In the last decade especially, pharmaceutical companies have become heavyweight contenders. But it's a paradoxical development. Analysts had been predicting a taming of the go-go 1980s growth, because of the rise of managed care, a more aggressive Commissioner at the Food and Drug Administration, and a President who wasn't so industry-friendly.

Instead, the pharmaceutical business profited from those seemingly negative factors. At the start of the 1990s, the big brand name drug companies were portrayed as enemies of the people by incoming President Clinton, who called them price-gougers. The government demanded and got price concessions for big federal purchasers like the Defense Department and the Medicaid program for the impoverished. Seeing an opportunity, managed healthcare plans (HMOs being the best-known), said they would start seeking the same kinds of discounts, and restricting their enrollees' access to higher-priced brand name pharmaceuticals.

From 1992 through 1994, drug companies' stock prices "were in a swoon, brought about by fears of HMOs and 'Clinton care'," the Administration's failed sweeping health insurance proposal, says Ira Loss, a pharmaceutical stock analyst with Washington Analysis. And sales were way off. According to the drug industry trade group, the Pharmaceutical Research and Manufacturers of America (PhRMA), in 1993, U.S. sales grew a paltry 1 percent, compared to 15.1 percent in 1991, the year before President Clinton took office.

Now, "stocks have more than recovered," he says. "It was determined that rather than a harm, HMOs were a huge benefit. With the emphasis on preventive medicine, the unit growth of pharmaceutical sales went through the roof," Loss says. There has been a growing recognition by health plans that, for instance, paying for asthma medications is more cost-effective in the long run than treating people who can't breathe on an emergency basis.

More people with chronic conditions like diabetes, high blood pressure, allergies, and high cholesterol are being given prescription medicines to help control those diseases, so they don't get sicker and end up needing surgery. Sales are also being driven by the introduction of so-called "lifestyle" drugs like Viagra to treat impotence and Propecia to alleviate baldness. These products and pills to treat obesity have drawn millions more consumers to their doctors' offices and pharmacy counters.

And of course, with the edge of the Baby Boom starting to roll "over the hill," pharmaceuticals will gain even more use for everything from cancer to Alzheimer's disease, which affects at least four million Americans. "As time goes on you're going to have a great population of people who expect more out of health care, are living longer, and have more discretionary money to take care of themselves," says James Walton, vice president of worldwide marketing for Abbott Laboratories' Diagnostics division.

Rising sales volumes have not completely taken the pressure off pharmaceutical companies. With most of the large manufacturers facing a loss of patent protection for their billion-dollar-blockbusters, which means cheaper generic versions will be allowed on the market, they are under the gun to find unique therapies, or new ways to make old therapies more convenient to take, according to Ira Loss. The big drug makers are trolling for smaller companies, especially biotechnology start-ups, to broaden their product portfolio, and to ensure they have a piece of future technologies, such as protein design and gene therapy.

The pharmaceutical business will often be tripped up by economic downturns when there's less money to buy drugs or by poor strategic moves. But it's not a flash-in-the-pan industry, driven by stock speculators and 20-year-old visionaries. Most of the large players today can trace their roots back to the turn of the century. The ones making the investment in research and manufacturing dubbed themselves "ethical" pharmaceutical companies to distance themselves from the outfits making "patent medicines," which tended to be snake oil.

Wall Street continues to place a high premium on pharmaceutical company stocks, not because they promise astronomical returns like Internet and telecommunications stocks do, but because they are long-term, stable investments. Many of those who work in the industry count on the same stability, but say there are deeper attractions. "You have the ability to help save lives," says Angela Knight, director of university relations for Merck & Co. "We have a lot of pride in what we do, helping individuals to have a more productive life," she says.

Growth Not Spectacular, but Steady

As more scientific discoveries pay off, and insurers and Americans more fully embrace pharmaceuticals as life-improvers and life- savers, sales of drugs have risen fairly steadily over the last five-to-ten years. According to IMS America, a Pennsylvania-based company that tracks statistics for the drug industry, worldwide sales in 12 key international markets grew an average 8 percent from August 1998 to July 1999. Total sales for those markets: $197 billion.

The U.S. market had the strongest growth, 12 percent, but European and Asian demand were also increasing, reflecting that the growing reliance on pharmaceuticals is not just an American phenomenon. Drug stores are benefiting from the rising demand. The National Association of Chain Drug Stores predicted its pharmacies would sell $121 billion of prescriptions in 1999, a whopping 18 percent increase from the previous year. The group estimated 31,000 U.S. pharmacies would dispense 2.97 billion prescriptions. That's a lot of prescriptions per person, given that the American population is about 270 million.

