Pharmaceutical Sector Restructuring and its Implications for Sustainable Development Goals
Overview of Recent Corporate Actions
Several major pharmaceutical corporations have initiated significant cost-reduction programs, raising concerns about their alignment with the United Nations Sustainable Development Goals (SDGs). These measures, primarily involving workforce reductions and operational streamlining, reflect a broader industry trend toward reorganization.
- Merck & Co: The US-based company has launched a multiyear initiative aiming to reduce annual costs by $3 billion by the end of 2027. This plan is driven by impending biosimilar competition for its primary cancer drug, Keytruda, starting in 2028.
- Moderna: The mRNA vaccine manufacturer is implementing measures to save $1.5 billion in annual costs by 2027, citing the need to align its cost structure with its product pipeline.
- Industry Trend: These actions are part of a continuing cycle of cost-cutting across the global pharmaceutical sector, with companies such as Teva, Bayer, Novartis, and Bristol Myers Squibb also engaged in ongoing reorganization plans.
Analysis of Impacts on SDG 8: Decent Work and Economic Growth
The announced restructuring plans directly conflict with the objectives of SDG 8, which promotes sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.
- Merck & Co: The company’s strategy includes the elimination of approximately 6,000 positions, equivalent to about 8% of its global workforce. These cuts will affect administrative, sales, and Research & Development (R&D) departments.
- Moderna: The company is reducing its workforce by around 500 employees, representing 10% of its staff, despite prior efforts to cut costs through other means.
These substantial job losses represent a significant setback for decent work within a high-value economic sector, impacting livelihoods and contributing to economic instability for the affected employees and their communities.
Implications for SDG 3 (Good Health and Well-being) and SDG 9 (Industry, Innovation, and Infrastructure)
The cost-cutting measures, particularly those targeting R&D, have profound implications for long-term progress on health and innovation.
- Impact on Innovation (SDG 9): Reductions in R&D personnel and resources at both Merck and Moderna threaten to slow the pace of scientific discovery and the development of new medicines. This runs counter to SDG 9’s target to enhance scientific research and upgrade the technological capabilities of industrial sectors.
- Impact on Health Outcomes (SDG 3): A decline in pharmaceutical innovation could ultimately hinder progress toward SDG 3, which aims to ensure healthy lives and promote well-being for all at all ages. Reduced investment in R&D may delay or prevent the emergence of new treatments for diseases, affecting global access to essential medicines and the achievement of universal health coverage.
Broader Economic and Environmental Considerations
The corporate restructuring extends beyond employment and R&D, touching on other key sustainability areas.
- Sustainable Infrastructure (SDG 11): Merck’s stated goal to “reduce its global real estate footprint” aligns with principles of resource efficiency but may negatively impact local economies if it involves site closures, challenging the goal of SDG 11 to make communities inclusive, safe, resilient, and sustainable.
- Responsible Production (SDG 12): Moderna’s efforts to renegotiate supplier agreements and reduce manufacturing costs highlight a focus on operational efficiency. These actions must be scrutinized to ensure they promote sustainable and responsible production patterns throughout the supply chain, a core tenet of SDG 12, rather than simply shifting economic pressure onto suppliers.
Analysis of Sustainable Development Goals (SDGs) in the Article
1. Which SDGs are addressed or connected to the issues highlighted in the article?
SDG 8: Decent Work and Economic Growth
- The article’s central theme is the significant job cuts by major pharmaceutical companies like Merck & Co, Moderna, and Teva. This directly relates to the goal of promoting sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. The loss of thousands of jobs (6000 at Merck, 500 at Moderna, over 2000 at Teva) represents a setback for this goal within the pharmaceutical sector.
SDG 9: Industry, Innovation, and Infrastructure
- The article highlights restructuring within the pharmaceutical industry, a key sector for innovation. The job cuts specifically target “administrative, sales and R&D positions.” The reduction in R&D staff and Moderna’s admission that it has “scaled down R&D” directly impact the goal of building resilient infrastructure, promoting inclusive and sustainable industrialization, and fostering innovation.
