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Pharmaceutical and Medicine Manufacturing

Industry Overview
The pharmaceutical and medicine manufacturing industry develops and produces a variety of medicinal and other health-related products that save the lives of millions of people from various diseases and permits many people suffering from illness to recover to lead productive lives.

The U.S. pharmaceutical industry has achieved worldwide prominence through research and development (R&D) on new drugs, and spends a relatively high proportion of its revenue on R&D compared with other industries. Each year, pharmaceutical industry testing involves millions of compounds, yet may eventually yield fewer than 100 new prescription medicines.

For the majority of firms in this industry, the actual manufacture of drugs is the last stage in a lengthy process that begins with scientific research to discover new products and to improve or modify existing ones. The R&D departments in pharmaceutical and medicine manufacturing firms start this process by seeking and rapidly testing libraries of thousands to millions of new chemical compounds with the potential to prevent, combat, or alleviate symptoms of diseases or other health problems. Scientists use sophisticated techniques, including computer simulation, combinatorial chemistry, and high-throughput screening (HTS), to hasten and simplify the discovery of potentially useful new compounds.

Most firms devote a substantial portion of their R&D budgets to applied research, using scientific knowledge to develop a drug targeted to a specific use. For example, an R&D unit may focus on developing a compound that will effectively slow the advance of breast cancer. If the discovery phase yields promising compounds, technical teams then attempt to develop a safe and effective product based on the discoveries.

To test new products in development, a research method called "screening" is used. To screen an antibiotic, for example, a sample is first placed in a bacterial culture. If the antibiotic is effective, it is next tested on infected laboratory animals. Laboratory animals also are used to study the safety and efficacy of the new drug. A new drug is selected for testing on humans only if it either promises to have therapeutic advantages over drugs already in use or is safer. Drug screening is a laborious and costly process—only 1 in every 5,000 to 10,000 compounds screened eventually becomes an approved drug.

After laboratory screening, firms conduct clinical investigations, or "trials," of the drug on human patients. Human clinical trials normally take place in three phases. First, medical scientists administer the drug to a small group of healthy volunteers to determine and adjust dosage levels, and monitor for side effects. If a drug appears useful and safe, additional tests are conducted in two more phases, each phase using a successively larger group of volunteers or carefully selected patients. The final round of testing often involves a very large panel, sometimes upwards of 10,000 individuals.

After a drug successfully passes animal and clinical tests, the U.S. Food and Drug Administration's (FDA) Center for Drug Evaluation and Research (CDER) must review the drug's performance on human patients before approving the substance for commercial use. The entire process, from the first discovery of a promising new compound to FDA approval, can take over a decade and cost hundreds of millions of dollars.

After FDA approval, problems of production methods and costs must be worked out before manufacturing begins. If the original laboratory process of preparing and compounding the ingredients is complex and too expensive, pharmacists, chemists, chemical engineers, packaging engineers, and production specialists are assigned to develop a manufacturing process economically adaptable to mass production. After the drug is marketed, new production methods may be developed to incorporate new technology or to transfer the manufacturing operation to a new production site.

Most pharmaceutical production plants are highly automated. Milling and micronizing machines, which pulverize substances into extremely fine particles, are used to reduce bulk chemicals to the required size. These finished chemicals are combined and processed further in mixing machines. The mixed ingredients may then be mechanically capsulated, pressed into tablets, or made into solutions. One type of machine, for example, automatically fills, seals, and stamps capsules. Other machines fill bottles with capsules, tablets, or liquids, and seal, label, and package the bottles.

Quality control and quality assurance are vital in this industry. Many production workers are assigned full time to quality control and quality assurance functions, whereas other employees may devote part of their time to these functions. For example, although pharmaceutical company sales representatives, often called detailers, work primarily in marketing, they engage in quality control when they assist pharmacists in checking for outdated products.

Industry Organization
The pharmaceutical and medicine manufacturing industry consists of over 2,500 places of employment, located throughout the country. R&D laboratories perform the work of drug discovery and development, while manufacturing plants produce the final drugs for consumers. Most R&D laboratories are located separately from manufacturing plants, but some labs and production plants are integrated.

There are three main types of pharmaceutical companies. Large, or mainline, pharmaceutical companies are established firms that have many approved drugs already on the market. These companies often have significant numbers of R&D laboratories and manufacturing plants throughout the Nation and around the world. In contrast, smaller pharmaceutical companies are usually newer firms that often do not have any approved drugs on the market. As a result, these firms almost exclusively perform R&D. In addition to developing their own drugs, some small pharmaceutical companies perform contract research for other pharmaceutical companies. Finally, generic pharmaceutical companies manufacture drugs that are no longer protected by patents. Because their products are all established drugs, they devote fewer resources to R&D and more to manufacturing.

Recent Developments
Advances in biotechnology are transforming drug discovery and development. Bioinformatics, a branch of biotechnology using information technologies to work with biological data like DNA, is a particularly dynamic new area of work. Scientists have learned a great deal about human genes, but the real work—translating that knowledge into viable new drugs—has only recently begun. So far, millions of people have benefited from medicines and vaccines developed through biotechnology, and several hundred new biotechnologically-derived medicines are currently in the pipeline. These new medicines, all of which are in human clinical trials or awaiting FDA approval, include drugs for cancer, infectious diseases, autoimmune diseases, neurologic disorders, and HIV/AIDS and related conditions.

