all of those empty desks at second-rate and third-rate institutions.

As for biologists having to do industrial post-docs for jobs, there was a shortage of jobs for biologists in the 1980's!

"There's a graduate student born every minute!"

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10. retread on April 21, 2010 6:02 PM writes...

Back in the early 60s in Grad School, Don Voet and I used to say that the universal scientific language was broken English. The country was not noticeably harmed by this in the following half century. Don's parents were Dutch refugees.

Given the upheaval in the middle east, are those of you in academia and/or grad school seeing an influx of talented people from the area?

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11. bbooooooya on April 21, 2010 6:11 PM writes...

"The country was not noticeably harmed by this in the following half century."

WHAT! That is the most ridiculous statement ever. You really should watch more Fox "news"!

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12. retread on April 21, 2010 6:23 PM writes...

By 'this' I meant the influx of foreign born scientific talent. It would be interesting to know how many American Nobelists of the past 50 years were born abroad.

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13. Matt on April 21, 2010 6:45 PM writes...

I am an american and I am concerned about foreign students taking our job too. But the problem comes from the fact there are not enough US TAs to teach the undergraduate students. So they hire internatinal students and once they are here, they just stick in here.

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14. SteveM on April 21, 2010 6:59 PM writes...

This pro immigration argument is phantasmagorical. If a labor sector is saturated, exactly why would more individuals of that labor category be imported? Of course only if the import labor works cheaper. Because the Green Card carrot is dangled in front of them. Right now H-1B is a charade, a sop to Crony Capitalist business sectors who game the immigration system in DC.

There's no "Best and Brightest" from Asia swarming over to the United States to grace us with brilliance. No, the vast majority of the H-1B's are decent technologists, (some not so decent). That's it. They are no more talented than the laid off American scientists and engineers sitting on their hands at home.

The idea that the richest, best educated country in the world with 300 million people in it has to go overseas to secure scientific talent is nuts. Just nuts.

Derek, check out the resumes of the guys pounding the pavement that post here and then come back and tell us it's rational to hand jobs they can do to H-1B imports.

Maybe America will eventually wave sayonora to all its technology development jobs to Asia. But until that time comes, if we got people here who can do it, we gotta let them do it.

P.S. I love the ironic argument that H-1B's pay taxes. Yeah, those taxes are used to pay unemployment, Medicaid, food stamps and section 8 housing subsidies for the displaced Americans dumped out of their jobs by imports.

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15. GreedyCynicalSelfIntereted on April 21, 2010 7:40 PM writes...

SteveM:
You don't understand what the profs and MBA's are saying when they are talking about a shortage of talent. It's a half-truth and they left out a word that would betray their intentions.
What they are really saying is that they want "fresh" talent and no one over 40 need apply.
Plus, some people are just warm bodies that have to baby-sit the freshmen in chemistry at larger universities and babysitters are expensive. Some of these 12-year old kids want $10 per hour for babysitting! It's just not legal to have a 12 year old babysitting 18-20 year old college students and it's too expensive. So, get the overseas talent that's cheaper and can mumble broken English to the college freshman.
The second and third-rate institutions depend on talented foreigners to fill the empty research benches of professors who may happen to have money for their expensive and esoteric hobbies.

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16. maozaho on April 21, 2010 7:48 PM writes...

I am glad to see this topic here. A lot of jealousy going on about foreign workers and I understand that. The fact of the matter is that NO us chemistry department will survive without international TAs who finally finish their study and look for the return of their 5-10 years investment in us .
The other thing I saw in this discussion that international students are not talented. Here is tha fact, the the graduate schools first offer US students and if all the seats are not filled, they offer intl students. When they do so, they pick top of the top. Once admitted, foreign students work their ask off to compete with local students. The result is in a competitive market, one looks for one with better credetials.
There are less jobs and the reason is outsourcing. One pharma company moved to canada in front of my eye because the tax is too high. So if there is real concern about jobs, why do not to tell the government to reduce tax for the pharma companies.
Finally, NO ONE in this discussion is geneticaly american, except the red indians. Your ancestors were just like me who came here for opportunity and finally AMERICANIZED. peace

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17. SteveM on April 21, 2010 7:48 PM writes...

