Why is HR in the Biotech Industry different ?

Biotechnology is one of the most research intensive industries in the world. The
first biotechnology product earning FDA approval was for synthetic human
insulin in 1982 and was developed by Genentech and Eli Lilly.
According to the Bureau of Labor Statistics, there are 2,323 biomedical
companies in California, employing an estimated 267,271 people. The Bay Area
employs 51,255 people, or 19.2% of this total. Los Angeles (42,383) and Orange
(30,092) Counties employ more than San Diego (27,510) County.
By sector, California biomedical employment is greatest in the Medical devices,
instruments and diagnostics area with 40.2% of the total (107,467 people).
Biopharmaceuticals is next with 30.9% and Academic research at 14.8%.
Between 2006 2010 there was flat cumulative growth in the biomedical
workforce in California.
Time and cost to market: Biotech and Pharma products take an average of 10
15 years to bring a drug to get to market, with costs of over $1.3 billion.
According to a recent article in Forbes magazine writer Matthew Herper, The
average drug developed by a major pharmaceutical company costs at least $4
billion, and it can be as much as $11 billion, Herper also writes fewer than 1 in
10 medicines that start being tested in human clinical trials succeed.6 Unlike
the high tech industry, the life science industry requires significantly more time
and money before bringing a drug, device or diagnostic to market.
Multi-functional Interdependencies: Due to the complex nature of product
development in the life sciences, and the likelihood of there being a cross-matrix
environment within the company, it can take many years of experience for an
executive or individual to develop their expertise, understand cross-functional
roles/responsibilities and priorities, and be able to effectively navigate critical
decision points in the process.
Regulatory Agencies: CBER/CDER There are regulatory hurdles that the FDA
has set for small molecules and biologics to ensure their safety before, during
and after the drug reaches the market. Unlike other industries, CBER and CDER
require truck loads of information (now terabytes of data with electronic
submissions) to be documented and submitted before product approval. Highly
documented and regulated Good laboratory, clinical and manufacturing practices
(also known as GLP, GCP and GMP) are required to be compliant with governing
agencies and are audited routinely.
Clinical Trials/design: This can be an art as much of a science, with a complex
set of variables to consider. MD/PhD experts from many disciplines converge to
design the optimal trial that will impact the greatest number of patients while
limiting toxic side effects.
Post product approval: The FDA often requires that companies continue to
collect data from doctors and patients and may require additional post-marketing
or registry studies after a product is approved this takes a significant amount of
time and expense. Some findings lead to additional product indications and
possible marketing opportunities if the companies are willing to sponsor more
clinical trials for those indications (i.e. products can only be promoted for on label
indications)

Financing: A variety of options are necessary for generating capital during

research, preclinical and clinical stages. Grants, VC funding, product partnering,
out licensing, alliances, are the most likely source of capital. These days IPOs
are extremely rare and generally need to be supported by late stage clinical
programs, inferring that it is not always a reliable equity generating strategy for
a company.
Risk: Small biotech/specialty pharma companies are risky businesses few
generate sufficient capital to complete the drug development cycle. Many
outside the industry consider the smaller companies the equivalent of a project
team in a larger company.
Profit Margins: Once a drug is on the market, its possible to see 75- 80% profit
margins, depending on the alternative drugs available. Historically - although
less common today - it is not unusual for a biotech company to be public without
product revenue for many years.
Virtual Companies: One of the trends in drug development is to hire very
experienced experts in their domain and outsource various functions almost all
functions can be outsourced: research, preclinical development, clinical trials,
manufacturing, sales, IT and HR - including staffing and payroll.
Its a small world: Given the number of science PhDs in biotech, and the limited
number of biotech clusters around the country, there are a lot of people that
know each other. More than other industry networks, those who work in the
biotech/pharma industry have strong informal connections including
husbands/wives that work in the industry.
Industry Influencers:
Intellectual Property
FDA/Compliance
Government & Third Party Payers
Wall Street
Patients/ Advocacy Groups
Academia/Key Opinion Leaders
Big Pharma
The interdependencies between biotech/specialty pharma companies and these
market influences are complex and all impact business strategy. Each industry
influencer can adversely impact a company and most are factored into a
companys business strategy.
Understanding Scientists: This has been written to support HR/OD professionals
in understanding their internal customers.
Academics: It takes 5- 8 years of graduate work to be a PhD scientist, some
have an additional 1-3 years of post graduate research and most are funded by
grants, earning a minimal living as they go through school.
Data: Scientists are taught that data, facts and research trumps everything.
A players: Scientists tend to be high achievers and less tolerant of people that
are not equally smart or data driven. They are used to getting high marks for
their creative ideas, rational thinking and intelligence.

Management Skills: Many Scientists are promoted into management because of

their scientific skills and accomplishment which are not always a proxy for their
people/managerial talent or prospects.
Competition: Some PhDs were taught to thrive on conflict, heated discussions,
and arguments to vet ideas so that the best idea would rise to the top. It is not
uncommon for some academic labs to purposefully set their graduate students
and/or postdocs against each other to maximize productivity and publications.
Lineage/advisors: In the academic world, who you have studied under can be
more important than ones scientific focus. Lineage is key as this is also ones
network after graduating (like going to Harvard vs. a community college).
Publishing papers: Its all about publishing papers in academia - the more papers
with your name as one of the authors (preferably lead author), and the more
referenced the paper, the better. In general, your title, your identity and your
career is shaped by the papers you write. This is also a place where companies
are different there is tension between allowing publishing of a paper and
divulging program status and corporate intellectual property (IP)
Source : MaryAnn Ireland
Recommended by :
CHRISTOPHER T. ANDERSON, SPHR, CBS
Vice President, Human Resources
Mlnlycke Health Care, Atlanta, GA
email: ctanderson209@sbcglobal.net
https://www.linkedin.com/in/chrisandersonsphr
Mlnlycke Health Care, Abbott Laboratories, Hospira Inc., Hill-Rom, The Ertl
Company
Pharma, Pharmaceuticals, Biopharm, Biopharmaceuticals, Medical Devices,
Biotech, Biotechnology

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