Biopharmaceutical Industry Contributions to State and U.S ... · The South Atlantic States are capturing an increasing proportion of the nation’s biopharmaceutical jobs. Overall,

Biopharmaceutical IndustryContributions to

State and U.S. Economics

October 2004

This work was made possible, in part, by a grant from the Pharmaceutical Research and Manufacturers of America (PhRMA). The views expressed in this report are solely those of the Milken Institute and are not intended to represent the views of PhRMA or its members.

The Milken Institute is an independent economic think tank whose mission is to improve the lives and economic conditions of diverse populations in the U.S. and around the world by helping business and public policy leaders identify and implement innovative ideas for creating broad-based prosperity. We put research to work with the goal of revitalizing regions and finding new ways to generate capital for people with original ideas.

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© 2004 Milken Institute

I. Executive Summary .......................................................................................... 1

II. Introduction .................................................................................................... 13

III. Industry Geographic Location and Performance ......................................... 17

IV. Multiplier and Tax Impacts Analysis ............................................................. 43

V. Biopharmaceutical Innovation Pipeline ..................................................... 107

VI. 10-year Industry Projection ........................................................................ 157

VII. A Brief History of the Biopharmaceutical Industry

and Its Leading Companies .......................................................................... 183

About the Authors ................................................................................................ 211

Table of Contents

1

Executive Summary

The pharmaceutical industry is one of the most enduring, largest and most critical knowledge-intensive sectors in the U.S. economy. For about one century following its emergence as a sizable economic force in the mid-19th century, pharmaceutical manufacturers in America essentially operated as a subsector of the chemicals industry. Along with chemical development and manufacturing, the pharmaceutical industry was distinctly shaped by advances in chemical engineering and basic chemistry and their innovative application.

In the 1970s, developments under way since World War II ushered in the biotechnology revolution. Biotechnology is an outgrowth of interdisciplinary research in molecular biology, immunology and biochemistry, aided by new techniques such as X-ray structural analysis and computer-assisted drug synthesis.

Partly due to the promise of therapeutic breakthroughs, many traditional pharmaceutical firms in the 1990s looking to augment their product pipelines matched up with biotech companies seeking external resources, additional expertise and the ability to quickly scale-up production and global marketing capabilities. Other pharmaceutical firms increased biotechnology research in their own laboratories. A pattern of increasing interdependence evolved.

Key Findings · Biopharmaceuticals is one of the most research-intensive sectors in the U.S. · The U.S. biopharmaceutical sector has captured a larger share of global R&D

in recent years. · Biopharmaceuticals employed 406,700 people in 2003, and when the full multiplicative

impact is captured, is responsible for 2,724,800 jobs and 2.1 percent of total employment in the nation. Each job in the industry creates another 5.7 jobs elsewhere in the economy, substantially above the average for all industries.

· The biopharmaceutical industry paid an average annual wage of $72,600 in 2003 and is among the most productive sectors in the U.S. economy with real output per worker of $157,300.

· Biopharmaceuticals was directly responsible for $63.9 billion in real output (based on inflation-adjusted 1996 dollars) in 2003 and a total of $172.7 billion when the economic ripple effects across other sectors are incorporated.

· Many state economies, and the District of Columbia, are highly dependent on the biopharmaceutical industry, including New Jersey, Massachusetts, Indiana, North Carolina, Connecticut, Pennsylvania, California, Utah, Maryland, New York, Rhode Island, Illinois and Washington.

· Given the proper innovation environment, states such as Nevada, Vermont, Alabama, New Hampshire, Florida and West Virginia could see biopharmaceuticals account for a growing share of their economies.

Executive SummaryI.

2

The biopharmaceutical sector that has since emerged is one with extraordinary research demands and, at the same time, phenomenal research promise. Diseases and debilitating conditions that defied effective remedies for centuries are now increasingly treated with satisfying results. Overall, biopharmaceutical firms invest between 10 to 20 percent of sales in research and development (R&D), a high proportion compared to other industries. Biopharmaceuticals accounted for 8.2 percent of all industrial R&D in the United States in 2002, despite representing only 0.3 percent of total non-farm employment.

Industry Geographic Location and PerformanceThe U.S. biopharmaceutical industry employed 406,700 people in 2003, contributing $63.9 billion in total real output (based on inflation-adjusted 1996 dollars). The industry has nearly doubled in size over the past 20 years. In terms of productivity, each worker produced an average of $157,300 of real output in 2003 and average annual wages in the industry reached $72,600. Most occupations in the biopharmaceutical industry require a knowledge-based skill set involving the most sophisticated forms of research and biopharmaceutical production. These high-end jobs call for highly trained individuals. Other less-research-intensive occupations are also heavily employed in the industry, such as team assemblers and packaging and filling machine operators and tenders.

Biopharmaceutical research and manufacturing is currently geographically concentrated in a few areas of the U.S. The traditional American pharmaceutical industry has a strong presence in the New Jersey-New York-Pennsylvania and Midwest regions. Because firms in the industry tend to locate in close proximity to one another, forming clusters, much of this traditional industry remains along the New York-New Jersey-Philadelphia corridor. Biotech start-up firms largely clustered around leading research universities in the San Francisco Bay area, San Diego, New York, Boston, Raleigh-Durham-Chapel Hill and Seattle. However, a number of regions are actively seeking to grow their biopharmaceutical industries.

Within the New England Census Region, Massachusetts has the highest concentration of biopharmaceutical employment relative to the size of its overall economy compared to the industry’s importance to the U.S. economy as measured by a Location Quotient (LQ). The Location Quotient equals the percent of biopharmaceutical employment in the state divided by its percent of employment in the U.S. In the case of Massachusetts, its employment LQ of 2.15 means that biopharmaceuticals is more than twice as concentrated as the nation.

In 2003, the biopharmaceutical industry in Massachusetts employed more than 21,400 people while producing a real output of $2.4 billion. Real industry output in Massachusetts increased 180 percent between 1983 and 2003. In late 2002, Switzerland-based Novartis, the world’s sixth-largest pharmaceutical company, decided to relocate its biomedical headquarters to Cambridge because of the vast number of resources the region has to offer. Cambridge is home to Biogen IDEC, Millennium and Genzyme as well.

Connecticut had the second-highest biopharmaceutical concentration in New England – about 92 percent above the national average. And biopharmaceuticals is more important in Rhode Island than the nation overall. New England’s biopharmaceutical employment grew substantially faster than the nation’s over the last decade.

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The biopharmaceutical industry employed 117,300 workers in the Middle Atlantic States, or 29 percent of the nation’s total. The region also accounted for 34 percent of national real output. New Jersey boasts an LQ of 3.72 with respect to employment, the highest in the nation. New Jersey employed more than 46,000 workers in the industry, and produced a real output of $10.2 billion (the highest among all states) in 2003. New Jersey is home to several well-known pharmaceutical companies, namely Merck, Aventis Pharmaceuticals, Novartis Pharmaceuticals and Wyeth. It is also home to several other pharmaceutical companies that are either headquartered or serve as major branch locations in the state.

New York employed more than 36,000 people in the industry in 2003, third highest in number behind California and New Jersey. Biopharmaceutical employment concentration in the state is 38 percent higher than that of the nation. New York serves as the headquarters for Pfizer, Novartis and Bristol- Myers Squibb. Pennsylvania employed 34,600 in the biopharmaceutical industry, slightly less than its New York counterpart. In contrast, Pennsylvania’s industry contribution to real output is higher, registering at $7.3 billion versus $4.5 billion for New York. Some of these companies, including Merck, GlaxoSmithKline, Wyeth and Berwind Pharmaceutical Services, have major research and manufacturing facilities in the state. Biopharmaceutical employment in Pennsylvania is twice as important to the state as for the nation.

Among the East North Central States, Illinois and Indiana are the major players in the biopharmaceutical industry. Together, they employ more than 10 percent of the nation’s biopharmaceutical workforce. In Illinois, the industry is comprised of nearly 22,000 workers and has an employment concentration that is 20 percent higher than the national average. Much of the state’s success is owed to the fact that Illinois serves as headquarters for two global pharmaceutical companies – Abbott Laboratories and Baxter International. Indiana employs 19,500 people in the industry and boasts an employment concentration more than twice the national average. The state is home to operations of large biopharmaceutical companies such as Eli Lilly and Johnson Mead & Company. Michigan employed 12,200 workers in its biopharmaceutical workforce and generated $1.9 billion worth of real output in 2003.

Among the West North Central States, Missouri has the largest biopharmaceutical workforce. In 2003, this industry employed 6,100 people. Minnesota has 2,600 employees in its biopharmaceutical workforce. The industry in Iowa has very similar characteristics in terms of size. Iowa’s industry concentration, while below the U.S. average, is slightly greater than Minnesota’s.

The South Atlantic States are capturing an increasing proportion of the nation’s biopharmaceutical jobs. Overall, the region employs 59,800 biopharmaceutical workers. Among the South Atlantic states, North Carolina is home to a powerful and growing biopharmaceutical industry. This industry group has emerged as a major driver of North Carolina’s economy and is a provider of highly compensated employment. More than 25,000 employees with skill sets ranging from bioprocess technicians to Ph.D.s are employed in this industry group with a LQ of 2.14. North Carolina is home to many of the world’s largest biotech and pharmaceutical facilities.

Maryland has emerged as the location of a dynamic biopharmaceutical cluster in the United States with more than 10,000 employees in 2003 and a 10-year employment growth rate of 46 percent. Its 1.38 employment LQ indicates that the state’s employment concentration in this industry cluster exceeds the nation’s. The state’s reputation as a business location for the biopharmaceutical industry rests on its

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universities and the presence of leading academic research institutes in science and technology. The District of Columbia’s economy added more than 1,400 biopharmaceutical-related jobs between 1983 and 2003, representing an increase of 110.4 percent. More than 6,400 Florida workers were involved in the biopharmaceutical industry in 2003. The industry added more than 2,000 new jobs between 1993 and 2003, representing a 56.4 percent increase.

Biopharmaceutical industry employment and productivity in the East South Central States, and their ability to attract pharmaceutical companies and R&D investment, have not been uniform. Overall, biopharmaceutical employment is more than 60 percent less important to the region than to the nation. In 2003, Tennessee’s biopharmaceutical industry employed more than 3,800 people. Kentucky has witnessed rapid growth over the past decade with an employment gain of 220 percent. Alabama experienced employment growth in excess of the nation over the past decade as well.

The West South Central States had more than 13,800 employees making their living in the biopharmaceutical industry in 2003, with more than 12,000 in Texas alone. The 1983-1993 period witnessed strong regional employment growth at 104 percent. Texas has done notably well attracting pharmaceutical, biotech and related companies. Companies that contribute to the performance of Texas’ biopharmaceutical industry include DFB Pharmaceuticals, Inc., CytoGenix, Inc., Falcon Pharmaceuticals, Ltd., Tanox Biosystems, Mission Pharmacal Company and Galderma Laboratories, L.P.

The Mountain States recorded the highest biopharmaceutical employment growth rate (90 percent) in the country over the past decade. Colorado’s real output grew at a 10-year rate of almost 76 percent (1993-2003) and the state employed more than 5,000 highly skilled workers in 2003. In the past 10 years alone, Colorado has added more than 2,000 jobs. Colorado is home to a large number of dedicated pharmaceutical and biotech companies, including Array BioPharma and Roche Colorado Corporation.

In 2003 more than 5,200 people, including physicians and scientists, held Utah’s biopharmaceutical-based jobs, up more than 3,000 from 1993. It is important to note that biopharmaceutical employment in Utah grew at a significantly faster rate, 194 percent, between 1993 and 2003 than for the nation (28.1 percent). A large number of research centers and world-class educational institutions, such as the University of Utah Research Park and the affiliated University of Utah Medical Center, as well as the Huntsman Cancer Institute, support the state’s growing critical mass of biopharmaceutical companies.

Among the Pacific States, California’s biopharmaceutical industry is a significant force in the state’s economy. An examination shows that biopharmaceutical-based employment in 2003 reached almost 70,000. In 2003, the biopharmaceutical industry generated more than $9.6 billion in real output. The industry’s real output in California grew 328 percent from 1983 to 2003, compared to the real output growth of 230 percent in the nation. California’s biopharmaceutical industry is deeply rooted in its academic life sciences institutions and clinical research facilities. Washington’s biopharmaceutical employment amounted to more than 8,700 employees in 2003. Overall employment in the industry rose by 380 percent between 1983 and 2003. Washington’s concentration

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of biopharmaceutical employment is slightly greater than the nation as a whole. Washington is home to a flourishing biopharmaceutical community that includes premier research institutions.

Multiplier ImpactsThe importance of the biopharmaceutical industry in the U.S must be analyzed by its impact on the overall economy. Multiplicative values known as “multipliers” allow us to do this by quantifying how employment, wages and output in the biopharmaceutical industry ripple through other regional economic sectors. In addition to providing numerical data on an industry’s national and regional impact, economic multipliers also bring to light region-wide interdependencies and interindustry relationships.

Within the concept of multiplier impacts, three key forces are at play. In addition to the direct impact of industry employment, wages and output, the biopharmaceutical industry impacts many supplier industries such as legal, financial and advertising services, as well as sophisticated manufacturing machinery. The indirect impact represents the number of jobs, wages or amount of output generated from all supplier industries necessary to support employment and output in biopharmaceuticals. The higher employment and wages in these supplier industries ripple throughout a state’s economy leading to more purchases of goods and services, which, in turn, generate higher income available to be spent in the local economy, known as the induced impact.