Re: #15

GCSI, agree on your logic. So fine, let the imports staff the lower tier grad school positions. And when they graduate, congratulate them, wish them luck and a nice trip home back to their own countries.

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18. Captain Snark on April 21, 2010 7:53 PM writes...

Is there any other field where you spend all of your 20s in school in order to make so little money in the private sector?

Yes - they're called the humanities!

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19. silicon scientist on April 21, 2010 8:03 PM writes...

Wow, Derek. The U.S. must be run by the most enlightened legislature in the world. Somehow the U.S. Congress has found the perfect number of work visas, and anyone who argues that number should be lower is not to be listened to by rational thinkers.

Snark aside, there are plenty of good reasons to reduce the number of work visas. Ignoring those arguments makes me respect your opinion a whole lot less.

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20. SteveM on April 21, 2010 8:04 PM writes...

Re: #18 Captain Snark

No, the least paid now are unpaid "interns". The NY Times had a story a few months ago about NYU grads living in tents in a field on an organic farm. Their rationalization was that since it was an organic farm it was more than being a farmhand for free. But of course that's all they were - free farmhand labor.

More irony. The farmer found cheaper labor using NYU grads with $100K+ of student loans. Otherwise he would have had to pay Hispanic immigrant labor substandard wages that were still greater than nothing. The American labor model is being totally inverted.

P.S. Maybe out of work American Ph.D.'s should knock on Pfizer's door and "volunteer" as interns.

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21. Chemjobber on April 21, 2010 8:11 PM writes...

Or didn’t you know the ACS lobbyists are some of the highest paid in Washington?

I am highly skeptical of this. Link, please?

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22. barry on April 21, 2010 8:16 PM writes...

It's unlikely that the number of big-pharma research jobs will ever come back--if by "big-pharma" you mean the behemoths of the last decade. They drove the cost of a new drug to $1billion and have little to show for it. Almost all their NCEs come from acquisition, not from their research programs. No small company ever spent that, not least because no small company ever had a billion dollars. There's a vast and growing pool of idle talent and lab space, waiting for an influx of investment. If research jobs come back it won't be at mega-pharma, but it will be at start-ups.

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23. McChemist on April 21, 2010 10:13 PM writes...

The idea that the richest, best educated country in the world with 300 million people in it has to go overseas to secure scientific talent is nuts. Just nuts.

A lot of people are pretending that the relationship between the number of scientists and the number of companies is a one-way street. Not so.

Two factors in why all the new growth in the industry is taking place in China and India: lower costs, and an work force sufficiently educated to do R&D. The U.S. can't do anything about the first, but had control of the second by taking in so much foreign talent. Tightening the inflow of immigrants helped catalyze the outflow of jobs from the U.S. to other countries.

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24. chemist on April 21, 2010 10:30 PM writes...

Re: #14 (SteveM)

"The idea that the richest, best educated country in the world with 300 million people in it has to go overseas to secure scientific talent is nuts. Just nuts."

I totally agree. If Harvard hadn't hired Kishi many years ago they no doubt would have had to eliminate the position for lack of any other qualified candidate, don't you think so? (Not picking on Kishi: I needed a famous example.)

In the places that I've worked, foreign applicants (and eventual co-workers) were no more outstanding than our US born and educated staff. In some cases, they were actually rather abysmal disappointments as PhDs but competent technicians.

There are many foreign students who use a PhD program to enter the US but leave the program with a Masters after one or two years in order to legally enter the US workforce. We hired several of them, too, and some of them were terrible and shouldn't have been admitted to ANY PhD program in the first place.

It is also in my experience that employers use the promise of a green card to guarantee that they have an agreeable and compliant workforce. More than once I asked colleagues why they didn't speak up and support me about problems with various research programs. "I'm scared. I want to get my green card."

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25. stillemployed_fornow on April 21, 2010 10:34 PM writes...