SDG 3: Good Health and Well-being
- While the article focuses on the economic aspects, the companies involved are central to global health. Merck’s best-selling drug is a cancer antibody, and Moderna is an mRNA vaccine maker. Cuts to R&D positions and scaling down research activities could potentially impact the future development of new medicines and vaccines, which is relevant to ensuring healthy lives and promoting well-being for all at all ages.
2. What specific targets under those SDGs can be identified based on the article’s content?
SDG 8: Decent Work and Economic Growth
- Target 8.5: “By 2030, achieve full and productive employment and decent work for all women and men…” The article describes actions that are contrary to this target. The announcement of “around 6000 job cuts” by Merck, “around 500 jobs” by Moderna, and “over 2000 jobs” by Teva demonstrates a reduction in employment, moving away from the goal of full and productive employment in this sector.
SDG 9: Industry, Innovation, and Infrastructure
- Target 9.5: “Enhance scientific research, upgrade the technological capabilities of industrial sectors in all countries… encouraging innovation and substantially increasing the number of research and development workers…” The article directly contradicts this target. It states that job cuts at Merck will be across “R&D positions” and that Moderna has “scaled down R&D.” This signifies a decrease, not an increase, in R&D workers and investment in innovation.
SDG 3: Good Health and Well-being
- Target 3.b: “Support the research and development of vaccines and medicines…” The cost-cutting measures described in the article, particularly the scaling down of R&D at major pharmaceutical firms like Merck and Moderna, pose a direct challenge to this target. A reduction in R&D capacity can hinder the pipeline for new treatments and vaccines.
3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?
Indicators for SDG 8
- Implied Indicator (related to 8.5.2 Unemployment rate): The article provides specific numbers that measure a negative trend in employment. The data points “6000 job cuts (about 8% of its global staff)” at Merck and “cutting around 500 jobs (10% of its workforce)” at Moderna are direct measures of job loss, which would contribute to the unemployment rate within this industry and the overall economy.
Indicators for SDG 9
- Implied Indicator (related to 9.5.1 Research and development expenditure): The article mentions large-scale cost-cutting plans, such as Merck’s effort to “reduce annual costs by $3 billion” and Moderna’s commitment to “save $1.5 billion in annual costs.” A part of these savings comes from scaling down R&D, implying a reduction in R&D expenditure.
- Implied Indicator (related to 9.5.2 Researchers per million inhabitants): The article explicitly states that job losses will come from “R&D positions” at Merck and that Moderna has “scaled down R&D.” This directly implies a reduction in the number of researchers, which is the core of this indicator.
Indicators for SDG 3
- Implied Indicator (related to 3.b.2 Total net official development assistance to medical research and basic health sectors): While the article discusses private-sector spending, not official development assistance, it provides a clear indicator of the level of investment in medical research. The statement that Moderna “has scaled down R&D” and Merck is cutting R&D positions serves as a direct measure of reduced financial and human resource allocation to medical R&D from key private sector players.
4. Table of SDGs, Targets, and Indicators
| SDGs | Targets | Indicators Identified in the Article |
|---|---|---|
| SDG 8: Decent Work and Economic Growth | Target 8.5: Achieve full and productive employment and decent work for all. | The number and percentage of job cuts are specified (Merck: 6000 jobs, 8% of staff; Moderna: 500 jobs, 10% of workforce), which are direct inputs for measuring changes in employment/unemployment rates (related to Indicator 8.5.2). |
| SDG 9: Industry, Innovation, and Infrastructure | Target 9.5: Enhance scientific research and increase the number of R&D workers. | The article explicitly mentions cuts to “R&D positions” and that Moderna has “scaled down R&D,” indicating a reduction in the number of researchers (related to Indicator 9.5.2) and R&D expenditure (related to Indicator 9.5.1). |
| SDG 3: Good Health and Well-being | Target 3.b: Support the research and development of vaccines and medicines. | The scaling down of R&D by major pharmaceutical companies (Merck, Moderna) serves as a measure of reduced private sector investment in medical research (related to the principle of Indicator 3.b.2). |
Source: chemistryworld.com
