Large Pharma vs. Small Biotech

One Hat Vs. Many Hats

The first and most frequently cited difference is the concept of specialization vs. generalization.

Large pharmaceutical companies tend to have bigger Medical Affairs organizations, allowing for functional specialization.

Conversely, smaller biotechs typically have fewer headcount, and some tasks require an all-hands-on-deck approach.

Put differently, as the visual implies, do you want to wear one hat or many?

Depending on your long-term goals, assuming you know them, one can be more advantageous than the other.

A tangible example might help solidify this concept. Suppose your company has recently announced the filing of an NDA with the FDA. Your Medical Affairs team is charged with developing a resource that will be used by the MSLs upon approval.

What happens from here might look very different depending on the size and, therefore, likely complexity of the company you’re at.

In a large company, a Scientific Communications team will likely work closely with an external vendor. The field team probably has a role (HQ-based) that specializes in content development and strategy. They’ll partner closely with the Medical Directors and other team members (Regulatory Affairs, etc.) to create the vision for a tool that’s useful to the field teams. Once the tool is approved, a separate role might be focused on training the MSLs. They jump into action to ready the field. The MSLs now take the approved tool and start engaging with customers.

At a smaller company, a single person might perform any number of the roles highlighted above (already a simplified list compared to most big pharma companies). It’s not unrealistic to have the field teams work with vendors to create their tools or have someone from the MSL team serve as the trainer. There are countless iterations of what this might look like.

So, which is better?

You guessed right, it depends. What are your professional development goals? That might lead you down one path over another, initially.

Suppose you’re unsure where you might want to specialize. A smaller company would allow you to perform multiple roles, at least providing some cursory exposure to many functions.

Conversely, suppose you know exactly what you want to do, and you prefer a fairly narrow scope of role so you can hone your craft. Sometimes, the team you want to join and the role you want to perform might only exist in large pharma. Thus, the decision is pretty straightforward.

It’s important to realize that experience in either setting is likely attractive to the other type of company. Small biotech companies are attracted to tenured Medical Affairs professionals as they typically bring structure and process along with their specific technical expertise.

On the other hand, a large pharma company might want to become more nimble and bring innovative perspectives into their bureaucratic organization. Someone who excelled in a smaller biotech company might help change the trajectory of the function and offer a fresh approach because they’ve seen different ways of working.

Onboarding, Training, and Support

In 2014 I started my journey in Medical Affairs. Immediately, I was blown away by the formality thoroughness of the onboarding and initial training plan.

Not only was it comprehensive, but it was also someone’s full-time job to ensure the successful onboarding of associates just like me.

Nearly a decade later, the support remains not just for new hires but for everyone. The investment and support for continuous training have been a constant in my various roles.

The experience at a smaller biotech company might be slightly different and for several reasons.

A smaller portfolio of products likely means less training and a shorter onboarding period.

While I’m confident there is plenty of structure and support, there may not be dedicated roles for training and onboarding. This is a positive for some people, especially if they might want to explore training as a development opportunity.

With few exceptions, I believe most people who transition into Medical Affairs for the first time will be surprised by the robustness of the training and support in either setting.

Professional Development

Another pleasant surprise in Medical Affairs has been the opportunities for professional development.

Intuitively, a larger company offers more development opportunities. To my earlier point, with size comes more roles and the potential to explore very specialized jobs.

In a large pharmaceutical company, you might be able to change therapeutic areas, change functions, explore global roles, etc.

Not that those aren’t possible with smaller companies, but to some degree, it’s a numbers game. That said, the numbers game might play in your favor. The small size of a biotech company might result in higher visibility assignments. And this can sometimes be parlayed into roles you might not otherwise be considered for. Perhaps you’re a pharmacist by training but are interested in becoming a Medical Director. In the absence of your interest, a role might be posted as requiring a Medical degree. However, your involvement in a few high-profile assignments might provide some flexibility on that criterion.

Again, most people transitioning into Medical Affairs will be thrilled with the potential development opportunities they’re afforded. Without a doubt, opportunities for development is one of biggest elements that attract talent to the industry.

I’ll discuss professional development at length in a future newsletter, but I want to mention one thing. While you’re likely to experience more support than other fields in terms of development, but it’s still something you must own. It’s not a passive activity.

Portfolio or Platform Risk

Theoretically, you have less risk as an associate in a larger company.

There’s an important upcoming data readout. It’s negative in a big way. Now what?

Well, that might depend on the size of the company, but many factors go into determining what’s next.

For some smaller companies, one negative study can be catastrophic. This is a risky business, and many things never pan out, unfortunately.

But that’s not to say that large pharmaceutical companies are immune to layoffs and restructurings.

As a result, I wouldn’t be overly reliant on resting easily when you’re at a large company. Typically, large companies have a lot of employees. Sometimes too many. And we all know what can happen following that realization.

This general topic is something that indirectly factored into my decision to start in a large pharmaceutical company. My personal risk tolerance (or at least what I knew at the time) combined with the fact I wanted the opportunity to launch multiple innovations, were central in my decision making process.

Compensation and Benefits

One of the more appealing aspects of a career in Medical Affairs is the benefits and potential compensation upside. Generally speaking, both small and large companies will offer solid compensation packages.

I will focus on some typical differences in compensation but won’t go into other aspects of benefits packages as there are too many things to address.

Most roles within Medical Affairs will feature a competitive base salary and an annual bonus. Where things tend to differ is around equity compensation or what is commonly referred to as long-term incentives. Beyond potential discrepencies in the relative amounts, there are key differences in how these incentives are leveraged.

While there are no absolutes, large companies tend to offer long-term incentives in the form of Restricted Stock Units. There is often a formula to decide the amount earned or awarded each year. From there, the total amount is divided by the share price of the company stock on the grant date to determine the number of shares granted. After a vesting period (often three years), those shares are available to trade. If your company’s stock price increases during the vesting period, you benefit from the upside. You do have risk to the downside, in that it wouldn’t be “worth” as much as originally planned. The gist here is that you’re, relatively speaking, guaranteed something.

Conversely, smaller companies usually offer stock options. They have a strike price and vesting period. From there, the value highly depends on the company’s share price relative to the strike price. While the upside is potentially huge, there’s theoretically more risk that the options might not have any value at the point of vesting. While it’s not at all fair to refer to these as a lottery ticket, I would suggest, even in the best-case scenarios, that you not create a lifestyle that is dependent on unrealized future income from stock options. To be fair, that’s prudent in either scenario discussed here.

It goes without saying this shouldn’t be construed as financial advice, and I’ve oversimplified some of the nuance here. I love personal finance and plan to cover some other elements in a future newsletter - let me know by replying to this email if that’s something you’d be interested in.

If you want a detailed primer on RSUs vs. Stock Options, I’d suggest looking at this from HBR.

Bureaucracy

Big companies, not just large pharmaceutical companies, create processes for almost everything. To some degree, it’s what enables their scale. On the other hand, sometimes processes can be counter to innovation.

Unnecessary bureaucracy is hard to avoid once a company gets to a certain size, especially in a heavily regulated industry.

In this case, bureaucracy and siloed working are more or less interchangeable concepts. They are different but have similar consequences - Slowing progress and preventing optimal ways of working.

While smaller companies aren’t immune to bureaucracy (I still can’t spell that word correctly, ha), it tends to be less prevalent due to necessity. That said, there might be ambiguity sometimes, and for some people, this is not ideal.