Why chemistry skills are now less valued than they were
Neulasta, a polypeptide drug.
Between 1950 and 2000, chemists were highly valued for the improvements they could make to a company's bottom line. The development of penicillin and related compounds helped punch small molecule synthesis into the market and created a healthy respect for the profession of chemistry. During these years, even a Bachelor degree in chemistry was held in high regard.
Due to several factors in the last decade, chemists around the world and even more so in Australia have felt a lowering of the demand for our skills. Organic synthesis is not an area that lends itself well to starting one's own business. The capital outlay is large, the instruments needed for chemical analysis are expensive enough that they must be shared between multiple projects. Also, chemistry is hard and serendipitous; breakthroughs are hardly ever made by someone working alone. It is a team exercise where people bounce ideas off one another.
The photography industry, which declined rapidly in the early 2000s, was a major employer of chemists. Kodak's plant in Coburg, Victoria was closed, as were those in other countries. Only the headquarters in Rochester, New York remained as a skeleton of what it was. While the chemists who worked at Coburg and Rochester who were below retirement age do have transferable skills, they now compete with other chemists for jobs in at pharmaceutical firms.
And the global pharmaceutical industry now has less cash to spend on salaries than it did ten years ago. Most of these players are in the USA; Australia has no real small molecule drug development firms. There is an arm of Pfizer that does veterinary medicines and GlaxoSmithKline refine opiates at Port Fairy. None of these contribute to the small molecule blockbusters that drive value-added chemistry.
I am often asked why I don't seek work at CSL - an Australian pharmaceutical company. I then explain that CSL make large molecule drugs, whereas I am trained for small molecules. Large-molecule drugs are plasma-based polypeptides. They are water soluble and their structure is so large that they are usually drawn as a ribbon-like image.
Bupropion (aka Wellbutrin) is an anti-depressant.
Small molecules on the other hand are drawn with their atoms visible, for example an N for nitrogen or an O for oxygen, Cl for chlorine. These drugs are usually solid white powders that are not water soluble, survive the stomach acid (can be taken as pills) and have a half-life of hours, whereas the half-life of large molecules is measured in weeks. The skills required to make the two types are starkly different. Small-molecule drug development requires PhD-level synthetic chemists; large molecule preparation requires a PhD in Biochemistry. This is because small molecules are synthesized by obtaining a low cost compound, dissolving it in a solvent, reacting it with something, then extracting and purifying the new product. There may be 7 or 8 steps required to get to the more expensive target compound that is used as the drug. Nobody synthesizes a polypeptide made up of 300 amino acids one amino acid at a time: instead, bacteria are engineered to do this in cell culture.
There are companies here in Australia that prepare drugs by following recipes that have been developed overseas (eg Alphapharm in Brisbane). Most positions at these firms require a bachelor degree — they rarely employ PhDs.
The time and money to develop a blockbuster drug goes into screening compounds for potential activity, inventing the reaction pathway, followed by inventing a way to upscale that pathway. The lead compound must then pass through four stages of clinical trials, which is most often where potential blockbusters get stopped. They may cause kidney or liver failure, or some other repugnant side effect (blindness, madness, death!). Dangerous side effects are terribly unpredictable and it largely comes down to luck. However, once a drug becomes a blockbuster it is highly value-added for the firm who will protect it with a tribe of lawyers and invest some of its profits into developing further potentially profitable drugs. After the drug comes off patent, its profit tends to fall dramatically.
Lipitor has been the most profitable drug in history, selling over US$5B per year from 2003-2011; when it came off patent in 2012 it dropped off the chart. Astra-Zeneca's drug Nexium, which is a proton pump inhibitor used to treat heartburn and esophagitis has topped US$3B per year in US retail sales for a number of years. It seems remarkable that a molecule as simple as Glaxo-Smith-Kline's Bupropion can be owned, but it can (Well, for 20 years it can). This is what justifies the capital investment.
Pfizer's Viagra is probably the best known blockbuster drug. Its US patent expired in 2012.
Viagra, also known as Sildenafil.
