Offshoring Trends Net Biotech Firms

Makarand writes "According to this article in the San Francisco Chronicle, BioTech, once considered to be the next innovative sector to help offset the jobs losses from IT offshoring, is showing signs of riding an offshoring wave of its own. Foreign governments with a national priority to attract biotech businesses with highly trained research workers and new research centers are the new forces to reckon with in preventing the exodus of biotech jobs. Drug developers are looking at ways to cut costs of drug development as Americans and their employers are starting to constantly worry about the high price of prescription drugs. The lower costs of clinical trials and the ease with which human subjects can be recruited for drug tests in other countries are making biotech jobs susceptible to offshoring."

Comments

Shocking!

[zors]

Is anyone else not surprised at all?

Businesses outsource, even tech ones, even biotech ones now.

Shocking.

Oh, and f1r57 p057!

People complain about offshoring

[Anonymous Coward]

But do they ever stop to think that these people may be the best suited to the job?

The point is they do the work for cheaper than most would, and you'll find the majority do it just as well as a local. I guess we wouldn't have this problem though if our culture wasn't so based around the evil that is money.

Capitalism

[gid13]

Correct me if I'm wrong, but isn't outsourcing a shining example of capitalism working exactly as it should? People always get so bent out of shape about it, but fundamentally it's rewarding the people/countries who are willing and able to do the same work for less. If you look at the unequal distribution of wealth as a problem (which I do), then the good news is that poor countries will get richer, as will the uber-rich that now have to pay their workforce less. The bad news is for the middle class. American left-wingers would do well to remember that the people receiving out-sourced jobs probably need them more than Americans. And American right-wingers would do well to remember that unless they're very rich, they're likely getting shafted.

Re:Capitalism

[arvindn]

A minor point, but its an example of the free market working as it should, rather than capitalism. They're not the same thing.

Its actually more than equal distribution of wealth. When jobs go to those who are able to perform them most efficiently, the economy as a whole improves. Therefore, in the long run, America benefits from outsourcing. Of course, the narrow segment of the workforce whose jobs are being outsourced loses, but overall its beneficial.

I find it a little funny that slashdotters are real quick to point out that the RIAA doesn't want to adapt to the changing market realities and has thus become obsolete, whereas all that they themselves will do is to complain, rather than adapt to the situation.

Is this sick or is it just me?

[Noryungi]

The lower costs of clinical trials and the ease with which human subjects can be recruited for drug tests in other countries are making biotech jobs susceptible to offshoring.

Does anybody else finds this... well... horrible and sinister? So, just because consumers want a modicum of security -- and security means more expenses -- big pharma is outsourcing human testing?

As in, testing potentially dangerous new products on poor (non caucasian, perhaps?) people is sooooo much cheaper in [insert favourite country here]?

So, on one hand these big companies are making tons of dough off their rich consumers. Then, they refuse to sell certain drugs *cough cough* AIDS *cough cough* in poor countries (no enough profits to be made in Africa, mate!). Then, they put pressure on third-world countries (Brazil, India, etc) who decide to copy these products anyway.

Then , they simply outsource human testing, because "we big corporations have a God-given right to make even more profit ". Even if it means less security and more unemployed.

Is this sick or what?

Cost of medical anything in the US

[Rosco P. Coltrane]

Drug developers are looking at ways to cut costs of drug development as Americans and their employers are starting to constantly worry about the high price of prescription drugs.

Countries like Brazil have taken to producing drugs like tri-therapy drugs for AIDS without paying the license, to make them affordable for their population, as a matter of national emergency. Others, like India, have made an entire industry out of producing generic drugs.

These medicines are cheap, yes, but the cost is offset onto the newer meds, those that are still produced exclusively, or under license, that aren't in the public domain yet. That's why, when countries hurt the bottom line of pharmaceutical companies, said companies jack up the price of the top line.

Combine that with the cost of doing any sort of medical-related business in the US, due mainly to insurance costs, due in turn to ligitation-happy Americans, and you know why certain silly little pills can cost hundreds of dollars.