With these multipliers factored in, the biopharmaceutical industry in the United States was responsible for 2,724,800 jobs, or 2.1 percent of all non-farm employment in the nation in 2003. Of those, 406,700 are accounted for directly, while 1,351,800 and 966,300 are generated through the indirect and induced effects, respectively. Given its high-paying jobs and close supplier relationships, for every job within biopharmaceuticals, an additional 5.7 jobs are created in all other sectors (see Multiplier Impacts table). The additional jobs created by industries on average in the U.S. through their multiplier impacts are much lower. For example, an additional 0.9 and 2.9 jobs are generated by each job in retail and textile and textile product mills, respectively, in other sectors.

Similarly, the biopharmaceutical industry in the United States helps generate $115.1 billion of total earnings. Of that, $29.5 billion is registered directly, while $54.3 billion and $31.3 billion are generated through the indirect and induced impacts, respectively. For each dollar of labor earnings produced in the biopharmaceutical sector in the United States, an additional $2.90 of earnings is generated outside it.

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State

Direct-EffectEmployment

Multiplier

Direct Impact

(Thous.)

Total Impact

(Thous.) State


Multiplier

Direct Impact

(Thous.)

Total Impact

(Thous.)Alabama 2.6 1.392 3.683 Montana 2.0 0.563 1.099Alaska 1.7 0.085 0.140 Nebraska 3.9 1.811 7.039Arizona 2.8 1.183 3.295 Nevada 2.9 0.425 1.232Arkansas 2.0 0.366 0.724 New Hampshire 3.1 1.135 3.466California 4.5 69.986 317.198 New Jersey 5.7 46.356 264.637Colorado 3.8 5.174 19.730 New Mexico 2.7 0.914 2.455Connecticut 5.1 9.909 50.797 New York 2.8 36.313 101.154Dist. of Columbia 1.5 2.817 4.327 North Carolina 5.0 25.482 127.692Delaware 4.3 0.880 3.782 North Dakota 1.8 0.018 0.032Florida 3.4 6.493 21.791 Ohio 4.0 4.642 18.622Georgia 4.4 3.964 17.382 Oklahoma 5.3 0.541 2.867Hawaii 2.2 0.317 0.699 Oregon 2.7 1.453 3.888Idaho 2.4 0.019 0.047 Pennsylvania 5.9 34.673 205.756Illinois 5.8 21.914 127.510 Rhode Island 3.1 1.837 5.619Indiana 6.0 19.497 116.547 South Carolina 3.2 2.242 7.148Iowa 3.2 2.519 8.097 South Dakota 2.7 0.078 0.211Kansas 3.1 1.481 4.535 Tennessee 3.6 3.833 13.684Kentucky 3.3 2.161 7.090 Texas 3.8 12.311 46.266Louisiana 2.4 0.674 1.626 Utah 4.2 5.287 22.200Maine 2.8 1.404 3.978 Vermont 2.5 0.122 0.308Maryland 3.3 10.715 35.098 Virginia 3.7 5.314 19.710Massachusetts 3.6 21.419 77.279 Washington 3.3 8.714 28.923Michigan 4.8 12.207 58.407 West Virginia 3.1 1.879 5.833Minnesota 3.4 2.648 9.030 Wisconsin 3.0 4.144 12.625Mississippi 2.5 1.185 2.985 Wyoming 2.1 0.061 0.126Missouri 5.5 6.132 33.786

United States* 6.7 406.689 2,724.815*U.S. direct impact is the sum of the direct impact of all states, including D.C.Multiplier includes out-of-own state economic contributionsSource: Milken Institute, Economy.com, BLS, BEA.

Multiplier ImpactsBiopharmaceutical Employment, 2003

Additionally, the biopharmaceutical industry in the United States is responsible for $172.7 billion of total real output (based upon inflation-adjusted 1996 dollars) – $63.9 billion is registered directly, while $67.8 billion and $40.9 billion are generated through the indirect and induced impacts, respectively. For each dollar of output produced in the biopharmaceutical sector in the United States, an additional $1.70 of output is generated beyond it.

Personal income taxes of $24.5 billion at the federal, state and local levels are attributable to the biopharmaceutical industry, while the nation’s total sales tax revenue generated from the sales of biopharmaceutical products and related consumer purchases amount to $985.6 million. The contributions of the nation’s biopharmaceutical companies in terms of corporate income taxes total $6.4 billion.

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In general, those states with well-established manufacturing operations typically have the highest multipliers on their economies. States with tightly interwoven biopharmaceutical clusters are more likely to capture the maximum economic benefit from the industry’s activity as more of the stimulus will remain in the local economy and less leaks outside. The states of Connecticut, Illinois, Indiana, New Jersey and Pennsylvania all have employment multipliers above 5.0. California has the biggest employment base attributable to the direct and ripple effects of the biopharmaceutical industry. The employment multiplier with respect to the biopharmaceutical industry in California is 4.5. Therefore, each job created within the industry generates an additional 3.5 jobs in other sectors of the state’s economy. The biopharmaceutical industry employs 70,000 workers (direct impact), and an additional 247,200 are produced as a result of the indirect and induced impacts, producing a total impact of 317,200. With the highest concentration of biopharmaceutical employment in the nation and an employment multiplier of 5.7, New Jersey’s biopharmaceutical industry is responsible for 264,600 jobs in the state.

Pennsylvania had 34,700 jobs directly attributable to the industry in the state in 2003, with an additional 171,100 jobs created outside the industry for a total of 205,800 jobs. Next, with respect to total employment attributable to the biopharmaceutical industry, is North Carolina with 127,700 jobs.

Illinois has the third-largest employment multiplier in the country with respect to the biopharmaceutical industry. Almost 128,000 jobs were generated by the industry in Illinois in 2003. Indiana’s biopharmaceutical industry is accountable for a total of 116,500 jobs in the state. Of these, 19,500 are employed directly by the industry, while 97,000 are generated throughout the rest of the state’s economy.

New York’s biopharmaceutical industry accounts for 101,200 workers in the state in 2003. Of these, 36,300 are employed directly in the industry and an additional 64,800 are employed throughout the state by the indirect and induced impacts. In Massachusetts, the biopharmaceutical industry is responsible for a total of 77,300 jobs.

The biopharmaceutical industry directly employed more than 12,200 workers in Michigan in 2003. Almost four times as many jobs were created throughout the state via the indirect and induced impacts for a total of 58,400 employees. Connecticut’s biopharmaceutical industry directly employed 9,900 workers. When the multiplicative impact is incorporated, the industry is responsible for a total of 50,800 jobs in the state. Texas’ biopharmaceutical industry generated a total of 46,300 jobs in the state in 2003.

Maryland’s biopharmaceutical industry is responsible for 35,100 jobs in the state. Of these, almost 70 percent are employed by indirect and induced impacts (24,400 workers). A total of 33,800 people were employed in Missouri directly and through the ripple effects of its biopharmaceutical industry. Washington’s biopharmaceutical industry was accountable for 29,000 jobs in the state in 2003. In total, the biopharmaceutical industry was responsible for 22,200 jobs in Utah. In 2003, the biopharmaceutical industry in Florida employed 6,500 workers. When the full extent of multiplicative impacts is included, the biopharmaceutical industry is responsible for a total of 21,800 jobs in Florida.

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Biopharmaceutical Innovation Pipeline IndexInnovation occupies an exceptionally important role in the development and manufacturing of biopharmaceuticals. The biopharmaceutical innovation pipeline index illuminates important facets of the sector’s innovation inputs and outputs throughout the United States. Overall, the index and its component measures serve as report cards on how states fare in the high value and highly competitive, knowledge- and capital-intensive field of biopharmaceutical research and innovation.

The term “biopharmaceutical innovation pipeline” refers to the output measures of a region’s research, financial and human capital infrastructure that reflect its ability to capitalize on its strengths in biopharmaceutical knowledge and creativity. A well-built biopharmaceutical innovation pipeline is essential for a state to have a competitive advantage and sustain long-term growth in the biopharmaceutical industry.

State Rank Score State Rank Score Massachusetts MA 1 85.83 New Hampshire NH 26 53.46Maryland MD 2 82.29 Maine ME 27 52.74Connecticut CT 3 81.15 Iowa IA 28 52.10New Jersey NJ 4 79.78 Nebraska NE 29 51.22Pennsylvania PA 5 75.44 New Mexico NM 30 51.17California CA 6 75.32 Vermont VT 31 50.95North Carolina NC 7 74.95 Kansas KS 32 50.05Washington WA 8 70.90 Tennessee TN 33 48.92Colorado CO 9 70.48 Oregon OR 34 47.49New York NY 10 66.48 Florida FL 35 46.76Utah UT 11 65.93 Montana MT 36 46.46Illinois IL 12 65.00 Hawaii HI 37 43.54Delaware DE 13 64.95 Kentucky KY 38 42.35Minnesota MN 14 63.71 South Carolina SC 39 39.75Missouri MO 15 62.05 Louisiana LA 40 39.60Rhode Island RI 16 60.88 West Virginia WV 41 38.93Wisconsin WI 17 60.80 Arkansas AR 42 38.21Michigan MI 18 60.71 Oklahoma OK 43 37.64Ohio OH 19 59.88 Mississippi MS 44 37.48Texas TX 20 59.54 Idaho ID 45 37.10Indiana IN 21 58.19 North Dakota ND 46 32.26Georgia GA 22 56.41 Nevada NV 47 31.96Alabama AL 23 55.90 Wyoming WY 48 28.69Virginia VA 24 53.97 South Dakota SD 49 26.84Arizona AZ 25 53.61 Alaska AK 50 25.37

State Average 54.30

State Biopharmaceutical Innovation Pipeline IndexOverall Index, 2004

The biopharmaceutical innovation pipeline index covers four areas: biopharmaceutical research funding, biopharmaceutical risk capital funding, biopharmaceutical human capital and workforce, and biopharmaceutical innovation output. To compare the relative strength of each state’s biopharmaceutical research funding, we scaled out each component by population, employment or real output, such as,

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New Jersey’s industry R&D dollars to biopharmaceutical research per capita, and indexed it to the top-scoring state, which received a score of 100. After such adjustments, we compared the relative scores of the 50 states and ranked them.

The Institute’s biopharmaceutical innovation pipeline index indicates that at the highest end of the spectrum, Eastern states dominate. Out of the top 10 states in the index, seven are from this region (and among these, six are either in or bordering the highly clustered New England and Mid-Atlantic Regions). Three Western states also come within the top 10 – two from the Pacific and one from the Mountain.

The New England States of Massachusetts and Connecticut (with index scores of 85.8 and 81.2), along with the South Atlantic State of Maryland (with an index score of 82.3), stand out for being the only states to score above 80 in our overall index. Almost all the remaining Eastern States in the top 10 score above 70: New Jersey (at 79.8), Pennsylvania (75.4) and North Carolina (75.0). Tenth-ranked New York scores 66.5 index points. The smaller grouping of Western States is lead by sixth-ranked California (75.3), followed by its fellow Pacific State of Washington (70.9), and the Mountain State of Colorado (70.5).

The 61-80 index score range is led by New Jersey at (79.8 index points, placing it nearly in the “above 80” grouping of states). There are a total of 15 states in this category: New Jersey, Pennsylvania, California, North Carolina, Washington, Colorado, New York, Utah, Illinois, Delaware, Minnesota, Missouri, Rhode Island, Wisconsin and Michigan. Apart from New Jersey, states with world-beating biopharmaceutical innovation capabilities include other Northeastern States such as Pennsylvania and New York, the South Atlantic State of North Carolina, Midwestern States such as Illinois and Minnesota, and Western States such as California and Utah. Interpreted in the context of ongoing university and private-sector research initiatives, these states by-and-large can be seen to have relatively good prospects for continued high-level performance in biopharmaceutical innovation.

Biopharmaceutical Industry 10-Year ProjectionThis section provides a 10-year projection of the biopharmaceutical industry. It portrays the anticipated relative importance of the industry with respect to the total non-farm sector in the U.S. and in each state. The projections consist of biopharmaceutical employment, earnings and real output for all states (including D.C.) from 2004 to 2014. The 10-year projection is based on a Milken Institute proprietary econometric model that incorporates historical relationships between determinants (such as those in our innovation pipeline index) of state performance relative to the nation for the biopharmaceutical industry.

In the United States, employment within the biopharmaceutical industry is projected to grow from 413,800 in 2004 to 536,300 over the next decade. As a result, the industry’s share of total non-farm employment is expected to increase from 0.32 to 0.35 percent, an increase of 11.4 percent. When the full extent of the multiplier dynamics is accounted for, the biopharmaceutical industry will be responsible for 3,616,580 jobs (total impact) by 2014 in the United States.

Even more promising are the output projections with respect to biopharmaceuticals. Real industry output is expected to increase from $69.2 billion in 2004 to $128.3 billion in 2014. More significantly,

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this represents a growing share of biopharmaceutical output relative to overall real output. Biopharmaceutical’s share of total real industry output is expected to increase from 0.68 to 0.90 percent, an increase of 32.3 percent. When applying the output multiplier, the industry would produce an additional $221.8 billion in real output among other sectors, making it accountable for $350.1 billion worth of real output overall by 2014.

Finally, total labor earnings generated by the biopharmaceutical industry are anticipated to increase from $31.4 billion to $56.6 billion between 2004 and 2014. Industry share of earnings relative to total non-farm earnings would also increase from 0.60 to 0.68 percent, a growth rate of 13.4 percent. The earnings multiplier suggests that the industry would be responsible for $218.0 billion worth of earnings in all industries in 2014.

Among states with existing clusters of biopharmaceutical activity, Massachusetts and Maryland stand out as the projected top growth performers over the next decade. The 2004-2014 projections indicate that employment in Massachusetts’ biopharmaceutical industry is expected to grow by 64.3 percent, representing a faster growth rate than the nation (29.6 percent) in this sector. Biopharmaceutical employment in Massachusetts is projected to increase 14,500 by 2014. Maryland’s biopharmaceutical workforce is expected to expand by 62.4 percent, from 11,100 employees in 2004 to 18,000 employees in 2014.

