The Washington Post has the story, but buries the lede.

The pharmaceutical industry once was a haven for biologists and chemists who did not go into academia. Well-paying, stable research jobs were plentiful in the Northeast, the San Francisco Bay area and other hubs. But a decade of slash-and-burn mergers; stagnating profit; exporting of jobs to India, China and Europe; and declining investment in research and development have dramatically shrunk the U.S. drug industry, with research positions taking heavy hits.

So the real story here is that Big Pharma ain’t what it used to be. I wonder why. Let’s round up the usual suspects.

1. Aggregate demand. Slow nominal GDP growth.

2. Reversal of unsustainably past prior growth. A PSST story.

3. The Great Stagnation! Medical progress is not what folks had hoped for.

4. Unequal distribution of income, not enough money being spent on education and training, etc.

5. Regime uncertainty.

For most of the economy in this recession, I have championed (2) and been willing to concede that (1) is what most economists would believe is the main factor. I have dismissed (4) and given little or no weight to (3) or (5).

In the case of pharmaceuticals, however, my guess is that one can summon up a decent argument that (5) is the culprit. If pharma executives have become pessimistic about the regulatory outlook in their industry, can you blame them?