I'm not saying pharmaceutical labs aren't also part of their own problem (it's in great part their very greediness that made the generic knockoffs industry the huge success it is in the first place), but with their margins reduced all the time, it's not wonder they try to cut cost and practice off-shoring. And time has shown that it's not their sense of morals that will compel them to hire local workers...

international competition != offshoring

[hak1du]

"According to this article in the San Francisco Chronicle, BioTech, once considered to be the next innovative sector to help offset the jobs losses from IT offshoring

I know this is sometimes hard for Americans to understand, but the US is not the only nation with advanced research and development. And just because the US likes to think of biotech and computers as "American" technologies industries, they have always been, and continue to be, international efforts.

Note, also, that European and Asian companies have been "off-shoring" to the US for decades: a lot of their R&D, marketing, and financial services have been located in the US.

Foreign governments with a national priority to attract biotech businesses with highly trained research workers and new research centers are the new forces to reckon with in preventing the exodus of biotech jobs.

After decades during which the US has siphoned off the best and brightest from all around the globe ("brain drain"), with high-paying jobs and a good standard of living, it is only natural that other nations are finally trying to do something about it. The real question is why this hasn't happened earlier. Maybe nations like Britain will finally pay their researchers a decent salary, and maybe nations like Japan will finally pay respect to their researchers.

Of course, the implications for the US are not so good: US R&D is based on highly-skilled immigrants. If that flow stops, it may temporarily create a little more demand for US workers, but it will primarily make the US overall far less competitive.

Will the confidential data be secure though?

[Slashdot Hivemind]

I worked for a bank for a few years (in a country far away, where they have numbered accounts and you're actually looking at jail time for revealing customer data) and something like this was just unheard of.

The absolute main security issue was customer data. Not that they would have fancied embezzlement or theft but this was looked upon far less serious then compromising customer data, period.

In the data centers (which you had to physically access in order to query real customer data, safe for the front office and also there it was very restricted what you could look at) you had to go through multiple layers of security and where not permitted to even remove a printout.

Computers where dismanteled and disks shredded, they where never for resale. This was applicable for every last computer from every last branch and office

Now, I agree shit happens. Probably in their case it started with outsourcing such a critical tasks to "ACMEs chep disk blanking operation" in order to save a few bucks. This is not really excusable, but it happens.

But what really gets my blood boiling are statements like the one from that PR bimbo, which are just utter bullshit.

Maybe she should apply for a job at Microsoft to sell "trustworthy computing".

Re:Ironic

[zero_offset]

the government wouldn't need to make a profit

Which is precisely why the government will never be able to do anything more cheaply over the long term. There is no incentive to streamline. Costs are passed directly on to the consumer/taxpayer, who no longer has a choice in the matter.

Speaking as someone who wrote electronic insurance filing software for a number of years, I can tell you the US government is already a vast, inefficient bureaucracy when it comes to the relatively small involvement in healthcare it has today (the key word is "relatively"...)

Beware the Ides of March

[panurge]

Seriously. The world seems to be going more and more down the route of the Roman Empire, in which a small class became fabulously rich and the vast majority were poor and acted as a reservoir to supply cheap labor and the Army. It's perhaps worth remembering that Julius Caesar was the chosen figurehead of the capitalist party (the industrialists or the Plebians) against the traditional agricultural/religious aristocracy, the patricians. The difference between Caesar and Bush was that Caesar was a man of enormous ability who dealt effectively with internal problems and foreign threats, but that's a side issue.

The problem for the Empire was that it gradually outsourced everything to the provinces - the grain supply (Egypt), mining, other agriculture. Like the US it imported the most able provincials and gave them citizenship to encourage them to support the system. But eventually the focus of power moved to the provinces, Rome itself became decadent (who needed to earn a proper living?) Even most of the army was recruited abroad. And the Empire collapsed. The remains of the Empire that survived - in Byzantium - was a statist civilisation in which capitalism was rigorously controlled, based around many small artisans and companies of very limited size, in which the Government interfered in production, distribution and exchange. Sound like anywhere?

Endless outsourcing may be capitalism, but what happens on the day when R&D is carried out abroad, manufacturing is all done abroad, the Internet, cheap broadcasting and cheaper film making has destroyed the US dominance in media, the US army is too small to control even a small dissident country (look at the problems posed by Iraq...we could kill everybody, but imagine the backlash), the rest of the world sees that the Emperor has no clothes, and the dollar collapses?
Live off intellectual property? Can you imagine the rest of the world agreeing to observe US patents which frequently would not get through the assessment stage in European countries?
At that point the super-rich will be sitting on piles of worthless dollars, and farming may look like the smart option again.