Other states with a high concentration of biopharmaceutical employment that are expected to grow faster than the national average over the next decade include Utah (50.5 percent), Connecticut (45.4 percent), California (39.8 percent), Washington (36.3 percent) and Pennsylvania (34.4 percent). North Carolina is projected to match national growth and create 7,200 new jobs by 2014. New Jersey, New York, Indiana and Illinois, although not projected to match national growth patterns, will collectively create 18,300 new jobs by 2014.

Several states without large biopharmaceutical activity are expected to record high growth rates over the next decade. Nevada’s projected employment growth rate of 239.7 percent is the highest in the nation. Vermont is close behind with a job growth rate projection of 223.9 percent. Rhode Island is forecast to add 4,500 jobs by 2014, a growth rate of 208.7 percent. Alabama’s 144.1 percent expected growth rate over the next decade will result in 2,100 new biopharmaceutical jobs. New Hampshire will witness an employment gain of 101.2 percent by 2014. Florida is projected to add 4,500 jobs over the next decade, a growth rate of 66.2 percent. West Virginia is projected to have job growth above the national average as well.

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Conclusion There is a good reason why governments across the country and around the world are fighting hard for biopharmaceutical dollars: these companies have the potential to add thousands of jobs and millions of dollars to their economies.

This study shows the strong economic impact that the biopharmaceutical industry has on state and U.S. economies – more than 2.7 million jobs and $172 billion in real output last year when one includes the full impact on all sectors. More important, our 10-year projections show that this impact will grow stronger in the next decade. By 2014, the total employment impact will increase to over 3.6 million and the real output figure will reach $350.1 billion. These projections are based upon the assumption that government policies continue to encourage basic and applied research and development in the biopharmaceutical field.

Thanks to its highly paid workforce, its large financial commitment to research and development, and its ability to generate many jobs in other sectors, this industry will become an important source of economic growth in the regions that are successful in growing and nurturing it. Given the many elements that must be present in a location for biopharmaceutical clusters to grow – long-term capital, first-rate research facilities, biopharmaceutical firms, highly skilled workers and catalyst organizations – not every region will be able to take advantage of the industry’s growth. But those that are successful should reap substantial economic benefits. Further study into strengthening the competitiveness of the biopharmaceutical industry in the U.S. and a process of monitoring the attractiveness of America as a location for this industry could be a vital part of a longer-term strategy to promote and support the industry’s sustainability and growth in this country.

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13

Introduction

The pharmaceutical industry is one of the most enduring, largest and critical knowledge-intensive sectors in the U.S. economy. The beginnings of the U.S. pharmaceutical sector and its approach to innovation were heavily influenced by two major factors: industrial and geographic. For about one century following its emergence as a sizable economic force in the mid-19th century, pharmaceutical manufacturers in America essentially operated as a subsector of the chemicals industry. Along with chemical development and manufacturing, the pharmaceutical industry was distinctly shaped by advances in chemical engineering and basic chemistry emanating from Europe, especially Germany. Some of America’s most commercially successful pharmaceutical firms, with Pfizer and Merck among the clearest examples, hail from this period and were initially German in origin.

The U.S. chemical industry, although technologically not as sophisticated as their European counterparts, grew by intensively exploiting its natural resource endowments. Continued growth in the industry led to expansion abroad. On June 22, 1942, Pfizer went public. At the end of World War II, American chemical producers were in a powerful position.

In the 1970s, developments underway since World War II ushered in the biotechnology revolution. Biotechnology is an outgrowth of interdisciplinary research in molecular biology, immunology and biochemistry, aided by new techniques such as X-ray structural analysis and computer-assisted drug synthesis. Just as our understanding of chemistry in the 20th century revolutionized products and production processes in the dye industry, pharmaceuticals, agriculture and fuel, biotechnology redirects the focus from chemistry to molecular biology in applications across a variety of industries. Biotechnology has changed the face of pharmaceutical chemistry.

Biotech emerged in the West from a technological breakthrough that challenged the older pharmaceutical industry, long established in the more mature regions of the Northeast and Midwest. Genentech, established by geneticist Herb Boyer and venture capitalist Bob Swanson in the San Francisco Bay Area in 1976, is considered the corporate founder of the biotechnology industry. Amgen began operations in 1980 in Thousand Oaks, Calif. It introduced two of the first biologically derived human therapeutics.

The emergence of biotechnology posed a challenge to the core technology base of the traditional pharmaceutical industry in organic chemistry. The typical approach to drug discovery and development was effectively superseded by biotech’s genetically engineered, targeted approach. Many pharmaceutical companies quickly adapted to those technological breakthroughs. For example, pharmaceutical firm Lilly brought to market the first human healthcare product created using recombinant DNA technology. Start-up firms entered the field on the basis of a combination of new technology found outside the pharmaceutical industry and new sources of risk capital funding from venture capital markets.

Partly due to the promise of therapeutic breakthroughs, traditional pharmaceutical firms in the 1990s looking to enhance and expand their product pipelines matched up with biotech companies seeking external resources, additional expertise and the ability to quickly scale-up production and global marketing capabilities. A pattern of increasing interdependence emerged. Consolidation enabled firms to manage inter-brand competition effectively. Increases in the enormous R&D costs and time frames along with the fixed costs associated with larger production scales, further fueled the consolidation

IntroductionII.

14

process. Both the biotech and the pharmaceutical sectors sought shared risk and lower costs for research. The dependence on retained earnings for further investment has intensified these tendencies.

Today, although the growing interdependence between the biotech and pharmaceutical sectors does not diminish the intense rivalry and competition among the firms or romanticize the relationships between the sectors, the industry can be better characterized as biopharmaceuticals. The therapeutic products that are created can be chemically or biologically derived. The restructuring of the industry and the massive realignment of the sectors also changed the geography of the industry.

The biopharmaceutical sector that has since emerged is one with extraordinary research demands and, at the same time, phenomenal research promise. Diseases and debilitating conditions that defied effective remedies for centuries are now increasingly treated with satisfying results. Powerful therapeutics for such ancient threats to human health as cancer, and newer ones such as AIDS, are the net result of today’s biopharmaceutical innovation pipeline. This innovation pipeline is on the road to developing cures for these and other serious diseases.

Research is the primary focus of most biopharmaceutical companies. High R&D investments made by biopharmaceutical firms display that they are taking substantial risks. Investment by the biopharmaceutical industry is from 15 to 20 percent of sales. Overall, biopharmaceuticals is one of the most research-intensive sectors in the U.S. economy.

The industry’s statistics are mainly captured in the North American Industry Classification System (NAICS) code 3254, which covers pharmaceutical and medicine manufacturing. Since the discoveries of DNA and monoclonal antibodies in the mid- and later half of the 20th century, pharmaceutical development has become increasingly research-driven both within its sector and without, having especially close ties to research and development services in life sciences (NAICS 5417102) that encompasses much of the burgeoning biotechnology sector and some early-stage pharmaceutical-compounds research and development. (See, “methodology and data estimation techniques” in the Industry Geographic Location and Performance section.)

In this study we document many of the economic contributions of the biopharmaceutical industry to states and the nation overall. The Industry Geographic Location and Performance section displays the importance of the biopharmaceutical industry to state economies. We include concentration ratios for output and employment, such as location quotients, in order to identify and measure the industry’s relative contribution to states. Location quotients measure the percentage that an industry contributes to a regional economy relative to that industry’s contribution for the U.S. as a whole. Additionally, a comparison of the output, employment and productivity growth performance of biopharmaceuticals is included. This analysis shows the extent to which the biopharmaceuticals industry has become more important to various state economies over the last two decades.

The Multiplier and Tax Impacts Analysis section provides an assessment of the ripple effects of the biopharmaceuticals industry on state and the national economies. In addition to the direct impact of industry employment, wages and output, the industry affects many suppliers. The resulting higher employment and wages in these supplier industries ripples throughout the local economy, leading to higher purchases of goods and services, which, in turn, cause higher income available to be spent in

Introduction

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the local economy. A multiplier, as the name implies, is a measure of the multiple effects produced by a given economic activity. In addition to employment, wages and output, we include the associated state and local and federal personal income, corporate and sales tax receipts.

The Biopharmaceutical Innovation Pipeline section contains measures of how a state fares in the highly competitive, knowledge-intensive field of research and development. An “innovation pipeline” refers to the support infrastructure and outcome measures that reflect the ability of a state or region to capitalize on its strengths in knowledge and inventiveness. We analyze the innovation pipelines of states with a view toward determining their capacities to generate and commercialize biopharmaceutical innovations and impact future economic activity. Included are such measures as patterns in public and private funding, patents and citations, concentrations of bioscience specialists and rates of drug discovery commercialization.

The 10-year Industry Projection portrays the likely growth path of the biopharmaceutical industry. The economic consequences of where biopharmaceutical clusters expand and form will likely be substantial. The pool of high-paying knowledge workers that the industry will attract, and the supplier infrastructure that develops around them, promise significant wealth and job creation for the winning states. This 10-year projection shows that the economic contributions of the industry to many states will grow.

The final section, A Brief History of the Biopharmaceutical Industry and Its Leading Companies, describes the evolution of pharmaceutical and biotechnology industries and their emergence as one interdependent sector. We provide case studies on key firms, including their historical evolution and roles in state economies.

Introduction

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Industry Geographic Location and Performance

The U.S. biopharmaceutical industry employed 406,700 people in 2003, contributing $63.9 billion in total real output (based upon inflation-adjusted 1996 dollars). The conversion of real dollars allows comparing to a common frame of reference (i.e. national income accounts). Industry employment and output nearly doubled in size over the past 20 years, posting growth rates of 76 percent and 78 percent, respectively during that period. Growth in the biopharmaceutical industry workforce and total U.S. employment growth can be viewed together on the line graph below. In the early 1990s, biopharmaceutical employment grew at about the same rate as total employment in the country. After 1993, the industry’s employment and growth slowed somewhat. Biopharmaceutical industry employment has grown rapidly since 1997, outpacing total employment growth in the nation.

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Sources: Economy.com, BLS, Milken Institute.

U.S. Employment GrowthBio-Pharmaceutical vs. Total

Bio-Pharmaceutical EmploymentTotal Employment

In terms of productivity, each worker produced an average of $157,300 of real output in 2003; additionally average annual wages in the industry reached $72,600 that same year. Most occupations in the biopharmaceutical industry require a knowledge-based skill set involving the most sophisticated forms of research and biopharmaceutical production. These high-value jobs call for intelligent minds from reputable institutions.

Methodology and Data Estimation Techniques

The Bureau of Labor Statistics (BLS) is designated as the federal government’s official agency responsible for labor market information including labor force size, employment totals by industry, and a wide range of other statistics. The agency is funded by the federal government to update its employment estimating methodology and statistical procedures on a timely basis. The BLS strives to accurately reflect employee counts by geographic area: nation, state, metropolitan area and county. One of the principle advantages of BLS data is that it is collected on a consistent basis across geographic areas.

Several different BLS surveys provide estimates of industry employment by geographic area in the United States. One of the most broadly used employment estimates is the Covered Employment and Wages, or ES202 data. This data is derived from the quarterly tax reports submitted to state Employment

Industry Geographic Location and PerformanceIII.

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Development Departments (EDD) that are subject to unemployment insurance (UI) laws. Each quarter, state EDD agencies edit and process the data and send it to the BLS for further refinement.

The ES202 Covered Employment and Wages is the most complete universe of monthly employment and quarterly wage information by detailed industry. The survey has broad economic significance in evaluating labor market trends and major industry developments. The ES202 data is used by businesses, academic and private research organizations for detailed sources of employment and wage statistics for economic forecasting, and industry and regional analysis, in addition to many other uses.

The ES202 monthly employment data represents the number of covered workers who worked, and received pay for, the pay period that included the 12th day of the month. Covered private industry includes most corporate officials, executives, supervisory personnel, professionals, clerical workers and part-time workers recorded on a full-time equivalent basis. It excludes proprietors, the self-employed, unpaid family members and certain farm and domestic workers. This data is collected by establishment, i.e., an economic unit such as a factory or research laboratory that produces goods or services. An establishment is typically engaged in one, or predominantly one type of activity for which a single industrial classification may be applied.

The BLS has developed a highly sophisticated statistical technique of adjusting for possible under-reporting of employment counts where newly-formed establishments are not captured in the initial ES202 survey. Each year the BLS performs a benchmark revision to their initial surveys using more complete IRS records, state tax information and unemployment insurance records that become available. The original monthly release of ES202 data includes an estimate of unreported employment counts at new firms. This statistical undercount adjustment is based upon historical comparison of the initial survey with the annual benchmark revision. These “residual” undercounts are analyzed over time and econometric estimation procedures are employed to adjust for under-reporting.

The ES202 employment data was converted to the North American Industry Classification System (NAICS) in 2003 from the Standard Industrial Classification system (SIC) utilized since 1938. NAICS is the product of the cooperative effort on the part of the statistical agencies of the United States, Canada and Mexico. NAICS uses a production-oriented approach to categorize economic units. Units with similar procedures and processes are classified in the same industry. NAICS focuses on how products and services are produced as opposed to the SIC focus on what was produced. A new grouping that affects the biopharmaceutical industry is the Professional, Scientific and Technical services category in which life sciences research and laboratory analysis is reported.

