Biosciences Defy U.S. Jobs Slump as Research Labs Hire

Job growth in biosciences is defying the slump in U.S. employment as a reliance by Pfizer Inc. (PFE) and other drugmakers on outside research labs helped support the industry through the past decade.

Biosciences added 96,000 jobs from 2001 through 2010, a jump of 6.4 percent, the Biotechnology Industry Organization and research firm Battelle said in report today during an industry convention in Boston. The U.S. economy lost about 3.6 million private-sector jobs in that time, a decline of about 3 percent, according to data compiled by Bloomberg.

Employment at laboratory companies, such as Princeton, New Jersey-based contract researcher Covance Inc. (CVD), rose 24 percent in the period and was the only area of biosciences to expand during the 2007-2010 recessionary cycle, climbing 6.1 percent, according to the report. Labs employed more than 450,000 people in 2010, or almost 3 in 10 U.S. bioscience industry workers.

“This reflects the outsourcing of many research and testing services previously done in-house by major biopharmaceutical companies, as well as the rise of molecular diagnostic testing,” Battelle and BIO said in the report.

A separate report by London-based Ernst & Young today found biotechnology companies boosted research and development spending in 2011 by 9 percent. That follows a 2 percent increase in 2010 that was preceded by a 21 percent plummet in 2009.

Job Movement

Jeffrey Spaeder, a cardiologist, is among those who have moved from pharmaceutical companies to contract research labs. In 2011, he joined closely held Quintiles Transnational Corp., the biggest provider of testing and drug-trial services, as chief medical and scientific officer, after working at Abbott Laboratories (ABT) and Takeda Pharmaceutical Co. (4502)

“It is a very positive growth environment” that probably will continue, Spaeder said in a telephone interview. “I was very pleasantly surprised by the number of bright, experienced people” at Quintiles, based in Durham, North Carolina.

“Pharma companies have been downsizing multiple parts of their organizations,” he said. “They are finding CROs are able to provide therapeutic area expertise and clinical development expertise that they previously had in house.”

Biosciences industry employment totaled 1.6 million in 2010, spanning 70,000 business establishments, according to the BIO report. The five areas of the market include labs; makers of lab equipment and medical devices; biological drugs and diagnostic substances; fertilizers and biofuels; and product distributors. Three areas saw employment levels drop in the 2001-2010 period.

Agricultural Biotechnology

Agriculture producers and fertilizer manufacturers, such as Marysville, Ohio-based Scotts Miracle-Gro Co. (SMG), fell the most with a 5.9 percent decline, or 4,570 jobs. Employment among medical device makers, such as Minneapolis-based Medtronic Inc. (MDT), dipped 0.3 percent, representing a loss of fewer than 1,000 jobs.

Employment at drug companies such as New York-based Pfizer declined 3.1 percent, a loss of almost 9,400 jobs. Drugmakers still had the highest annual wages of $99,000 in 2010, which is 20 percent more than the average biosciences worker and twice the private sector average.

Distribution companies, including San Francisco-based McKesson Corp. (MCK), saw job growth of 6 percent, adding almost 25,000 jobs.

The recession that began in December 2007 and ended in June 2009, the worst contraction since World War II, took its toll on the industry. Biosciences employment declined 1.4 percent from 2007 to 2010. All U.S. private industry jobs fell 6.9 percent during the same period, according to the BIO report.

“While not immune from the global recession, the bioscience industry has demonstrated that it is a generally strong and steady job generator, growing jobs over the past decade at a pace well above the national average,” Battelle and BIO said in the report.

BIO, based in Washington, is the largest lobbying group for the biotechnology industry, with more than 1,100 members worldwide.

To contact the reporter on this story: Anna Edney in Washington at aedney@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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