I hate to say it, but the reason why there's an overabundance of PhD's is because the US government funds so much academic research. Pull the research dollars and all those postdoc and grad student slots would fade away. Many countries around the world seem to push for an education in chemistry, even if there's no economic reason for it. I assume the reason is related to national security. Ever wonder why a country like Iran trains so many chemists? If the governments goal is to overstock scientists then we fight an uphill battle to remain gainfully empolyed. What amazes me is that the US govn won't spend a cent to train more medical doctors...MD's must have a powerful lobby.

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26. chemist on April 21, 2010 10:52 PM writes...

Re: #16 maozaho

"Finally, NO ONE in this discussion is geneticaly american, except the red indians."

I, for one, am not talking genetics. I am talking US citizenship with no other options. I have sought employment in foreign countries.

Large Japanese company following favorable interview: "We don't hire foreigners."

French academic institution: "We'd love to have you. Just bring your own funding."

China: "My friend will give you a job in his chemical factory but you will only receive Chinese wages. [Not enough for a non-Chinese to live on in a country with a multi-tiered economy: different prices for Chinese and non-Chinese.]"

Nakanishi (Columbia) has criticized the Japanese system for not accommodating foreign scientists the way that the US system does.

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27. chemist on April 21, 2010 11:01 PM writes...

Re: #25 stillemployed_fornow

"What amazes me is that the US govn won't spend a cent to train more medical doctors...MD's must have a powerful lobby."

There ARE gov programs to take clinical MDs and get them into PhD programs in order to teach them how to do research and thus, it is hoped, enhance the quality of gov funded basic medical research.

There are NO programs to take (unemployed) PhDs and send them to Med School to learn the medicine that would strengthen their already well inculcated research abilities with a better medical education than "Burger's Med Chem."

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28. Anonymous on April 21, 2010 11:41 PM writes...

I agree with Derek about the futility of blocking visas and unionising. The industry is undergoing a major shift towards placing it's wet work in foreign countries like China and India. Where I differ though is around the issues of environmental responsibility on the micro and macro scale. We all know that our CROs are not required to meet the same environmental, health and safety standards as we are and it is a fundamental reason why these companies can beat our internal efforts. But we don't ask any uncomfortable questions. We suggest what best practice might be, but don't chack that it is being followed. I know from making discrete enquiries that a number of our contractors were hospitalised last year in several separate incidents. Is that OK ? Or does it lump me together with the fashion companies making garments and the sports companies making footballs using child labor in these countries ?

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29. bcpmoon on April 22, 2010 12:53 AM writes...

Interesting to see that people are all the same - highly educated or not, in the end its "better you than me".
From a european perspective: We are looking with envy at the dynamic and very productive scientific landscape in the US. I know that there were concerns e.g. in Germany that the DFG was funding the US-Science with its postdoc program and that the best were unfortunately staying in the US. Also my profs always talked about their impression that the hard sciences are mostly populated by asians and the occasional european postdoc while the americans are found in business and law. Is that correct? Perhaps the jobs are simply following the talent, after it has been "shipped back home".
In general the situation is of course similar here, China/India and so on. What we are seeing is the finding of a new equilibrium, but well, life is change.

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30. AlchemX on April 22, 2010 1:06 AM writes...

A look back into the literature would have averted much of this pain:

"Outlook grim for PhD chemists" Journal of the American Oil Chemists' Society, 1975, 52(6), 346A

Damn, always check the literature, that's what I've found out as a chemist.

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31. bcpmoon on April 22, 2010 1:14 AM writes...

As the saying goes: "A week in the lab can save you an hour in the library"...

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32. drsnowboard on April 22, 2010 1:41 AM writes...

So if US pharma outsources to India and China, then it doesn't need a stream of fresh graduates and PhDs.. Depts should close or merge. That's what happened in the UK, straight chemistry depts became absorbed into faculties and broad divisions, started cloaking chemistry courses as 'forensic science' (the CSI effect) and generally retreating from basic science teraching. My feeling is that this was driven by the applicants.. They saw opportunities elsewhere and voted with their feet. The pharmaceutical industry is dying on its feet in the West, accept it. The visa problem will go away once US living standards or salaries drop.

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33. silicon scientist on April 22, 2010 5:43 AM writes...

#28 "The industry is undergoing a major shift towards placing it's wet work in foreign countries like China and India."