The annual (4-digit NAICS) employment and wages data, while originally collected and processed by the BLS, is also available through Economy.com. Ecomomy.com may further refine the data where appropriate, while converting it into an annual format. An important diagnostic check on the BLS ES202 dataset comes from the Current Employment Statistics (CES). Because the ES202 withholds some detailed industry data due to disclosure concerns of company information, Economy.com runs comparisons to the Current Employment Statistics that report all company information but at a more aggregate level than the ES202. This allows the missing cells in the ES202 industry/state matrix to be filled utilizing an algorithm that calculates residual estimates by comparing the detailed sector sums to the broader industry aggregates from the Current Employment Statistics. Another discrepancy that


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this procedure captures is for employment; the CES makes an effort to estimate all employment, not just that covered by unemployment insurance programs in the ES202 data. In addition to the CES survey, Economy.com also utilizes data from the County Business Patterns (available from the U.S. Census) and the Bureau of Economic Analysis (BEA) as part of their diagnostic check.

Furthermore, Economy.com provides Real Output or Gross State Product estimates at the 4-digit NAICS level, while taking into consideration more aggregate levels of industry output from the BEA. BEA applies national chain-weighted deflators for the purpose of adjusting to constant dollars indexed to 1996. In other words, the real concept accounts for inflation over time.

The biopharmaceutical industry statistics are mainly captured in NAICS code 3254, which covers pharmaceutical and medicine manufacturing. Since the discoveries of DNA and monoclonal antibodies in the mid- and latter half of the 20th century, pharmaceutical development has become increasingly research driven both within its sector and without, having especially close ties to scientific research and development services (NAICS 5417102) that encompass much of the burgeoning biotechnology sector and some early-stage pharmaceutical compounds research and development (see table below).

Industry BreakdownNAICS 3254 Pharmaceutical and Medicine Manufacturing 325411 Medicinal and Botanical Manufacturing 325412 Pharmaceutical Preparation Manufacturing 325413 In-Vitro Diagnostic Substance Manufacturing 325414 Other Biological Product ManufacturingNAICS 5417102 R&D in the Life Sciences

Defining the Biopharmaceutical Industry

Important Note: 5417102 only records R&D employment activities when the location is a stand-alone facility (there isn’t a manufacturing facility co-located). NAICS 3254 states that it is manufacturing (production), but if a research facility is located at a manufacturing site, the R&D employment is recorded in 3254. The point is that you can’t view the 3254 and 5417102 distinction as truly separating R&D and manufacturing.

Since the mid-1990s, another industry development has caused a shift in which industry statistics are recorded. Breakthroughs in combinatorial chemistry—utilizing sophisticated machines to create thousands of compounds simultaneously then tested by robotics—are altering the nature of the industry. In many cases, the industry is relying more on specialized laboratories to perform early-stage research; large pharmaceutical firms have spent million of dollars to arrange deals with small firms. This places more industry research activities in NAICS code 5417102 (R&D in Life Sciences).

With respect to the R&D in the life sciences industry, represented by the 7-digit NAICS code, state-level data is publicly available from the 1997 Economic Census (the most current available at that level of detail). While the BLS contains historical and more current figures, it does not provide data at the 7-digit detail level. It does provide, however, historical data of its directly related aggregate sector, namely Scientific Research and Development Services (NAICS 5417). Hence, utilizing the 1997 Economic Census-based figure as a benchmark, the Milken Institute has estimated a complete time series (from 1983-2003) at the detailed level, by incorporating recent employment growth trends at the more aggregate level.


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In short, the biopharmaceutical industry is defined by codes 3254 and 5417102 under the NAICS. Employment, wages and real output data are provided by Economy.com, which in turn, collects its data from various government sources (i.e. BLS, BEA, U.S. Census). Finally, the Milken Institute provides unique data, derived through the 1997 Economic Census, with respect to the R&D in the life science category.

The following highlights discuss some of the nation’s areas with the strongest biopharmaceutical economic activity between 1983 and 2003. While some states benefit much more than others from the industry’s contribution, other states are laying the groundwork for establishing biotech related research parks. In some cases, the presence of a single pharmaceutical-based establishment is enough to spark measurable growth in a region, and may even act as a catalyst for promoting future growth.

Below is a regional profile of the biopharmaceutical industry.

New England HighlightsIn 2003, the biopharmaceutical industry in Massachusetts directly employed over 21,400 people while producing a real output of $2.4 billion. Real industry GSP rose by 180 percent and employment grew 97 percent between 1993 and 2003. Massachusetts is home to an agglomeration of interrelated industries that contribute to overall wealth creation in the region. Its 2.15 Location Quotient1 (LQ) evidences that the state is successfully exporting its goods and services beyond its borders. The pharmaceutical manufacturing sector alone employed more than 8,500 people, while those establishments engaged primarily in research and development in the life sciences added another 12,900 jobs.

In an earlier study conducted by the Milken Institute, Boston ranked first on the Health Pole Index used to depict the local concentration of health care and the metro area’s importance in that industry in the context of the nation as a whole.2 While this current study focuses primarily on the pharmaceutical/biotech sector, it is important to note the extensive contribution of hospitals and their affiliated institutions to the state of Massachusetts. Much of the region’s success in the life sciences is driven by the presence of well-known institutions like Harvard, Boston University, Tufts, Northeastern, the Massachusetts Institute of Technology and the University of Massachusetts. Medical schools and teaching hospitals such as these attract the best minds from around the world and create an overwhelming pool of human capital. World-renowned research centers such as the Whitehead Institute, Whitehead Center for Genomic Research, Forsyth Institute, Roland Institute and MIT, are the state’s top producers of pharmaceutical and life science Ph.D.s. Massachusetts is renowned for its bioscience research parks, among them the University Research Park and the Boston Research Center in the Longwood Medical and Academic Area. Recognized for its regional inputs, the state acts as a magnet for companies looking to locate where they think their business will prosper.

In late 2002, Switzerland-based Novartis, one of the world’s six largest pharmaceutical companies, decided to relocate its biomedical headquarters to Cambridge for the vast number of resources the region has to offer.

In Connecticut, the biopharmaceutical industry employed 9,900 people and produced a real output of $1.8 billion in 2003. Between 1993 and 2002, biopharmaceutical employment grew by 43.6 percent. The industry’s real output grew three times faster than employment from 1993 to 2003, signifying a


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high rate of productivity growth among workers. The average annual wage per employee in the state registered at $120,100, the highest in the United States. The state’s concentration of biopharmaceutical employment is nearly twice the national average, as represented by its LQ of 1.93.

Top pharmaceutical companies like Pfizer Inc., Bayer Corp., Bristol-Myers Squibb and Boehringer Ingelheim Pharmaceuticals, all have major R&D operations in Connecticut. In addition to key academic and research facilities including Yale, University of Connecticut Medical Center at Farmington, Connecticut College and the University of Connecticut, the Institutes for Pharmaceutical Discovery, LLC (IPD) work to establish research institutes to enhance world health. IPD works in collaboration with pharmaceutical organizations to develop new drug products. According to an annual economic report produced by Connecticut United for Research Excellence (CURE), pharmaceutical companies in the state represent 10 percent of all R&D dollars spent by the nations’ pharmaceutical companies.3

CURE promotes a business and regulatory environment that supports Connecticut’s emerging biopharmaceutical industry. Furthermore, CURE and the Connecticut Technology Council (CTC) have partnered to establish Connecticut’s biopharmaceutical industry as an internationally recognized leader. Connecticut’s Office of BioScience housed at the Department of Economic and Community Development (DECD) promotes the image of the state’s biopharmaceutical industry as an economic engine. James F. Abromaitis, Commissioner of the Department of Economic and Community Development said, “The creation of the Office of BioScience is yet another indication that the state is taking the necessary strategic steps to ensure that Connecticut becomes a world-renown location for biotechnology companies and related industries.”4

In Rhode Island, the industry directly accounted for 1,800 jobs and approximately $148.3 million worth of real output in 2003. In the decade 1993-2003, real output and employment grew by 233 percent and 147 percent, respectively. Relatively speaking, Rhode Island has a high concentration of employment among companies primarily engaged in services that cater to R&D in the life sciences. Employment concentration in the state’s pharmaceutical and life science R&D industry is one and a half times greater than in the nation as a whole. In 2002, Amgen, a global leader in the biotech arena, acquired from Immunex what is now one of the most advanced cell manufacturing centers in the world.5 Although Amgen is based in Thousand Oaks, CA, it chose Greenwich, RI in which to operate its largest manufacturing operation. The company’s success is expected to boost employment, both direct and indirect, providing a significant contribution to the state’s overall economy.

Among the Rhode Island’s higher education institutions and research facilities are the biotech research facility at the University of Rhode Island and Brown University.

Maine’s biopharmaceutical-based research workforce consisted of about 1,400 workers, or roughly 75 percent of the employment concentration of the U.S. average in 2003. While the state was able to outgrow the nation in terms of employment growth in the 1980s, its growth tapered off in the following decade, just barely matching that of the national average. Biodesign International, a biopharmaceutical based company, runs its manufacturing and research operations in Saco, ME. Biodesign is an industry leader in the supply of monoclonal and polyclonal antibodies, purified antigens, assay development reagents and custom antibody services to pharmaceutical, biotechnology and diagnostic companies, and life science researchers.6


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The Maine Technology Institute and the University of Southern Maine support the state’s biopharmaceutical infrastructure.

New Hampshire’s emergence in the biopharmaceutical industry primarily took place in the last decade. In 1993, the industry consisted of 280 employees in the state. By 2003, that number had risen to 1,135. While the state’s biopharmaceutical industry has a smaller relative employment concentration, it has the potential to benefit from its neighboring New England states, given their geographic proximity. Among states that employ at least 500 workers in the industry, New Hampshire has exhibited the strongest growth in terms of employment and real output since 1983, growing by 958 percent and 1991 percent, respectively.

The industry in the state benefits from respected research and academic institutions such as the University of New Hampshire, Dartmouth College and the New Hampshire Biotechnology Council.

As portrayed in the graph below, New England’s employment in the biopharmaceutical industry nearly tripled since 1983, outperforming growth in the nation (growing 1.75 times or 75 percent since 1983).

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Biopharmaceutical Employment GrowthNew England vs. United States, 1983-2003

New EnglandUnited States

The table below summarizes New England States’ employment and real output measures with respect to the biopharmaceutical industry.

Size Growth LQ

(US=1)Size

(US$ 96, Mil.) GrowthLQ

(US=1)2003 '93-'03 2003 2003 '93-'03 2003 2003 2003

Connecticut 9,909 43.6% 1.92 1820.5 134.9% 1.73 183.7 120.1Maine 1,404 36.2% 0.74 112.0 59.6% 0.48 79.8 47.4Massachusetts 21,419 96.7% 2.15 2351.6 180.1% 1.32 109.8 72.0New Hampshire 1,135 301.6% 0.59 85.3 376.8% 0.27 75.2 50.1Rhode Island 1,837 146.6% 1.21 148.3 232.5% 0.63 80.7 53.0Vermont 122 166.8% 0.13 6.7 181.2% 0.06 54.7 31.9Total 35,825 80.1% 1.67 4524.4 158.6% 1.22 126.3 82.5Sources: Economy.com, BLS, Milken Institute.

New England States

New England Biopharmaceutical and Life Science OverviewPharmaceutical & Medicine Manufacturing, and Biological R&D

Employment Real Output Real Output PerEmployee

(US$ 96, Ths.)

Wage PerEmployee (US$ Ths.)


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Middle Atlantic HighlightsThe bio-pharmaceutical industry employed 117,300 workers in the Middle Atlantic States as a region, or 29 percent of the nation’s total. That region also accounted for 34 percent of the national GSP.

New Jersey boasts an LQ of 3.72 (nearly four times higher than the national average) with respect to employment, the highest in any state. Its LQ of 4.39 for output is the second highest in the nation suggesting that New Jersey’s real biopharmaceutical output captures a significant share of the state’s total real GSP. The state employed more than 46,000 workers in the industry, and produced a real output of $10.2 billion (the highest among all states) in 2003. Between 1993 and 2003, the state actually decreased its biopharmaceutical workforce by 5.4 percent, primarily due to consolidations within the industry. However, remarkably, the industry’s real GSP increased by 67 percent during that same period. This inverse relationship between employment and output actually signifies the high levels of productivity generated among each worker employed within the pharmaceutical industry. Real output per employee in the state is also among the highest in the nation at $219,500 on average.

New Jersey is home to several well known pharmaceutical giants, namely, Merck, Aventis Pharmaceuticals, Novartis Pharmaceuticals and Wyeth.7 It is also home to several other pharmaceutical companies that are either headquartered or serve as major branch locations in the state. These companies continue to achieve breakthroughs in medicine, while providing drugs to those suffering with certain diseases and ailments. In addition to having the highest employment concentration, the state produces the second highest wages on a per employee basis. On average, each worker employed in the industry earned $115,500 in 2003.

Among New Jersey’s leading research and academic institutions are its public research universities—the University of Medicine and Dentistry of New Jersey, Rutgers, the State University of New Jersey, the New Jersey Institute of Technology, and its state colleges and universities, such as Kean University.

In addition, the Health Care Institute of New Jersey, acting as a unified voice for the state’s biopharmaceutical industry, plays a central role in sustaining its industry competitiveness. The New Jersey Economic Development Authority (NJEDA) supports the state’s biotech companies with financial programs.

New York employed more than 36,000 people in the industry, third highest in number behind California and New Jersey, in 2003. Employment grew by 32.5 percent between 1983 and 1993, followed by another 24 percent between 1993 and 2003. Its employment growth trend performed similarly to that of the U.S. average. This is likely due, in part, to the fact that the state is home to the corporate headquarters of large pharmaceutical firms, creating a much more diverse biopharmaceutical industry. In terms of real output, however, the state has been underperforming relative to the nation. Biopharmaceutical employment concentration in the state is 38 percent higher than that of the nation, while its concentration of real output is slightly less than the national average, registering an LQ of 0.86.

