Pharmaceutical giant Roche just dropped a bomb: The company will be laying off 1,000 employees and shutting down its R&D center in Nutley, NJ, a facility where Valium and other breakthrough drugs were discovered over the past 80 years. Research activities will now instead be redistributed to other locations in Switzerland and Germany, although the number of new jobs will not come close to replacing the ones lost.
The latest move is just part of a troubling trend that finds U.S. pharmaceutical companies exporting research to Europe and Asia at alarming rates. According to Roche, closing the Nutley division was necessary to minimize R&D costs with the research arm taking the biggest hit as a greater number of programs in development enter the pipeline.
ACSH s Dr. Gilbert Ross expressed grave concern about this trend: While the bean-counters can be excused for their short-sighted point of view, the industry as a whole needs to look at the bigger picture if drug R&D in our country is ever going to return as a driver of both our excellent health and our economy.
This is one more indication of where US-based drug discovery is going down the toilet, says ACSH s Dr. Josh Bloom. The latest corporate jargon risk management really means that companies have determined that it s too risky and expensive to spend years discovering and developing a drug in the US. So, instead of investing more in R&D, drug companies are focusing on acquiring and developing the leads they buy from smaller companies. He adds, What remaining research is being done, however, is increasingly being farmed out to China and India especially chemistry. It s a very bad time to be a chemist, and this will only get worse, as this trend continues.