OK, it probably won't be that bad. But too much policy at the moment seems to be predicated on the idea that the US can control the rest of the world financially or militarily, and the example of Rome shows that unrestricted capitalism is likely to destroy the very factors that make that possible.

Re:Beware the Ides of March

[Jameth]

One big difference which will be important when that collapse does happen is that the US is capable of being self-sustaining.

The midwest still produces, even with how unpopular farming is these days, enough food for all of the US. The US exports a lot of food. For many types of food, it is the largest exported in the world.

Also, the US has been, for a while, importing raw materials it could get at home. If the need arises, the US can plunder many reserved areas for resources. The US has an enormous amount of national parks which likely have useful minerals in them, but the US government prevents them from being accessed. In a case of necessity, we could rape our own country instead of the rest of the world.

I've always thought the US/Rome comparison very apt, although I never knew enough about Rome to explain it well. However, I suspect that the heart of Rome was not quite a resource rich as the US, which happens to be one of the more resource rich countries in the world (no, seriously, the land in the US is just great). An example of a country which really couldn't survive that is Japan, so it always needs to be much more careful. Japan has virtually no natural resources and relies entirely on staying ahead technologically. Although I haven't looked into it much, I suspect the same is true of mant European countries, as they are very densely populated.

Also, in regards to Iraq, that is perhaps not the best example of the US army at work. Iraq is not a war, Iraq is an occupation, which is significantly different. The 'war' in Iraq was trivial, and that is what the US is good at. Most other countries still realize that, if a full-blown war arises, the US army is a very scary thing to mess with.

Re:Ok, no problem.

[maxpublic]

Or are you the kind of person that wants to have his cake and eat it, resell it, outsource it, etc...?

Sure, why not? America doesn't owe the rest of the world a damned thing. Other countries are perfectly free to pass their own laws in that regard, if that's what they wish to do. But as an American, I'm not obliged to look out for the interest of any other nation or people. I can if I like, as an individual, but I'm not *obligated* to - nor is my government.

The government of America is for Americans, and no one else. It's that simple. If corporations wish to essentially become foreign entities by moving jobs and resources to foreign nations, then they should be treated as such. In fact, so far as I'm concerned they should simply move their entire operation to that nation, register as a corporation of that nation, and be treated as such by the American government. They deserve no handouts, no tax breaks, no protection under American law, and no benefit from American trade agreements with other nations.

Let's see how long those former American companies last when they're wholly Indian in both name and law. Let's see how well they do when they have to operate on the other side of a tariff barrier.

Max

Re:Don't panic

[TheLoneCabbage]

Is he overly optimistic? yes.

Is he wrong? No.

I am outside the country, and I will tell you this. The US has massive buisness and hightech advantages over the rest of the word. Stemming not only from America's relatively unique culture (yes, there is culture in the US), but also it's massivley agressive and competative buisness support industries; which I'm sorry but don't really exist out side the US.

Americans ARE allowed to fail, without massive pressure. This is something not found in places like Asia (also known for having the worlds highest suicide rates). Remember Failure is the single most important ingrediant in Success. If you do not take failure well, you will never be a winner in business.

Americans are HIGHLY individualistic, and have thick skins. They(we) don't get bent out of shape over personal failures, or insults. Note to Americans: Most other cultures do not take well to being 'teased'.

Americans are risk takers, in the extreme (go find me another country with a higher rate of gambling addiction).

Americans are work aholics; it's not tacky to ask an American what he/she does for a living, and in many cases even how much he/she makes. Americans define themselves by their work.

Americans are brash, loud, and arogant. All great ways to get noticed.

Americans have NO idea what the world is like outside their shores. It's a double edge sword. If Americans were poor they'd stay that way, but since their wealthy, the world tends to emulate them. Meaning they are always the leed dog.

Will it always be that way? Every dog has his day. But that day, is not today.

The problem with outsourcing....