New York serves as the headquarters location for Pfizer, Novartis, and Bristol-Myers Squibb, among others. It is also home to several research institutes and independent testing laboratories that are associated within the life sciences.


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New York’s biopharmaceuticals cluster is primarily the result of its substantial research infrastructure. The Center for Biotechnology noted that, “The state ranks second in biological research and development expenditures at universities ($1.2 billion in 1997), with three institutions in the top 20 and 11 in the top 100.”8 New York City’s Rockefeller University, New York City’s Columbia University, SUNY at Stony Brook, Columbia University, Cornell University with its diverse medical and biological research programs, and the State University of New York all contribute to the state’s vital biopharmaceutical industry sector. New York’s Albany Molecular Research, Inc., a chemistry-based drug discovery and development company that centers on applications for new small molecule prescription drugs, boosts research, technology transfer and innovation. Barr Laboratories, also headquartered in New York, focuses on the development, manufacturing and marketing of generic and proprietary pharmaceuticals.

The other state with a large biopharmaceutical industry in the Mid-Atlantic Region, Pennsylvania, employed 34,600 in the biopharmaceutical industry, slightly less than its New York counterpart. In contrast, its industry contribution to real output is slightly higher, registering at $7.3 billion. Bio-pharmaceutical real output per employee in the state was $212,000 in 2003 compared to $157,000 for the national average. The state’s industry has nearly twice the employment concentration, while its real output LQ is almost three times higher than the national average.

Over the past few years, the state has attracted a host of companies as employment growth rose an average of 32 percent in each of the last two decades. A number of these companies, although not headquartered in the state, conduct their primary U.S. operations in Pennsylvania. Some of these companies including Merck, GlaxoSmithKline, Wyeth, and Berwind Pharmaceutical Services, have major research and manufacturing facilities in the state. Philadelphia’s proximity to major pharmaceutical companies, whether corporate, manufacturing or research related, not only comprises a source for job growth in the region, but also tends to attract other mid-sized pharmaceutical companies due to its strategic position.9

Pennsylvania reaps a substantial economic benefit from the presence of reputable academic and research institutes that conduct groundbreaking, innovative research, including the Pennsylvania State University System, University of Pittsburgh, University of the Sciences in Philadelphia and the Pennsylvania Society for Biomedical Research (PSBR).

Pennsylvania Bio is dedicated to serving as an educational resource, and promoting growth and community support for biotechnology. Pennsylvania Bio acts as a catalyst to ensure the state’s leading position in biopharmaceuticals by developing a cohesive community that unites the region’s biotechnology, pharmaceutical, research and financial strengths.

Relative employment growth trends in the Middle Atlantic and United States are demonstrated in the following graph.


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Biopharmaceutical Employment GrowthMiddle Atlantic vs. United States, 1983-2003

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The summary table for Middle Atlantic States’ biopharmaceutical employment and real output measures is provided below.

Size Growth LQ

(US=1)Size


(US=1)2003 '93-'03 2003 2003 '93-'03 2003 2003 2003

New Jersey 46,356 -5.4% 3.72 10173.3 66.9% 4.38 219.5 115.5New York 36,313 23.9% 1.38 4501.8 46.0% 0.86 124.0 55.5Pennsylvania 34,673 33.7% 1.97 7341.7 71.7% 2.85 211.7 87.9Total 117,342 12.5% 2.08 22016.7 63.6% 2.17 187.6 88.8Sources: Economy.com, BLS, Milken Institute.

Middle Atlantic Biopharmaceutical and Life Science OverviewPharmaceutical & Medicine Manufacturing, and Biological R&D

Middle Atlantic States


(US$ 96, Ths.)


East North Central HighlightsAmong the East North Central States, Illinois and Indiana are the major players in the biopharmaceutical industry. Together, they employ more than 10 percent of the nation’s workforce in this industry.

In Illinois, the industry is comprised of nearly 22,000 workers and has an employment concentration that is 20 percent higher than the national average. The state has experienced moderate employment growth over the course of the last two decades. In terms of its contribution to real output, the biopharmaceutical industry generated $3.4 billion. Despite having grown 47 percent in the last 10 years, the state’s industry has been underperforming relative to the U.S. Evidence suggests that its biopharmaceutical production activity is in jeopardy of slipping relative to other states. Much of the state’s success is owed to the fact that Illinois serves as headquarters for two global pharmaceutical companies, Abbott Laboratories and Baxter International. These companies conduct innovative world-class basic research, encourage technology transfer activities in the biopharmaceutical industry and provide a highly skilled workforce. The industry relies on universities and research institutions such as Northwestern University Center for Biotechnology, Advanced Clinical Services,


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Search Masters International and MediChem Life Sciences (acquired by DeCode Genetics, Inc.).

Indiana employs 19,500 people in the industry and boasts an employment LQ of 2.15, twice the employment concentration of the U.S. While growth in employment has risen by 10 percent over the last 20 years, real output growth has been tremendous, increasing 243 percent during that same time frame. The industry’s LQ for real output is 4.66, the highest in the nation. Real output per employee registered at $293,000, also ranking highest among all states.

The state is home to operations of large biopharmaceutical companies such as Eli Lilly, and Johnson Mead & Company. Bristol-Myers Squibb Company and Pfizer Inc. have a significant presence in Indiana. A large number of these companies have collaborated with the state’s research institutions in establishing the MedAmerica Research Corridor.

Indiana is home to world-class academic and research institutions that provide access to an exceptional workforce and support the state’s biopharmaceutical based companies. Indiana University and Purdue University are among the state’s top universities and research facilities.

Michigan employed 12,200 workers in its biopharmaceutical workforce and generated $1.9 billion worth of real output in 2003. While employment and real output grew steadily between 1983 and 1993, that growth was not as significant in the following decade. The employment and real output LQ is slightly less than the U.S. average. However, the state benefits locally from its real biopharmaceutical output. Real output per employee within the industry average amounted to $158,000, slightly above the national average.

Michigan is home to two of Pfizer’s major biotech establishments in Kalamazoo (formerly the site of pharmaceutical operations for Pharmacia, recently acquired by Pfizer) and Ann Arbor.

Ohio and Wisconsin, the two remaining states in the East North Central Region, employed 4,600, and 4,100 people in the biopharmaceutical industry, respectively, in 2003. In relative terms, however, the industry contributes a minor share towards the overall industry base of these states. This is apparent from the low employment and real output concentrations. While employment growth in Ohio has been stagnant over the last 20 years, Wisconsin’s performance has been more promising, having increased its biopharmaceutical employment base by nearly 2,700 workers.

According to the chart below, since 1983, East North Central Region’s biopharmaceutical employment grew by 39 percent, slightly underperforming the national trend.


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Biopharmaceutical Employment GrowthEast North Central vs. United States, 1983-2003

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The following table includes employment and real output measures for the biopharmaceutical industry in the East North Central States.

Size Growth LQ

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Indiana 19,497 8.6% 2.15 5711.4 127.0% 4.65 292.9 84.7Illinois 21,914 24.9% 1.20 3381.2 47.0% 1.12 154.3 77.4Michigan 12,207 19.7% 0.88 1926.8 48.3% 0.97 157.8 66.9Ohio 4,642 21.3% 0.27 402.5 18.0% 0.17 86.7 52.2Wisconsin 4,144 44.5% 0.48 445.4 91.2% 0.39 107.5 43.1Total 62,404 19.1% 0.93 11867.3 77.4% 1.22 190.2 73.5Sources: Economy.com, BLS, Milken Institute.

East North Central Biopharmaceutical and Life Science OverviewPharmaceutical & Medicine Manufacturing, and Biological R&D

East North Central States


(US$ 96, Ths.)


West North Central Highlights Among the West North Central States, Missouri has the largest biopharmaceutical workforce. In 2003, this industry employed 6,100 people. The state’s industry produced a real output of $1.1 billion, generating a relatively high real output per employee of $177,000. Surprisingly, Missouri’s biopharmaceutical employment level has not changed since 1983, and has actually decreased over the last decade. Real industry output in the state has risen since by incremental amounts.

Minnesota added another 2,600 employees to its biopharmaceutical workforce and generated $280 million in real output in 2003. The industry in Iowa has very similar characteristics in terms of size to Minnesota’s. Iowa’s industry concentration, while far below the U.S. average, is slightly greater than Minnesota’s. On the other hand, Minnesota’s industry mix is more diverse and offers a much higher overall employment base, with 1.2 million more jobs.

West North Central’s biopharmaceutical employment growth pattern is depicted in the graph below. Since 1983, the industry grew relatively slower than in the nation as whole.


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Biopharmaceutical Employment GrowthWest North Central vs. United States, 1983-2003

West North CentralUnited States

The following table includes employment and real output measures for the biopharmaceutical industry in the West North Central States.

Size Growth LQ

(US=1)Size


(US=1)2003 '93-'03 2003 2003 '93-'03 2003 2003 2003

Iowa 2,519 31.1% 0.56 332.6 9.7% 0.56 132.1 34.7Kansas 1,481 -20.6% 0.36 187.4 41.8% 0.34 126.5 45.8Minnesota 2,648 8.4% 0.32 279.5 79.9% 0.23 105.5 62.7Missouri 6,132 -15.3% 0.73 1085.3 21.4% 0.94 177.0 68.1Nebraska 1,811 23.5% 0.64 316.6 111.6% 0.88 174.8 44.0North Dakota 18 100.7% 0.02 0.5 26.9% 0.00 28.1 19.4South Dakota 78 33.2% 0.07 2.2 -14.3% 0.01 27.7 14.2Total 14,687 -2.1% 0.48 2204.1 34.6% 0.53 150.1 55.8Sources: Economy.com, BLS, Milken Institute.

West North Central Biopharmaceutical and Life Science OverviewPharmaceutical & Medicine Manufacturing, and Biological R&D

West North Central States


(US$ 96, Ths.)


South Atlantic HighlightsAmong the South Atlantic States, North Carolina is home to a powerful and growing biopharmaceutical industry. This industry group emerged as a major driver of North Carolina’s economy and is a provider of highly productive employment. The state’s biopharmaceutical industry generated more than $4.5 billion in real output in 2003. The most apparent indication of the fact that the biopharmaceutical industry is a driving force of North Carolina’s economic base is the state’s employment concentration. More than 25,000 employees with skill sets ranging from bioprocess technicians to Ph.D.s are employed in this industry group, having produced a 10-year growth rate (1993-2003) of 28.2 percent. The state’s competitive advantage has led to an above-average concentration in both employment and real output. Its employment LQ of 2.14 and an output LQ of 2.70 indicate that the biopharmaceutical industry in North Carolina has moved ahead of the rest of the South Atlantic States. These factors strongly indicate that the biopharmaceutical industry not only meets the local demand, but also produces enough to be characterized as an exporting industry in North Carolina. While the productivity of this industry


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group has grown rapidly since 1983 (564 percent) and remained high, growth rates slowed somewhat in the past 10 years (67.2 percent).

Home to many of the world’s largest biotech and pharmaceutical facilities, such as Bayer Healthcare Biological Products, a division of Bayer HealthCare with its headquarters located in the Research Triangle Park in North Carolina, DSM Pharmaceuticals Inc., Voyager Pharmaceutical Corporation and the Novo Nordisk Pharmaceutical Industries, Inc., and co-headquarters for GlaxoSmithKline, one of the nation’s leading research-based pharmaceutical companies, North Carolina has seen its real output in the biopharmaceutical industry grow 67.2 percent between 1993 and 2003. In addition, Biogen IDEC, Inc. and Abbott Laboratories have a significant presence in North Carolina. According to a previous survey conducted by the U.S. Department of Commerce Technology Administration, “North Carolina was the front-runner in adding new biotech companies during the most recent period. The state increased its total number of firms by 52.5 percent during 1997-2001, up from 23.7 percent during the previous period.”10

North Carolina’s prominence as a business location, and a hub for life sciences research and development also rests on world-class educational institutions, including major universities, such as Duke University, East Carolina University, North Carolina State University, the University of North Carolina at Chapel Hill and Wake Forest University. They are key R&D resources to support future growth for pharmaceutical and biotechnology companies in the state.

Maryland emerged as the location of a dynamic biotechnology and pharmaceutical cluster in the United States with more than 10,000 employees in 2003 and a 10-year employment growth rate of 46 percent. Its 1.38 employment LQ indicates that the state’s employment concentration in this industry cluster exceeds the national average. This particular sector helped drive the state’s total productivity growth by making a direct contribution of more than $1.4 billion to its real output in 2003. In addition, Maryland’s growth in real output between 1993 and 2003 has been considerably higher than the level posted by the nation. The United States grew by 77.3 percent during this time period, while Maryland’s real GSP grew by 123.4 percent. By comparison, the state’s output LQ was 16 percent above the national average in 2003. From an economic development perspective, Maryland’s biopharmaceutical industry sector is a sector to focus on and nurture for continued growth.

Maryland’s wage patterns in the biopharmaceutical industry, $62,600, largely mirror the average annual wage per employee within the United States of $72,600.

The state’s research and development efforts in the biopharmaceutical industry can be linked to companies such as Alpharma USPD Inc., BioReliance Corporation, Advancis Pharmaceutical Corporation, Guilford Pharmaceuticals Inc., and Human Genome Sciences (HGS), Inc. These companies have also fostered the growth of the local pharmaceutical and biotech sector. Advancis Pharmaceutical Corporation, Avalon Pharmaceuticals, Inc. and Baxter Healthcare Corporation—the principal U.S. subsidiary of Baxter International, Inc.—are big component’s of Maryland’s success in the biopharmaceutical industry. A number of Maryland’s pharmaceutical and biotech companies, such as Rexahn, a privately held biopharmaceutical startup, are clustered at the Maryland Technology Development Center (MTDC) or in the heart of the Shady Grove Life Sciences Center, a biotechnology research park in Rockville. Biotechnology incubators active in Maryland’s biotech and pharmaceutical


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industry scene who are dedicated to nurturing start-up firms include Bard Laboratories and John Hopkins Bayview Alpha Center.