Many new drugs are expected to be developed in the coming years. Advances in technology and the knowledge of how cells work will allow pharmaceutical and medicine manufacturing makers to become more efficient in the drug discovery process. New technology allows life scientists to test millions of drug candidates far more rapidly than in the past. Other new technology, such as regenerative therapy, also will allow the natural healing process to work faster, or enable the regrowth of missing or damaged tissue. In addition, technology based on the study of genes is being explored to develop vaccines to prevent or treat diseases that have eluded traditional vaccines, such as AIDS, malaria, tuberculosis, and cervical cancer.

Advances in manufacturing processes are also impacting the industry. While pharmaceutical manufacturers have long devoted resources to new drug development as a source for future profits, firms are increasingly realizing that improvements throughout the drug pipeline are needed to stay competitive. Along with other manufacturing industries, pharmaceutical manufacturers are realizing that quality products can best be produced when quality improvements occur at all stages and when processes are continually updated with the latest technologies and methods. Controlling the product flow through the supply chain also ensures that valuable resources do not sit idle but are put to work, and that final products reach consumers without delay.

Working Environment 
Working conditions in pharmaceutical plants are better than those in most other manufacturing plants. Much emphasis is placed on keeping equipment and work areas clean because of the danger of contamination. Plants usually are air-conditioned, well lighted, and quiet. Ventilation systems protect workers from dust, fumes, and disagreeable odors. Special precautions are taken to protect the relatively small number of employees who work with infectious cultures and poisonous chemicals. With the exception of work performed by material handlers and maintenance workers, most jobs require little physical effort.

Pharmaceutical and medicine manufacturing provided 289,800 wage and salary jobs in 2008. Pharmaceutical and medicine manufacturing establishments usually employ many workers. About 87 percent of this industry's jobs in 2008 were in establishments that employed more than 100 workers. Over half of all jobs are in California, New Jersey, Puerto Rico, Pennsylvania, and New York.  Under the North American Industry Classification System (NAICS), workers in research and development (R&D) establishments that are not part of a manufacturing facility are included in a separate industry—research and development in the physical, engineering, and life sciences. However, due to the importance of R&D work to the pharmaceutical and medicine manufacturing industry, drug-related R&D is discussed in this statement even though a large proportion of pharmaceutical industry-related R&D workers are not included in the employment data.

STEM Degree Paths into this Industry
About 31 percent of all jobs in the pharmaceutical and medicine manufacturing industry are in professional and related occupations, mostly scientists and science technicians. About 27 percent of jobs are in production occupations, including both low skilled and high skilled jobs. The remaining jobs are primarily management, and office and administrative support occupations.

Scientists, engineers, and technicians conduct research to develop new drugs. Others work to streamline production methods and improve environmental and quality control. Life scientists are among the largest scientific occupations in this industry. Most of these scientists are biological and medical scientists who produce new drugs using biotechnology to recombine the genetic material of animals or plants. Biological scientists normally specialize in a particular area. Biologists and bacteriologists study the effect of chemical agents on infected animals. Biochemists study the action of drugs on body processes by analyzing the chemical combination and reactions involved in metabolism, reproduction, and heredity. Microbiologists grow strains of microorganisms that produce antibiotics. Physiologists investigate the effect of drugs on body functions and vital processes. Pharmacologists and zoologists study the effects of drugs on animals. Virologists grow viruses, and develop vaccines and test them in animals. Botanists, with their special knowledge of plant life, contribute to the discovery of botanical ingredients for drugs. Other biological scientists include pathologists, who study normal and abnormal cells or tissues, and toxicologists, who are concerned with safety, dosage levels, and the compatibility of different drugs. Medical scientists, who also may be physicians, conduct clinical research, test products, and oversee human clinical trials.

The work of physical scientists, particularly chemists, also is important in the development of new drugs. Combinatorial and computational chemists create molecules and test them rapidly for desirable properties. Organic chemists, often using combinatorial chemistry, then combine new compounds for biological testing. Physical chemists separate and identify substances, determine molecular structure, help create new compounds, and improve manufacturing processes. Radiochemists trace the course of drugs through body organs and tissues. Pharmaceutical chemists set standards and specifications for the form of products and for storage conditions; they also see that drug labeling and literature meet the requirements of State and Federal laws. Analytical chemists test raw and intermediate materials and finished products for quality.

Science technicians, such as biological and chemical technicians, play an important part in research and development of new medicines. They set up, operate, and maintain laboratory equipment, monitor experiments, analyze data, and record and interpret results. Science technicians usually work under the supervision of scientists or engineers.

Although engineers account for a small fraction of scientific and technical workers, they make significant contributions toward improving quality control and production efficiency. Chemical engineers design equipment and devise manufacturing processes. Bioprocess engineers, who are similar to chemical engineers, design fermentation vats and various bioreactors for microorganisms that will produce a given product. Industrial engineers plan equipment layout and workflow to maintain efficient use of plant facilities.

