custom chemicals. In the challenging economic environment all of us are facing, Senior Correspondent Ann Thayer looks at how contract manufacturers are coping with the economy and with changes at their pharmaceutical customers.
"After bemoaning the slowing growth of the drug industry in recent years," Thayer writes, "custom chemical manufacturers are taking solace in having these companies as customers. Pharmaceuticals, they are finding, are a bright spot in the current economic maelstrom."
Despite the fact that health care is less cyclical than other markets for chemicals, custom manufacturers continue to face significant challenges, Thayer writes. Growth in the U.S., the world's largest market for drugs, will slow to just 1 to 2% per year, and potential changes in health care policy by the incoming Obama Administration "are compounding uncertainties at a time when regulatory hurdles are already rising and making approvals less predictable."
And although large pharmaceutical firms are increasingly outsourcing manufacturing, it does not necessarily offset the continuing decline in productivity of the drug development pipeline. Combine that with the severe shortage of equity funding and with the delay or cancellation of drug company projects and you have a sense of the challenges even strong custom manufacturers face.
The lead Business Department story by Senior Editor Rick Mullin focuses on the prospects in the coming year for the biopharmaceutical sector. Because of the sector's heavy reliance on venture funding and other sources of capital that have largely disappeared, many companies are cutting back on R&D and laying off staff, Mullin reports.
Another annual feature in this week's issue is the Congressional Outlook produced by the Government & Policy Department staff, led by Assistant Managing Editor Susan Morrissey. For Congress, what a difference a year makes. In last year's outlook, the team wrote, "So as with most recent Congresses, progress this year will be slow." This year, with both houses now firmly in the hands of Democrats and an incoming Democratic Administration, coupled with the economic tailspin, the 111th Congress is expected to hit the ground running.
"The congressional agenda, although dominated by the economy and the budget, will include some science and technology issues," the team writes. "The biggest priority will be bicameral efforts to combat global warming. Congress is also expected to pass permanent regulations governing chemical plant security, increase food and drug safety policies, and reauthorize the federal initiative to coordinate nanotechnology research and development."
The imminent departure of the Bush Administration, with its overt antipathy to many areas of science, is being met by an almost audible sigh of relief among the science and technology policy community in Washington, D.C. As Senior Correspondent David Hanson points out in the Government & Policy Insights, under George W. Bush, the President's Council of Advisors on Science & Technology (PCAST) was a nearly moribund outfit. By contrast, President-Elect Obama has already named his science adviser and the cochairs of PCAST, all of them highly respected scientists and experts on science policy.
Finally, allow me to note that the economic challenges facing the country also face the American Chemical Society and C&EN. As I noted in last week's issue, C&EN is trimming its editorial page budget. Throughout the year, some stories that would have ordinarily appeared in print and on C&EN Online will be accessible only online. In the "Table of Contents" of each week's issue, we will point to these stories with the symbol instead of a page number. This week's Business Department story "Clustering in Heidelberg" by Senior Correspondent Patricia Short is the first such department story to appear online only. There is, of course, a wealth of other news and content at C&EN Online. Please check it out.
Thanks for reading.
I think of this issue as C&EN's "outlook" issue. Several stories this week examine the year ahead for different components of the chemistry enterprise.
The cover stories are an annual feature that focuses on