The state’s reputation as a business location for the biopharmaceutical industry also rests on its well-regarded universities and the presence of leading academic research institutes in science and technology, including the John Hopkins University, the constituent universities of the University System of Maryland and the National Institutes of Health (NIH) in Bethesda, Maryland in addition to other major federal research facilities. An important aspect of these government departments and laboratories is that they produce cutting edge research in health and therapeutic related areas and serve as a source of entrepreneurs and business start-ups in Maryland’s biopharmaceutical industry. Moreover, there are numerous biotechnology-related educational programs at colleges and universities. Feldman and Francis document the innovative milieu of Maryland: “In addition to the two large research universities, Johns Hopkins and the University of Maryland, there are currently 26 educational institutions offering at least a certificate in bioscience relevant fields.”11

The state’s research and development efforts in the biopharmaceutical industry can also be linked to companies such as Alpharma USPD Inc., BioReliance Corporation, Advancis Pharmaceutical Corporation, Guilford Pharmaceuticals Inc., and Human Genome Sciences (HGS), Inc. These companies have also fostered the growth of the local pharmaceutical and biotech sector. Advancis Pharmaceutical Corporation, Avalon Pharmaceuticals, Inc. and Baxter Healthcare Corporation—the principal U.S. subsidiary of Baxter International, Inc.—are big component’s of Maryland’s success in the biopharmaceutical industry. A number of Maryland’s pharmaceutical and biotech companies, such as Rexahn, a privately held biopharmaceutical startup, are clustered at the Maryland Technology Development Center (MTDC) or in the heart of the Shady Grove Life Sciences Center, a biotechnology research park in Rockville. Biotechnology incubators active in Maryland’s biotech and pharmaceutical industry scene who are dedicated to nurturing start-up firms include Bard Laboratories and Johns Hopkins Bayview Alpha Center.

Delaware has a number of advantages in the biopharmaceutical industry, such as a highly-educated workforce and a high number of Ph.D.s per capita. In 2003, 88012 employees were working in establishments primarily involved in the biopharmaceutical industry, and representing employment growth of 256 percent from 1983 to 2003. The average annual wage per employee in 2003 was $65,200, below the national average of $72,600 per employee.

The state of Delaware possesses a strong foundation of biotechnology and pharmaceutical business, including leaders such as Roche Holdings, Inc., Intervet and the U.S. headquarters of AstraZeneca LP, one of the leading pharmaceutical companies worldwide. The Delaware Biotechnology Institute (DBI)—a partnership among state government, the state’s universities, and businesses whose interests center on the life sciences—is a leading research facility in the field of genomic plant research. With institutions of higher education such as the University of Delaware and Delaware State University that focus on life sciences and increase the state’s overall innovative output, Delaware is well positioned to foster its emerging life science technologies.

With an LQ of 1.0, the residents in Delaware working in the biopharmaceutical industry are employed in the same proportion as they are nationwide.


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The District of Columbia’s economy added more than 1,400 biopharmaceutical-related jobs between 1983 and 2003, representing an increase of 110.4 percent. In fact, in 2003, total biopharmaceutical-related employment amounted to more than 2,800 employees. The combination of a highly educated workforce and robust employment growth in biopharmaceuticals resulted in an employment LQ of 1.35. In terms of average annual wage per employee, the District of Columbia compares favorably to the nation–$62,100 versus $72,600. These employment and wage patterns indicate a vibrant biopharmaceutical industry.

The District of Columbia has been very successful in terms of R&D in the life sciences. Establishments classified primarily as life sciences R&D contributed to the area’s remarkably high employment and output LQ’s of 3.67 and 3.28, respectively. However, the area lags behind most other states in the South Atlantic region in terms of the pharmaceutical and medicine manufacturing sector (NAICS 3254).

The District of Columbia is home to biopharmaceutical giants such as Prestwick Pharmaceuticals, a product-based specialty pharmaceutical company, and Bayer Diagnostics. The District of Columbia has an advantage in terms of its proximity to U.S. government departments and biotech relevant laboratories like the National Institutes of Health. This and other government labs support the area’s biopharmaceutical community through personnel movements and government sponsored cooperative research agreements. “The Washington, D.C. cluster is frequently cited as benefiting from proximity to the U.S. National Institutes of Health which accounts for $25 billion in intramural research funding.”13

Washington, D.C. is also home to the Pharmaceutical Research and Manufacturers of America (PhRMA) representing America’s leading research-based pharmaceutical and biotechnology companies, and the Biotechnology Industry Organization (BIO) which serves the emerging biotechnology sector in the United States.

Florida’s biopharmaceutical companies, including Ivax Pharmaceutical, Inc., headquartered in Miami that develops, manufactures, and markets pharmaceutical products, Nabi Biopharmaceuticals, a vertically integrated biopharmaceutical company headquartered in Boca Raton, and Nephron Pharmaceuticals Corporation, a manufacturer of respiratory therapy solutions, are supported by a diverse group of advanced research hospitals, including Shands, Jackson Memorial, Arnold Palmer Hospital, and the Walt Disney Memorial Cancer Institute. Moreover, Florida’s biopharmaceutical industry benefits from its state university system. Four of the state’s universities are involved in sponsored medical research and linked to several technology-transfer centers and research parks around the state.

Florida has the human capital base to support the state’s growing biopharmaceutical industry. In terms of the sector as a whole, more than 6,400 workers were involved in the biopharmaceutical industry in 2003. This particular industry added more than 2,000 new jobs between 1993 and 2003, representing a 56.4 percent increase.

Another important tool used to analyze Florida’s biopharmaceutical industry is employment LQ. The state’s LQ of 0.28 suggests that this industry sector employs a smaller share of the local workforce than it does nationwide.


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While Florida’s real output and employment growth over the 1983-2003 period outpaced national averages, the wage distribution in this particular sector has been unable to keep pace with that of the rest of the nation. On average, in 2003 a job in Florida in the biopharmaceutical industry paid $56,100 versus $72,600 for the U.S.

The graph below states that South Atlantic Region’s biopharmaceutical employment has grown by nearly 2.4 times since 1983, outperforming industry growth in the nation as a whole.

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Biopharmaceutical Employment GrowthSouth Atlantic vs. United States, 1983-2003

South AtlanticUnited States

The table below provides South Atlantic states’ employment and real output measures with respect to the biopharmaceutical industry.

Size Growth LQ

(US=1)Size


(US=1)2003 '93-'03 2003 2003 '93-'03 2003 2003 2003

Delaware 880 -23.2% 0.68 87.8 21.3% 0.35 99.7 65.2Dist.of Columbia 2,817 27.9% 1.35 182.7 54.8% 0.45 64.8 62.1Florida 6,493 56.4% 0.28 911.2 160.2% 0.29 140.3 56.1Georgia 3,964 46.3% 0.33 682.9 125.6% 0.37 172.3 64.3Maryland 10,715 46.0% 1.38 1437.9 123.4% 1.16 134.2 62.6North Carolina 25,482 28.2% 2.14 4493.2 67.2% 2.70 176.3 50.1South Carolina 2,242 62.2% 0.39 223.4 93.4% 0.30 99.6 42.1Virginia 5,314 27.2% 0.48 608.5 13.4% 0.37 114.5 47.9West Virginia 1,879 106.1% 0.83 318.3 214.2% 1.19 169.4 56.8Total 59,785 36.2% 0.78 8945.9 81.6% 0.80 149.6 54.4Sources: Economy.com, BLS, Milken Institute.

South Atlantic Biopharmaceutical and Life Science OverviewPharmaceutical & Medicine Manufacturing, and Biological R&D

South Atlantic States


(US$ 96, Ths.)



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East South Central HighlightsBiopharmaceutical industry employment and productivity in the East South Central States, and the states’ abilities to attract pharmaceutical companies and R&D investment have not been uniform. The industry’s structure varies from state to state, reflecting differing R&D expenditures, incentives for the creation of new innovative pharmaceutical companies and human capital resident in the state’s economy.

With respect to employment growth in biopharmaceuticals, Kentucky is positioned as the top state among East South Central States – 220 percent over the 1993-2003 period. With over 2,100 employees engaged in the biopharmaceutical industry in 2003, this industry sector is clearly important to the state of Kentucky. Research further shows that Kentucky’s biopharmaceutical industry experienced a strong 290 percent increase in its real output growth over the past decade.

Among the state’s biopharmaceutical companies are California-based Large Scale Biology Corp., a manufacturer of biopharmaceuticals and other commercial proteins that recently opened a biopharmaceutical production facility at Owensboro’s MidAmerica Airpark and Kentucky and Xanodyne Pharmacal, Inc., a pharmaceutical company specializing in oncology, pain management, and hematology drug development. Kentucky is also home to biopharmaceutical companies such as Cardinal Health 404, Inc. and Murty Pharmaceuticals, Inc., which are primarily engaged in pharmaceutical preparation management.

Established by the Kentucky Innovation Act of 2000 and reporting directly to the Governor, the Department of Innovation and Commercialization for a Knowledge Based Economy focuses on priority research focus areas such as biopharmaceuticals to develop a technology-centered economy in the Commonwealth. Among Kentucky’s biopharmaceutical-oriented business incubators are the University of Kentucky’s (UK) Coldstream Research Campus with its Advanced Science and Technology Commercialization Center (ASTeCC) and the University of Kentucky’s top tier College of Pharmacy and the Louisville Life Sciences Research and Business Park. Collaboration among Kentucky’s universities, biopharmaceutical companies, the business community and state government ensure major advancements in Kentucky’s biopharmaceutical industry.

Employment in biopharmaceuticals in Tennessee grew almost 70 percent from 1983 and 1993. However, since 1993, the state has experienced rapid decline, losing more than 500 jobs. In 2003, the biopharmaceutical industry employed more than 3,800 people and generated a real output of over $609 million. However, other economic indicators are less optimistic. The state’s employment LQ of 0.46 shows that the state has a smaller share of employment in this particular industry sector than is found nationally.

The state’s real output in this industry sector rose more than 213 percent between 1983 and 2003. In terms of the state’s real output, Tennessee’s biopharmaceutical industry recorded an LQ of 0.52 in 2003. This indicates that the industry’s contribution to real output in Tennessee has been almost 50 percent below the national average.

Tennessee has an enviable biotechnology infrastructure and is home to leading pharmaceutical companies including Procter & Gamble Pharmaceuticals, and Chattem, Inc., headquartered in Memphis


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and Chattanooga, respectively. The Tennessee Biotechnology Association (TBA) supports life science education, research, health care and technology-transfer programs while the Memphis Regional Chamber of Commerce and Memphis Biotech Foundation encourage biotechnology development. A number of biopharmaceutical companies, including GTx, Inc., are headquartered in Nashville.

Tennessee is maintaining momentum by establishing research technology parks in an attempt to nurture growth in the industry. For example, East Tennessee’s newest high-tech industrial park, Horizon Center, is located close to leading research and development laboratories at Oak Ridge National Laboratory, the University of Tennessee, Vanderbilt University and the National Transportation Research Center. Theragenics, developer of a leading-edge cancer-fighting technology, has expanded beyond its headquarters in Atlanta to a location in Oak Ridge.

Pharmaceutical industry leaders predict a bright future for Tennessee’s biopharmaceutical industry. Lawrence Young, Horizon Center president suggests, “Horizon Center is perfect for biotechnology and pharmaceutical companies like Theragenics … Through a unique cooperative agreement with the Department of Energy, we are able to offer unsurpassed access to advanced machinery and technology straight out of the nearby laboratories.”14 Furthermore, the Tri-Cities area of Upper East Tennessee—Johnson City, Bristol and Kingsport—are home to biopharmaceutical companies and research facilities, including King Pharmaceuticals, Inc. headquartered in Bristol and East Tennessee State University’s College of Medicine.

The biopharmaceutical industry has not been a major contributor in terms of employment growth in Mississippi. The employment growth rate in this sector—6.6 percent between 1983 and 1993—was reversed between 1993 and 2003. In 2003, 1,185 workers were employed in the biopharmaceutical industry there, representing a 21.3 percent decline over the previous 10-year period. Evidence of the state’s weak biopharmaceutical industry presence is the state’s low employment LQ of 0.34. Nevertheless, the industry continues to provide many high-wage jobs in the state’s economy.

Although the state’s biopharmaceutical industry also suffered a downturn in productivity—real output grew by 81.5 percent between 1983 and 1993 versus 4.4 percent between 1993 and 2003—the state’s research and development support remains favorable. Mississippi’s universities house a significant collection of research capabilities including the University of Mississippi’s Research Institute of Pharmaceutical Sciences which is dedicated to enhancing the development of the pharmaceutical industry in Mississippi. The institute focuses primarily on the research of natural drug products and their conversion into useful pharmaceuticals.

Mississippi is promoting the growth of pharmaceutical companies such as Cypress Pharmaceutical, Inc. and Pharma Pac LLC, that serve as anchors that establish skilled labor pools and provide knowledge spillovers for new dedicated pharmaceutical and biotechnology companies.

As depicted by the chart below, since 1983, East South Central’s biopharmaceutical employment grew by 75 percent, keeping pace with that of the nation as a whole.


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Biopharmaceutical Employment GrowthEast South Central vs. United States, 1983-2003

East South CentralUnited States

The table below summarizes East South Central States’ employment and real output measures with respect to the biopharmaceutical industry.

