Convoluted Efficiency

The pharmaceutical industry is a gargantuan pile of logistics.  Employing more than one quarter of a million people in 2008, the various companies that make up the market create jobs for a huge sum of individuals.  But pharmaceutical corporations don’t just provide career opportunities for scientists; they form job opportunities for almost all skill levels.  31% of the work force may hold doctorates, but another 27% is involved in production and manufacturing, both of which hold positions for low skill workers.  All of the discovery and production channeled by the previous 58% is channeled through the other segment of the work force, marketing and administrative staff.  As the elderly population grows, both the importance and size of almost all pharmaceutical corporations and their staff can be expected to rise substantially, especially in the areas that provide innovation for new products.  Coordinating everyone from Microbiologists, to Tablet Testers, to Sales Representatives requires a little more than the typical company structure and leadership, and often that structure becomes a spider web of employee positions.  Each individual must know their position and function, and more importantly, must perform that function with absolute safety because of the necessity of their product.  Corporate structure therefore becomes of the utmost priority, especially in the largest pharmaceutical companies in which every aspect of the work force is employed.

Pharmaceutical companies don’t get any bigger than Pfizer.  The huge corporation is divided into two primary segments, the PharmaTheraputics Research and Development area and the BioTheraputics Research and Development area.  These two areas are further splintered for commercial use into nine factions of specialization: “Primary Care, Specialty Care, Oncology, Emerging Markets, Established Products, Consumer Healthcare, Nutrition, Animal Health and Capsugel”.  Each of these business sectors has its own leadership with “clear accountability for results” and reports to the executive board of the firm.  Most of the other key players in the industry follow a similar, if slightly less convoluted structural scheme.  Roche Holdings proceeds to create similar divisions within their corporation between pharmaceutical development and the newly emerging biotechnology field, just as Pfizer has done.  Roche Holdings has only recently completed a transition to this structure after their acquisition of Genentech in 2010, but as biotechnology continues to become a higher priority for innovation in the industry, one could expect a continuation of the corporate focus split.  Other large organizations don’t divide themselves quite as much as Pfizer and Roche Holdings, but all of the key players follow the trend of having a board of directors, which controls the some key strategy and hiring and firing of leadership, and a team of C-level of officers who manage day to day operations and other corporate strategy.  

Pharmaceutical corporations, especially the major industry players, manage almost every aspect of their market.  They produce their raw own materials (active ingredients), manufacture their own products (medications), package those products, and sell them using their own in house sales and marketing teams.  That's an astonishing number of people to coordinate, with an astounding difference in career choices.  The structures that this level of complexity requires are enormous, and yet they must run with the utmost precision and efficiency.  I'm still amazed at just how organized the big players in the industry are, because their logistics are nightmarish.  

-Spencer Swan

Information for this article was gathered from:

Bureau of Labor Statistics. (2009). Pharmaceutical and medical manufacturing. Career Guide to Industries, 2010-2011 Edition. Retrieved from http://www.bls.gov/oco/cg/cgs009.htm#outlook.

Elkind, P., Reingold, J., & Burke, D. (2011). Inside Pfizer’s palace coup. Fortune. Retrieved from http://features.blogs.fortune.cnn.com/2011/07/28/pfizer-jeff-kindler-shakeup/.

www.phizer.com 

Roche. (2011). Company Structure. About Roche. Retrieved from http://www.roche.com/about_roche/at_a_glance/company_structure.htm.