[RayBender]

...is that one of the primary reasons certain other countries are able to "do it for less" is that they don't have the same labor laws, the same environmental protection laws, and the same workplace safety regulations. It took a hundred years of political activism and organization to achieve such things as the five-day work-week, OSHA regulations, the EPA, the clean air act, minimum wage laws, collective bargaining rights and Social security. These are all either things that make the middle class, or a decent life at all, possible. "Outsourcing" has become a way for managment to bypass all of that and bring us back to the heady days of laissez-faire capitalism. That may be great for the capitalist, but it sucks for everyone else.

Sure, from the safety of the upper class, and with most of your income being from investments, outsourcing looks great - all that cheap stuff available at Target, eh? But if you're 50, have two kids and a mortgage, and happen to, say, be an engineer for a telcom, hearing that your getting laid off "will be good for the American economy in the long run" isn't much solace.

Offshore tests don't necessarily apply

[RhettLivingston]

The idea that all people are just as suited for testing drugs is very incorrect. For a drug trial to truly translate to an American population, it would have to be performed on a population with roughly the same ethnic mix and environment. It is not at all unusual for drugs and poisons to effect various populations differently.

An example of this is PCBs. The original tests on PCBs back in the 50s and 60s were performed on an Indian (as in from India) population. They found a fairly high risk of cancer and that is why we started working to reduce and eventually nearly eliminate PCB usage in America. Interestingly, later tests on other ethnic groups found that ethnic groups of European and African descendency demonstrated virtually no cancer response to PCBs. Indians were the worst with other Oriental groups showing decreased, but still present cancer responses. The cancer response amongst the Japanese was the least of the Oriental groups, though still present. This in no way says that we shouldn't have reduced our usage of PCBs since there are people of Oriental descendency in our society, but it does demonstrate that medical tests do not always translate even at a gross level from one group to another. If we had never tested PCBs on people of Oriental origin, we wouldn't have banned them.

In many ways, there is a more disconcerting flip side to this that has been largely ignored by the so-called "medical science" (I put that in quotes because they ignore so many factors, it is hard to say that they are a legitimate science). The flip side is that because we ignore ethnic origin and many "how they live their life" type factors of the people involved in tests and we don't work hard to identify the factors that cause failure in a drug for the typically small percentage that do have adverse effects with many otherwise beneficial drugs, we are very likely missing out on many drugs that might be very beneficial. Biology is not blind to these factors and we shouldn't be either if we truly want to call it or make it a science.

The genetic sciences are probably the answer. Eventually, we should see a process evolve of prescribing drugs according to genetic tests that determine precisely how a particular individual will respond. At that point in time, they can hide the ethnic factor by talking about the gene that interferes with the test instead of the ethnic groups that typically have that gene.

Again, where is the part it is good for us?

[beforewisdom]

I've read several posts across several threads on slashdot on this topic defending outsourcing.

Many of the posters are self assured to the point of smuggness, arrogance, and condescension.

I haven't seen any facts from them or other people who support offshoring.

Anyone who has had a decent education knows that what academia knows is not always as solid as academia would like everyone to think.

Add to that Economics is not a hard science and that there is disagreement among economists as to the value of outsourcing.

Where are the jobs?

How will outsourcing create jobs for Americans?

Will enough jobs be created for Americans?

Will the assumed forthcoming jobs come before a large number of people experience economic ruin?

Will the assumed forthcoming jobs be quality jobs that people can support famlies on and enjoy doing?

Will the assumed forthcoming jobs stimulate students to study subjects that will keep America competitive?

How....will outsourcing generate these jobs?

So far I haven't even seen attempts at these answers from anyone. At the most you some smugness with a statement that pretty much boils down to

"Don't, worry it will work out".

Most people would not accept that answer from a mechanic when they hear loud clanking noises from their car without a detailed explanation.

Yet, many people are willing to accept that answer for their careers and the future of their country.

I don't get a sense that these people are stupid.

Maybe the whole thing stresses people out so much they just assume what rich people tell us and what other people parrot is the truth to free themselves from having to worry about it.

Maybe it is just the high school football rivalarly mentality of party loyalty in American politics that leads to people parroting all of this stuff without finding answers to those questions.

Where's the beef?

If you are not working through no fault of your own you should consider whether or not the president should be working after this January.

Steve