It's not just pharma. There are so many high tech industries doing the same thing. There are no lifeboats...they're all sinking.

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34. RB Woodweird on April 22, 2010 6:41 AM writes...

Summary: Thank you sir! May I have another!?

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35. Mary P on April 22, 2010 8:09 AM writes...

It seems to me that there are more effective ways to do drug discovery than is being done in the US. That's why the pipelines of Big Pharma haven't been very productive, not because it's cheaper to do over seas, not because the Chinese and Indian scientists are smarter, but because the way DD is done and managed in the US is failing.

There are some CEO's who know how to set up lean, efficient drug discovery processes AND make companies profitable... in particular my money follows Fred Hassan, who seems to be able to take an ailing pharma company, turn it around and make it profitable WITHOUT sacrificing scientists and the future to do so. When Pfizer bought Pharmacia, they kept the wrong CEO. When Merck bought Schering Plough, THEY kept the wrong CEO. (But I made money with the stock both times.... my investing friends call it 'Following the bouncing Fred')

(By the way, I worked for Pharmacia AND Pfizer DD and saw the huge difference in culture, thought process and methodology. Also have friends scattered all thru the industry at this point and we often discuss DD culture and what's effective and not.)

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36. SteveM on April 22, 2010 8:20 AM writes...

Re: #35 Mary

Great observations. I have been out of the lab for 25 years (Ag Chem), but I'm an interested observer. At that time I left, QSAR was maturing nicely. And with the increase in computing power, assay selectivity and synthetic techniques since then, I thought that Pharma Discovery would be going like gangbusters.

But even with improved Discovery tools, most Big Pharma claim lame pipelines. Viewing now from a distance, I don't get the incongruity at all.

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37. out of pharma on April 22, 2010 8:20 AM writes...

ACS wants to perpetuate the myth that chemistry is growing. With the layoffs from big and small pharma/biotech where are the 'excess' chemists going to work? schools- budget cuts. Just create a new journal- spare time with chemists. Derek- Josh was critized for his salary but look at your new head and what he's taking home.

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38. bbooooooya on April 22, 2010 8:24 AM writes...

"It's not just pharma. There are so many high tech industries doing the same thing."

Low tech went overseas decades ago: try finding tube socks made in the USA. At some point, Anmericans are going to have to start making producst of value. Our current trade deficit is not sustainable.

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39. john on April 22, 2010 9:47 AM writes...

Please don't use terms like "red indian" it's offensive to some of us and really has no place in what can be an interesting and informative debate. Unfortunately there are some arguments touching on race etc. in these discussions. I'm finishing my PhD in med chem, looking for a job and I've realized that it's not worth it to me and my family to try and stay in science, doing a post doc or two and hoping for that position to show up thats not there.
I think there is a scientist shortage (again please don't bring race into this) it's in american citizens, while in a global sense it seems there isn't one.^60% of scientists funded by the NIH are not American born. The problem is that with the many years (many many many) that we spend in training I guess I personally feel somewhat entitled to a higher salary that what a post doc earns, or if I have to head overseas etc.
There is very little economic incentive at this point to get a PhD. That, I think, is the main reason that there are so few americans in science (comparatively). Why should I do all these years of long hours for crappy pay if it doesn't lead to a good paying job? Why not go to med school, or pharmacy school? That option isn't there in many other countries, a PhD gets you into the US and a chance at the American dream. I think the real problem has been hit on the head above, there are too many grad school and post doc positions. If you want cheap labor in your lab hire it, don't train someone for a position that doesn't exist.

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40. Anonymous on April 22, 2010 9:50 AM writes...

The US has without doubt some of the most talented chemit in the world. And the chances are 99% of them are gainfully employed. While the not so good ones are sitting around and complaining about competing with foreign scientist on this board.

The days of "tenured" positions in big pharma - where you contnued to be employed even if you hadnt done anything in the last 10 years are gone. Now you just have the "crappy" start ups and biotechs without the creature comforts of the big pharma "houses". Dont be fooled, your contempt comes through when you interview at the "crappy" start ups. So maybe it is time for some attitude adjustments and learning to accept that things have become more competitive.

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