As a result, health plans are spending more on drugs. Loss says about 10 percent of each dollar spent for healthcare goes to pharmaceuticals, up from 5 percent a few years ago. Osteoporosis, a mostly age-related thinning of bones, shows how drugs are changing people's lives and perspectives. Drugs that help prevent the condition reduce the risk of hip and spinal fractures in older women by half, says PhRMA. That keeps them out of the hospital and off the disabled list. Anti-osteoporosis drugs such as Merck's Fosamax and Eli Lilly's Evista are being snapped up.

More products to treat the ills of aging are on the way. PhRMA estimates its member companies are developing 600 new treatments for age-related conditions, including more than 100 for heart disease and stroke, 350 for cancer, and 200 for Alzheimer's disease, arthritis, diabetes and osteoporosis.

More Products Equal More Opportunities

There are about 20 large companies involved in everything from brand-name drugs to generic drugs, diagnostic tests to home pregnancy tests, band-aids to gum, to cutting edge angioplasty catheters and gene therapies. Included among these major companies are Abbott Laboratories, American Home Products, Bristol-Myers Squibb, Glaxo Wellcome, Hoffmann-La Roche, Johnson & Johnson, Eli Lilly & Co., Merck & Co., Pfizer, Pharmacia & Upjohn, Rhone-Poulenc Rorer, Schering-Plough, SmithKline Beecham, and Warner-Lambert. In mid-1998, PhRMA estimated that its members employed about 200,000 people in the U.S., with another 184,000 overseas. That was up from 175,000 American workers in mid-1997.

Pharmaceutical companies are among the most research and development(R&D)intensive in the U.S., plowing a large portion of profits into creating new growth. In 1999, the companies spent about $24 billion, or 20 percent of sales, on R&D, says PhRMA. Most industries spend 4 percent or less on new product development. Because the companies invest so much in finding new therapies, that's where they focus their energy when recruiting.

In 1997, 67 percent of workers engaged in R&D had a B.S. or M.S. degree; about 30 percent had a Ph.D., and only 4.1 percent were M.D.s, according to PhRMA. But drug companies aren't just looking for help in developing products. "Most people look at us as an organization of purely R&D," says Knight of Merck. "That's not the case." In addition to people with biology and chemistry backgrounds, Merck is looking for engineers, people who specialize in information technology and library science, systems and computer-science. Information specialists will be more in demand as companies delve into solving the human genome or genetic material of an organism. The computer-savvy will be needed to help crunch the numbers involved in finding out which genes are bad and which are good.

With 57,000 employees worldwide, Merck has an active minority recruitment program as well, says Knight. The company partners with several minority-focused organizations, such as the National Society of Black Engineers, and urges students to participate in the summer intern program, Knight says. "I think for the industry as a whole, the opportunities are greater than they've ever been," says Allen Tate, executive director of marketing training for Merck. "When I broke in 10 years ago, there was less opportunity. I have seen very positive changes," he says. Tate worked his way up from a lab-based research post to his current position, managing 200 or so people who help design Merck's marketing strategies.

Walton, of Abbott, also says his company is actively recruiting for diversity. The Chicago-area manufacturer is seeking chemistry, finance, engineering, biology, accounting, and sales majors. But Walton says Abbott is as interested in what you've accomplished outside of school as what you've studied. "It's not so much that you have to have a very precise background, but with a successful background and a lot of ambition, you can find your way here," he says.

In addition to people with science and engineering backgrounds, pharmaceutical companies increasingly need financial, marketing, sales, and legal specialists. Once the products have proven themselves in clinical trials, which can be a 10 to 12 year process, they are getting FDA approval faster, thanks in part to subsidies from the industry to speed up review. In 1998, the FDA approved 90 pharmaceuticals, 30 of which were completely unique. Once a company's application for approval was submitted, it took the agency an average of 12 months to review the product, down from almost 24 months in the early 1990s. The FDA was on the same pace in 1999.

That's keeping pharmaceutical companies hopping. Many can't hire sales people fast enough. In 1998, Merck hired 700 new sales representatives to meet with physicians, says Knight. But detailing doctors is just one facet of the sales effort. Direct-to-consumer advertising has exploded with companies spending $1.5 billion in 1998 on television and print advertising, according to IMS America.

Rolling into the New Century

The multi-billion dollar, multi-national conglomerates that make up the pharmaceutical industry may get rocked occasionally leading to layoffs or profit declines. But the U.S. economy is increasingly driven by science and technology, and drug companies are among the leaders in translating discoveries into reality and sales. That means it will always need fresh blood. Despite the latest fear that the government will start paying for senior citizens' pharmaceuticals through Medicare, which could lead to further discounting, the industry will likely benefit.

"We're going full speed ahead," says Kevin Renehan, director of Recruitment Marketing at Johnson & Johnson, which has 94,000 employees worldwide in pharmaceuticals, consumer and surgical products, medical devices, and diagnostic equipment. "We filled more positions {last} year than {the previous} year, particularly in the pharmaceutical business."

Alicia Ault is a contributing writer in the Washington, D.C. area who has covered the pharmaceutical industry for more than a decade.