Size Growth LQ

(US=1)Size


(US=1)2003 '93-'03 2003 2003 '93-'03 2003 2003 2003

Alabama 1,392 55.4% 0.24 96.8 62.1% 0.12 69.5 46.1Kentucky 2,161 220.2% 0.39 170.7 289.3% 0.23 79.0 30.2Mississippi 1,185 -21.3% 0.34 169.1 4.4% 0.40 142.7 49.9Tennessee 3,833 -11.9% 0.46 609.5 73.6% 0.52 159.0 52.8Total 8,571 15.4% 0.37 1046.2 69.6% 0.33 122.1 45.6Sources: Economy.com, BLS, Milken Institute.

East South Central Biopharmaceutical and Life Science OverviewPharmaceutical & Medicine Manufacturing, and Biological R&D

East South Central States


(US$ 96, Ths.)


West South Central HighlightsThe West South Central states had more than 13,800 employees who made their living in the biopharmaceutical industry in 2003, more than 12,000 in Texas alone. The 1983-1993 time period witnessed strong employment growth—104 percent—in this particular industry sector. Texas also experienced positive growth in employment, 27.2 percent, between 1993 and 2003, though at rates below the national average of 28.1 percent. With an industry employment LQ of 0.42 in 2003, also lower than the national average, the state’s biopharmaceutical industry has room to grow.

The most apparent sign of the maturity of Texas’ biopharmaceutical industry is the explosion in its real GSP growth over the past 20 years. Between 1983 and 2003, real output in this sector grew by almost 300 percent. As remarkable as this is, the state’s output LQ of 0.32 was almost 70 percent below the national average in 2003.


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Texas has done notably well attracting pharmaceutical, biotech and related companies. Companies that contribute to the performance of Texas’ biopharmaceutical industry include DFB Pharmaceuticals, Inc., CytoGenix, Inc., Falcon Pharmaceuticals, Ltd., Tanox Biosystems, Mission Pharmacal Company and Galderma Laboratories, L.P.–an important pharmaceutical group whose concentration is centered on dermatology.

Working in conjunction with the state’s intellectual resources for scientific research and business assistance, such as the Texas’ Healthcare and Bioscience Institute (THBI), the College of Pharmacy and Health Sciences (COPHS), Baylor College of Medicine and the M.D. Anderson Cancer Center, helps the state compete effectively in this industry sector. Biopharmaceutical-related product development stemming from the National Space Biomedical Research Institute (NSBRI) includes treatments for osteoporosis. In addition, BioHouston Inc., a biomedical center with more than 100 institutions and life science and biotech companies in the Houston region, works to ensure that the state’s biopharmaceutical industry is highly competitive with other biotechnology centers.

Since 1983, West South Central’s biopharmaceutical employment has risen by 130 percent, outpacing industry growth in the nation as a whole.

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Biopharmaceutical Employment GrowthWest South Central vs. United States, 1983-2003

West South CentralUnited States

The table below summarizes West South Central States’ employment and real output measures with respect to the biopharmaceutical industry.

Size Growth LQ

(US=1)Size


(US=1)2003 '93-'03 2003 2003 '93-'03 2003 2003 2003

Arkansas 366 -2.4% 0.10 14.0 -23.7% 0.03 38.2 24.7Louisiana 674 -30.6% 0.11 58.9 -46.1% 0.07 87.4 43.5Oklahoma 541 16.7% 0.12 118.6 45.7% 0.21 219.3 53.0Texas 12,311 27.2% 0.42 1512.0 97.5% 0.32 122.8 59.1Total 13,892 20.9% 0.32 1703.5 74.8% 0.26 122.6 57.2Sources: Economy.com, BLS, Milken Institute.

West South Central Biopharmaceutical and Life Science OverviewPharmaceutical & Medicine Manufacturing, and Biological R&D

West South Central States


(US$ 96, Ths.)



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Mountain HighlightsAmong the Mountain states, the biopharmaceutical industry is becoming more geographically concentrated in a few locations. The outlook for Colorado’s biopharmaceutical industry is positive. Colorado’s biopharmaceutical industry produced more than $450 million of the state’s economy in 2003. Its real output has been growing at a 10-year rate of almost 76 percent (1993-2003) and employed more than 5,000 highly skilled workers in 2003. In the past 10 years alone, more than 2,000 jobs were added in this particular industry sector. The state’s expert workforce ranges from plant operators to Ph.D. research scientists in biopharmaceutical-related occupations. The state’s employment LQ of 0.77 signifies that Colorado’s biopharmaceutical-related employment concentration is 23 percent less than the national average. The challenge for Colorado’s biopharmaceutical industry—measured by an output LQ of 0.44 in 2003—is to ramp up productivity in order to become a primary driver of the economy’s GSP. Despite healthy job creation in the biopharmaceutical industry, the industry’s wage distribution—$41,700 per employee in 2003—is less than the U.S. average of $72,600 per employee in 2003.

Colorado is home to a large number of dedicated pharmaceutical and biotech companies, including Array BioPharma, a drug discovery company headquartered in Boulder that creates new small molecule drugs, and Roche Colorado Corporation with its single location in Boulder. Among the larger companies with a presence in the state are Amgen, Inc., Sandoz, Inc., and Geneva Pharmaceuticals, one of the leading generic pharmaceutical manufacturers and marketers in the United States.

Significant research centers supporting Colorado’s biopharmaceutical industry include the University of Colorado system. The Colorado Alliance for Bioengineering is responsible for the coordination of biotech activities among faculty in all universities throughout the state, while the Colorado Bioprocessing Center at the Colorado State University in Fort Collins develops therapeutic compounds and biologics for biotech companies.

Employment in Utah’s biopharmaceutical industry has been rising steadily for the last two decades. In 2003, more than 5,200 people held Utah’s biopharmaceutical-based jobs, up more than 3,000 from 1993. It is interesting to note that employment in Utah in this particular industry sector grew at a significantly faster rate, 194 percent, between 1993 and 2003 than for the Mountain States as a whole, or for the nation (28.1 percent). The state’s employment LQ of 1.57 is continuing a pattern of solid growth and high employment concentration in this industry sector. In addition to the positive employment numbers, the state’s biopharmaceutical industry generated more than $330 million in real output in 2003 and experienced more than 250 percent in real output growth between 1993 and 2003, while the U.S. exhibited 77.3 percent in aggregate real output growth. The industry’s average annual wage per employee in Utah was $36,900 in 2003, compared to the U.S. average annual wage of $72,600.

A large number of research centers and world-class educational institutions, such as the University of Utah Research Park and the affiliated University of Utah Medical Center, as well as the Huntsman Cancer Institute, support the state’s growing critical mass of biopharmaceutical companies, including Myrad Genetics Inc., Alpine Health Products LLC, Pro Pac Labs, Inc., and NPS Pharmaceuticals.

Biopharmaceutical employment growth in the Mountain Region near tripled, rising by almost 200 percent since 1993.


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Biopharmaceutical Employment GrowthMountain vs. United States, 1983-2003

MountainUnited States

The table below summarizes Mountain States’ employment and real output measures with respect to the biopharmaceutical industry.

Size Growth LQ

(US=1)Size


(US=1)2003 '93-'03 2003 2003 '93-'03 2003 2003 2003

Arizona 1,183 0.2% 0.16 151.8 10.3% 0.14 128.3 52.9Colorado 5,174 86.9% 0.77 458.8 75.7% 0.44 88.7 41.7Idaho 19 -56.7% 0.01 1.1 -63.5% 0.00 56.5 42.4New Mexico 914 30.2% 0.38 46.9 20.5% 0.12 51.4 41.6Montana 563 83.8% 0.45 22.4 26.1% 0.16 39.8 27.9Utah 5,287 194.0% 1.57 330.5 258.8% 0.76 62.5 36.9Nevada 425 89.5% 0.12 31.2 110.6% 0.06 73.4 54.8Wyoming 61 -16.6% 0.08 17.2 26.2% 0.13 280.0 67.9Total 13,627 92.0% 0.51 1060.0 83.0% 0.27 77.8 40.8Sources: Economy.com, BLS, Milken Institute.

Mountain Biopharmaceutical and Life Science OverviewPharmaceutical & Medicine Manufacturing, and Biological R&D

Mountain States


(US$ 96, Ths.)


Pacific HighlightsCalifornia’s biopharmaceutical industry is a significant force in the state’s economy. An examination of this particular sector shows that biopharmaceutical-based employment in 2003 reached almost 70,000. The impact of this industry sector is evidenced by the state’s high employment LQ of 1.55. Being a little more than 50 percent above the national average LQ means that California’s biopharmaceutical industry enjoys an advantageous position. Moreover, the return on research investment to the state’s economy is remarkable. In 2003, the biopharmaceutical industry generated more than $9.6 billion in real output. The industry’s real output in California grew 328 percent during the 20-year span from 1983-2003, compared to real output growth of 230 percent in the nation.

Numerous pharmaceutical companies illustrate the success of California’s biopharmaceutical industry well. In Southern California, the San Diego area in particular has become one of the most advanced centers in the United States for biotech and biomedicine. Among Southern California’s large


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biopharmaceutical companies are Pfizer Global Research & Development in La Jolla, Amgen in Thousand Oaks and Allergan Inc., headquartered in Irvine; all are part of the state’s vital biopharmaceutical industry. Johnson & Johnson’s Pharmaceutical Research & Development, LLC in La Jolla has an integrated genomics-based drug-discovery capability with the task of converting genomic discoveries into marketable drugs. Sankyo Pharma, the U.S. subsidiary of Tokyo-headquartered Sankyo, Co., has established the Sankyo Pharma Research Institute in San Diego. IDEC Pharmaceuticals, (which recently merged with Biogen to create Biogen IDEC) also based in San Diego, developed the first monoclonal antibody found to be effective for the treatment of cancer in the United States. Baxter Healthcare Corporation with its Baxter BioScience facility in Thousand Oaks provides biotechnology medicines to treat hemophilia, immune deficiencies and other blood-related disorders.

Northern California also has a remarkably rich cluster of companies engaged in pharmaceutical and biotech research, including Genentech Inc., Chiron Corporation, Abbott Laboratories, Bayer HealthCare Biological Products Division in Berkeley, and ALZA Corporation, headquartered in Mountain View, a leading developer and manufacturer of drug delivery-based products for the global healthcare industry. “Large pharmaceutical companies played a key role in growing Northern California’s biotechnology industry, investing $1.5 billion in joint ventures, strategic alliances, and licensing and royalty agreements with biotechnology firms.”15

The state’s biopharmaceutical industry is deeply rooted in California’s academic life science institutions and clinical research facilities that include the Bay Area Bioscience Center, Stanford University and the University of California campuses across the state. Southern California’s academic research institutions include The Burnham Institute, The Burns and Allen Research Institute of the Cedars-Sinai Medical Center, Caltech and City of Hope.

Washington continues to rely on the biopharmaceutical industry as a means for future growth, achieving ongoing increases in employment and real output in this particular industry sector. Direct employment, including jobs that range from conducting research to manufacturing pharmaceuticals, amounted to more than 8,700 employees in 2003. Overall employment in this particular industry sector rose by more than 380 percent between 1983 and 2003. Another important indicator of the strength of Washington’s biopharmaceutical industry derives from the state’s employment LQ of 1.05 indicating that the concentration of the biopharmaceutical industry in Washington is slightly greater than the nation as a whole.

Washington is home to a flourishing biopharmaceutical community that includes premier research institutions. The Fred Hutchinson Cancer Research Center, University of Washington and Washington State University provide a vast biomedical training ground. In addition, the local biopharmaceutical industry enjoys considerable advantages owing to the presence of highly regarded research and development companies that are focused on the pharmaceutical industry and biotechnology, and are important to sustaining Washington’s biopharmaceutical industry competitiveness, including Amgen Inc., Berlex Laboratories, LLC, and ICOS Corporation.

In addition, Nastech Pharmaceutical Company Inc., whose corporate headquarter is located in Bothell, Washington is an emerging pharmaceutical company that develops products based on applying proprietary drug delivery technologies.


40

In the Pacific Region, biopharmaceutical employment rose by 120 percent since 1983, while growing by only 75 percent in the nation as a whole.

0302

0100

9998

9796

9594

9392

9190

8988

8786

8584

83

220

200

180

160

140

120

100

80

Index 1983=100


Biopharmaceutical Employment GrowthPacific vs. United States, 1983-2003

PacificUnited States

Pacific States’ biopharmaceutical industry profile is summarized below.

Size Growth LQ

(US=1)Size


(US=1)2003 '93-'03 2003 2003 '93-'03 2003 2003 2003

Alaska 85 117.9% 0.09 4.2 86.9% 0.02 49.0 39.0California 69,986 43.8% 1.55 9637.9 101.2% 1.11 137.7 73.9Hawaii 317 71.5% 0.18 26.0 140.0% 0.09 82.1 44.9Oregon 1,453 26.2% 0.30 73.6 55.4% 0.09 50.6 29.4Washington 8,714 47.5% 1.05 857.1 60.3% 0.62 98.4 58.8Total 80,555 44.0% 1.32 10598.8 96.8% 0.94 131.6 71.3Sources: Economy.com, BLS, Milken Institute.

Pacific Biopharmaceutical and Life Science OverviewPharmaceutical & Medicine Manufacturing, and Biological R&D

Pacific States


(US$ 96, Ths.)


The first table below provides an overview of the biopharmaceutical industry for all states (including D.C.). The two tables that follow provide an overview of the detailed industries that comprise biopharmaceuticals, namely, Pharmaceuticals and Medicine Mfg. (NAICS 3254), and R&D in the Life Sciences (NAICS 5417102).


41

Employment LQ(US=1)

Real Output LQ

(US=1)

Real Output PerEmployee

(US$ '96, Thous.)