Drugs such as Viagra that treat lifestyle emergencies are good at achieving fame, but it was not higher than #30 on the charts between 2003 and 2012 (this data only began in 2003). It hovered slightly above or below US$1B during this time, whereas the top performer on the charts has always been US$5-7B, however, Viagra did do wonders for Pfizer's brand awareness. It is one of the few brand-name drugs from the 1990s found in a dictionary and the auto-spellchecker on my computer has not flagged it.
The most profitable blockbuster drugs tend to treat chronic, life-threatening conditions such as diabetes, depression, autoimmune and cardiovascular diseases. Anti-cancer drugs score surprisingly low on the retail sales list, largely because the patients who are prescribed these only need them for a short burst of time. Patients with poor diets, moods and exercise regimes tend to continue to mope along over an extended period. The chart below shows that the number of small molecule blockbusters has fallen.
A chart of the top 40 drugs shows the same trend.
This shift from small-molecule domination to a more equal share represents a few wins by the large-molecule camp (Blockbusters) and a few losses by the small-molecule camp (patent expirations). The small-molecule drugs are, in their pure form, white powders with a long shelf life that are easy to package and ship.
So we arrive at two simultaneous problems: expensively training a lot of PhD-level chemists in Australia when most of their work is overseas. And, world demand for these skills is lower when there are fewer blockbuster drugs on patent. My American contemporaries have complained to me lately that they too have a shortfall of jobs for chemists. A reason for this second point is shown by the graph below which uses nominal US dollars to classify drugs as blockbusters.
(Note: if I'd used inflation adjusted 2010 US dollars, a few more performers from the earlier years would click over into blockbuster status). This graph shows a peak in the in the number of blockbuster drugs in 2006. The downturn coincides with that of the world economy and it may appear to be a result of the GFC. It is not. Except perhaps for Viagra, these drugs are medicines that are non-discretionary: their consumption does not go down in tough economic times. The lowering in the retail sales of a drug nearly always coincides with its patent expiring, which allows competition from generic drugmakers. Incidentally, Viagra has unexpectedly defied expectations by holding relatively high retail sales after its patent expired in 2012 - this is largely due to Pfizer's clever and successful strategy of creating an online mail-order facility called viagra.com.
The generic drug companies produce mostly in Asian countries and pay workers rates that Australian garbologists would turn their noses up at. Western labour can't compete. Even Pfizer have accepted this and they have a presence in China where they selectively delegate their more simple syntheses. And for an industry that can essentially be picked up and plonked in the location where the best value workers can be found, Australia looks less attractive than any of the English speaking countries. Not only are our wages the highest, employers must pay 10% on the top as superannuation. New Zealand and Ireland are much more attractive destinations for small startup pharma companies. Incidentally, the highest density of startup pharma companies is in Boston and San Diego. These are two of the highest cost of living parts of the US, but as they have a critical mass of activity in this area, skilled workers can be attracted with more modest salary offers as they don't need to relocate and there is usually a job in that city for their spouse in some other industry. Pharmaceutical companies generally do well when they have simultaneous access to intelligentsia and cheap labour - some countries that are well placed to do this include Poland, Russia, Spain, Italy and Brazil. They struggle in regions with an inability to buy a wide range of organic chemicals to arrive very quickly, which is a serious hindrance to organic synthetic research in Australia.
Is the diminished value of chemistry skills permanent or temporary? The skills of piano tuners were believed to be on their way out in the late 1970s but those who apprenticed in piano tuning during this era are now in short supply and are handsomely paid. On the other hand, typewriter mechanics fell out of favour in this same period. My Grandfather was born in 1937 and was a typewriter mechanic which in hindsight was not a wise path to job security. However, a piano tuner born in 1954 is now being rewarded for what appears to have been confidence and foresight.
So will chemistry skills go the way of the typewriter mechanic, or the piano tuner? Well, there is still demand for the products. People will still want heart medications and antibiotics. Novel fragrance and pesticide compounds will remain sought after. People love a new colour and a tiny bit of a dye compound goes a long way. The next blockbuster drug could appear in an unexpected place. No one expected Viagra; it was being screened for the relief of hypertension and angina. A compound that alleviates some other lifestyle emergency (baldness perhaps?) may provide a blockbuster and help big pharma to take off again.
There could well be a renaissance in the skills required for small molecule organic synthesis.