At the top of the managerial group are executives who make policy decisions concerning matters of finance, marketing, and research. Other managerial workers include natural sciences managers and industrial production managers.

Sales representatives, wholesale and manufacturing, describe their company's products to physicians, pharmacists, dentists, and health services administrators. These workers serve as lines of communication between their companies and clients.

Employment of wage and salary workers in pharmaceutical and medicine manufacturing, 2008 and projected change, 2008-2018.
(Employment in thousands)
Occupation Employment, 2008 Percent Change,


Number Percent


All occupations 289.8 100 6.1




Management, business, and financial occupations 51.9 17.9 3.9


Top executives 6.7 2.3 -6.6


Industrial production managers 4.5 1.5 1.7


Natural sciences managers 4.7 1.6 1.8


Accountants and auditors 2.8 1 5.3




Professional and related occupations 91.1 31.4 9.8


Computer specialists 11.3 3.9 4.3


Engineers 9.4 3.2 22.9


Biochemists and biophysicists 6.7 2.3 22.2


Microbiologists 3.1 1.1 1.5


Medical scientists, except epidemiologists 14 4.8 22.1


Chemists 16.4 5.7 1.8


Biological technicians 5.4 1.9 1.7


Chemical technicians 9.4 3.3 1.7




Sales and related occupations 6.9 2.4 -3.8


Sales representatives, wholesale and manufacturing, technical and scientific products 4.6 1.6 -5.4




NOTE: Columns do not add to total due to omission of occupations not directly related to degrees in science, technology, engineering, mathematics, or medicine.  Original Source: U.S. Bureau of Labor Statistics National Employment Matrix, 2008-18.


Industry Forecast
According to the U.S. Department of Labor, Bureau of Labor Statistics, eEmployment is expected to increase as demand for drugs continues to grow. Prospects should be favorable, particularly for life scientists with a doctoral degree.

Employment change. The number of wage and salary jobs in pharmaceutical and medicine manufacturing is expected to increase by 6 percent over the 2008-18 period, compared with 11 percent projected for all industries combined. Even during fluctuating economic conditions, demand is expected to remain strong for this industry's products, including the diagnostics used in hospitals, laboratories, and homes, the vaccines used routinely on infants and children, analgesics and other symptom-easing drugs; antibiotics and other drugs for life-threatening diseases, and "lifestyle" drugs for the treatment of nonlife-threatening conditions.

The use of drugs, particularly antibiotics and vaccines, has helped to eradicate or limit a number of deadly diseases, but many others, such as cancer, Alzheimer's, and heart disease, continue to elude cures. Ongoing research and the manufacture of new products to combat these and other diseases will continue to contribute to employment growth. Demand also is expected to increase as the population expands because many of the pharmaceutical and medicine manufacturing industry's products are related to preventive or routine healthcare, rather than just illness. The growing number of older people, who tend to consume more of all types of healthcare services, will further stimulate demand—along with the growth of both public and private health insurance programs, which increasingly cover the cost of drugs and medicines.

Another factor propelling demand is the increasing popularity of "lifestyle" drugs. These drugs treat symptoms of chronic nonlife-threatening conditions resulting from aging or genetic predisposition and can enhance one's self-confidence or physical appearance. Other factors expected to increase the demand for drugs include greater personal income and the rising health consciousness and expectations of the general public.

Despite the increasing demand for drugs, several factors will limit employment growth in the industry. Drug producers and buyers are placing more emphasis on cost effectiveness, due to the extremely high costs of developing new drugs. Competition from the producers of generic drugs also will put pressure on many firms in this industry as more brand-name drug patents expire. On the manufacturing side, continuing improvements in manufacturing processes will improve productivity in pharmaceutical plants, while many companies are also manufacturing more of their products overseas.

Strong demand is anticipated for professional occupations—especially for life and physical scientists engaged in R&D, the backbone of the pharmaceutical and medicine manufacturing industry. Much of the basic biological research done in recent years has resulted in new knowledge, including the successful identification of genes. Life and physical scientists will be needed to take this knowledge to the next stage, which is to understand how certain genes function so that gene therapies can be developed to treat diseases. Computer specialists such as systems analysts, biostatisticians, and computer support specialists also will be in demand as disciplines such as biology, chemistry, and electronics continue to converge and become more interdisciplinary, creating demand in rapidly emerging fields such as bioinformatics and nanotechnology.

Steady demand also is projected for production occupations. Employment of office and administrative support workers is expected to grow more slowly than the industry as a whole, as companies streamline operations and increasingly rely on computers.

Prospects should be favorable, particularly for life scientists with a doctoral degree. Unlike many other manufacturing industries, the pharmaceutical and medicine manufacturing industry is not highly sensitive to changes in economic conditions. Even during periods of high unemployment, work is likely to be relatively stable in this industry, because consumption of medicine does not vary greatly with economic conditions. Additional openings will arise from the need to replace workers who transfer to other industries, retire, or leave the workforce for other reasons.

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Note: Some resources in this section are provided by the US Department of Labor, Bureau of Labor Statistics.



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