Wage PerEmployee

(US$, Thous.)Abbrv. State 1983 1993 2003 '83-'93 '93-'03 '83-'03 2003 1983 1993 2003 '83-'93 '93-'03 '83-'03 2003 2003 2003AK Alaska 0.053 0.039 0.085 -27.0% 117.9% 59.0% 0.09 6.0 2.2 4.2 -62.7% 86.9% -30.3% 0.02 49.0 39.0AL Alabama 0.452 0.896 1.392 98.4% 55.4% 208.3% 0.24 29.1 59.7 96.8 105.1% 62.1% 232.4% 0.12 69.5 46.1AR Arkansas 0.191 0.375 0.366 96.1% -2.4% 91.3% 0.10 10.2 18.3 14.0 80.4% -23.7% 37.6% 0.03 38.2 24.7AZ Arizona 0.792 1.180 1.183 49.1% 0.2% 49.4% 0.16 70.7 137.7 151.8 94.9% 10.3% 114.9% 0.14 128.3 52.9CA California 34.676 48.670 69.986 40.4% 43.8% 101.8% 1.55 2251.8 4789.9 9637.9 112.7% 101.2% 328.0% 1.11 137.7 73.9CO Colorado 2.411 2.769 5.174 14.8% 86.9% 114.6% 0.77 198.7 261.2 458.8 31.5% 75.7% 131.0% 0.44 88.7 41.7CT Connecticut 5.293 6.901 9.909 30.4% 43.6% 87.2% 1.92 453.2 774.9 1820.5 71.0% 134.9% 301.7% 1.73 183.7 120.1DC District of Columbia 1.339 2.202 2.817 64.4% 27.9% 110.4% 1.35 68.7 118.0 182.7 71.9% 54.8% 166.0% 0.45 64.8 62.1DE Delaware 0.366 1.146 0.880 212.9% -23.2% 140.4% 0.68 23.7 72.4 87.8 204.8% 21.3% 269.9% 0.35 99.7 65.2FL Florida 3.260 4.151 6.493 27.3% 56.4% 99.1% 0.28 161.2 350.2 911.2 117.3% 160.2% 465.3% 0.29 140.3 56.1GA Georgia 2.001 2.709 3.964 35.4% 46.3% 98.1% 0.33 198.8 302.7 682.9 52.3% 125.6% 243.5% 0.37 172.3 64.3HI Hawaii 0.112 0.185 0.317 64.8% 71.5% 182.7% 0.18 5.0 10.8 26.0 117.9% 140.0% 423.1% 0.09 82.1 44.9IA Iowa 1.083 1.921 2.519 77.5% 31.1% 132.7% 0.56 123.4 303.1 332.6 145.7% 9.7% 169.6% 0.56 132.1 34.7ID Idaho 0.064 0.045 0.019 -29.7% -56.7% -69.6% 0.01 2.8 3.0 1.1 7.8% -63.5% -60.7% 0.00 56.5 42.4IL Illinois 15.046 17.539 21.914 16.6% 24.9% 45.6% 1.20 1692.3 2299.4 3381.2 35.9% 47.0% 99.8% 1.12 154.3 77.4IN Indiana 17.595 17.946 19.497 2.0% 8.6% 10.8% 2.15 1666.8 2516.4 5711.4 51.0% 127.0% 242.7% 4.65 292.9 84.7KS Kansas 1.943 1.866 1.481 -4.0% -20.6% -23.8% 0.36 143.3 132.1 187.4 -7.8% 41.8% 30.7% 0.34 126.5 45.8KY Kentucky 0.517 0.675 2.161 30.5% 220.2% 317.9% 0.39 32.4 43.9 170.7 35.3% 289.3% 426.8% 0.23 79.0 30.2LA Louisiana 0.527 0.971 0.674 84.1% -30.6% 27.8% 0.11 59.7 109.2 58.9 83.0% -46.1% -1.3% 0.07 87.4 43.5MA Massachusetts 5.225 10.890 21.419 108.4% 96.7% 310.0% 2.15 308.1 839.5 2351.6 172.5% 180.1% 663.3% 1.32 109.8 72.0MD Maryland 5.526 7.337 10.715 32.8% 46.0% 93.9% 1.38 325.1 643.7 1437.9 98.0% 123.4% 342.3% 1.16 134.2 62.6ME Maine 0.572 1.031 1.404 80.3% 36.2% 145.6% 0.74 27.0 70.2 112.0 160.3% 59.6% 315.5% 0.48 79.8 47.4MI Michigan 7.741 10.198 12.207 31.7% 19.7% 57.7% 0.88 606.7 1299.0 1926.8 114.1% 48.3% 217.6% 0.97 157.8 66.9MN Minnesota 1.467 2.443 2.648 66.5% 8.4% 80.5% 0.32 84.2 155.4 279.5 84.6% 79.9% 232.2% 0.23 105.5 62.7MO Missouri 6.134 7.236 6.132 18.0% -15.3% 0.0% 0.73 652.8 894.1 1085.3 37.0% 21.4% 66.3% 0.94 177.0 68.1MS Mississippi 1.291 1.505 1.185 16.6% -21.3% -8.2% 0.34 89.3 162.0 169.1 81.5% 4.4% 89.4% 0.40 142.7 49.9MT Montana 0.127 0.306 0.563 140.9% 83.8% 343.0% 0.45 9.4 17.8 22.4 89.3% 26.1% 138.7% 0.16 39.8 27.9NC North Carolina 7.321 19.879 25.482 171.5% 28.2% 248.1% 2.14 677.2 2686.9 4493.2 296.8% 67.2% 563.5% 2.70 176.3 50.1ND North Dakota 0.031 0.009 0.018 -71.5% 100.7% -42.7% 0.02 1.6 0.4 0.5 -75.8% 26.9% -69.3% 0.00 28.1 19.4NE Nebraska 1.153 1.466 1.811 27.2% 23.5% 57.1% 0.64 79.4 149.6 316.6 88.4% 111.6% 298.7% 0.88 174.8 44.0NH New Hampshire 0.107 0.283 1.135 163.4% 301.6% 957.9% 0.59 4.1 17.9 85.3 338.6% 376.8% 1991.0% 0.27 75.2 50.1NJ New Jersey 42.799 49.026 46.356 14.6% -5.4% 8.3% 3.72 3376.6 6096.8 10173.3 80.6% 66.9% 201.3% 4.38 219.5 115.5NM New Mexico 0.400 0.702 0.914 75.3% 30.2% 128.2% 0.38 20.5 39.0 46.9 90.2% 20.5% 129.1% 0.12 51.4 41.6NV Nevada 0.164 0.224 0.425 36.8% 89.5% 159.1% 0.12 9.5 14.8 31.2 55.5% 110.6% 227.5% 0.06 73.4 54.8NY New York 22.114 29.312 36.313 32.5% 23.9% 64.2% 1.38 2202.1 3083.0 4501.8 40.0% 46.0% 104.4% 0.86 124.0 55.5OH Ohio 3.319 3.828 4.642 15.3% 21.3% 39.9% 0.27 273.1 341.2 402.5 25.0% 18.0% 47.4% 0.17 86.7 52.2OK Oklahoma 0.531 0.464 0.541 -12.7% 16.7% 1.9% 0.12 47.2 81.4 118.6 72.6% 45.7% 151.4% 0.21 219.3 53.0OR Oregon 0.473 1.151 1.453 143.6% 26.2% 207.3% 0.30 17.6 47.3 73.6 169.6% 55.4% 319.0% 0.09 50.6 29.4PA Pennsylvania 19.900 25.939 34.673 30.3% 33.7% 74.2% 1.97 1991.3 4274.8 7341.7 114.7% 71.7% 268.7% 2.85 211.7 87.9RI Rhode Island 0.971 0.745 1.837 -23.3% 146.6% 89.2% 1.21 39.1 44.6 148.3 14.0% 232.5% 279.0% 0.63 80.7 53.0SC South Carolina 1.103 1.382 2.242 25.3% 62.2% 103.3% 0.39 72.8 115.5 223.4 58.7% 93.4% 207.0% 0.30 99.6 42.1SD South Dakota 0.016 0.058 0.078 256.2% 33.2% 374.6% 0.07 0.8 2.5 2.2 211.0% -14.3% 166.7% 0.01 27.7 14.2TN Tennessee 2.571 4.353 3.833 69.3% -11.9% 49.1% 0.46 194.4 351.1 609.5 80.6% 73.6% 213.6% 0.52 159.0 52.8TX Texas 4.744 9.678 12.311 104.0% 27.2% 159.5% 0.42 380.1 765.6 1512.0 101.5% 97.5% 297.8% 0.32 122.8 59.1UT Utah 0.681 1.799 5.287 164.1% 194.0% 676.3% 1.57 41.4 92.1 330.5 122.7% 258.8% 699.0% 0.76 62.5 36.9VA Virginia 3.785 4.177 5.314 10.3% 27.2% 40.4% 0.48 345.4 536.6 608.5 55.4% 13.4% 76.2% 0.37 114.5 47.9VT Vermont 0.010 0.046 0.122 348.9% 166.8% 1097.8% 0.13 0.5 2.4 6.7 404.1% 181.2% 1317.4% 0.06 54.7 31.9WA Washington 1.809 5.906 8.714 226.5% 47.5% 381.8% 1.05 138.6 534.8 857.1 285.9% 60.3% 518.5% 0.62 98.4 58.8WI Wisconsin 1.471 2.868 4.144 94.9% 44.5% 181.6% 0.48 99.2 232.9 445.4 134.9% 91.2% 349.1% 0.39 107.5 43.1WV W Virginia 0.446 0.912 1.879 104.3% 106.1% 321.0% 0.83 40.3 101.3 318.3 151.4% 214.2% 689.7% 1.19 169.4 56.8WY Wyoming 0.003 0.074 0.061 2805.9% -16.6% 2323.6% 0.08 0.3 13.6 17.2 4335.9% 26.2% 5499.1% 0.13 280.0 67.9

US United States* 231.726 317.411 406.689 37.0% 28.1% 75.5% 1.00 19352.9 36013.2 63966.7 86.1% 77.6% 230.5% 1.00 157.3 72.6*United States figures are based on the sum of all state and D.C. totalsSources: Milken Institute, Economy.com, BLS.

Total Biopharmaceutical (NAICS 3254 + NAICS 5417102) Overview

Employment Size (Thous.) Employment Growth

Real Output Level (US$ '96, Mill.) Real Output Growth

Employment LQ(US=1)

Real Output LQ

(US=1)


(US$ '96, Thous.)

Wage PerEmployee

(US$, Thous.)Abbrv. State 1983 1993 2003 '83-'93 '93-'03 '83-'03 2003 1983 1993 2003 '83-'93 '93-'03 '83-'03 2003 2003 2003AK Alaska 0.000 0.000 0.003 NA NA NA 0.00 0.0 0.1 0.4 NA 703.9% NA 0.00 136.7 48.8AL Alabama 0.051 0.075 0.390 47.1% 420.0% 664.7% 0.10 3.3 9.8 40.2 194.2% 309.4% 1104.2% 0.06 103.0 44.9AR Arkansas 0.049 0.176 0.066 259.2% -62.5% 34.7% 0.03 2.1 8.3 5.1 289.4% -37.6% 142.8% 0.01 78.0 42.4AZ Arizona 0.668 0.871 0.652 30.4% -25.1% -2.4% 0.13 64.3 120.2 133.1 86.7% 10.7% 106.8% 0.14 204.1 67.3CA California 18.891 27.974 38.799 48.1% 38.7% 105.4% 1.24 1325.8 3201.8 7458.0 141.5% 132.9% 462.5% 0.99 192.2 91.9CO Colorado 1.488 1.149 3.363 -22.8% 192.7% 126.0% 0.72 144.1 157.9 332.7 9.6% 110.7% 130.9% 0.37 98.9 37.3CT Connecticut 4.978 6.267 9.052 25.9% 44.4% 81.8% 2.53 427.6 723.6 1717.3 69.2% 137.3% 301.6% 1.88 189.7 125.1DC District of Columbia 0.066 0.134 0.079 103.0% -41.0% 19.7% 0.05 2.6 5.8 9.2 120.7% 59.0% 250.8% 0.03 116.0 103.7DE Delaware 0.305 1.035 0.823 239.3% -20.5% 169.8% 0.92 22.1 70.6 85.8 219.0% 21.6% 287.9% 0.39 104.3 68.2FL Florida 2.764 2.929 4.544 6.0% 55.1% 64.4% 0.29 135.9 293.6 823.2 116.1% 180.4% 505.9% 0.30 181.2 63.3GA Georgia 1.773 2.047 3.058 15.5% 49.4% 72.5% 0.36 185.5 258.5 610.0 39.3% 136.0% 228.8% 0.38 199.5 67.0HI Hawaii 0.000 0.006 0.096 NA 1500.0% NA 0.08 0.0 0.7 14.7 NA 1909.9% NA 0.06 152.6 43.8IA Iowa 0.945 1.718 2.304 81.8% 34.1% 143.8% 0.74 115.4 291.6 323.0 152.7% 10.8% 179.9% 0.63 140.2 35.0ID Idaho 0.056 0.029 0.002 -48.2% -93.1% -96.4% 0.00 2.4 2.1 0.3 -12.3% -87.3% -88.8% 0.00 131.5 33.4IL Illinois 14.063 16.156 20.036 14.9% 24.0% 42.5% 1.58 1642.5 2220.0 3273.1 35.2% 47.4% 99.3% 1.25 163.4 81.2IN Indiana 16.987 16.908 18.338 -0.5% 8.5% 8.0% 2.91 1634.4 2451.4 5594.2 50.0% 128.2% 242.3% 5.25 305.1 87.0KS Kansas 1.679 1.482 1.091 -11.7% -26.4% -35.0% 0.38 131.7 114.7 170.5 -13.0% 48.7% 29.4% 0.36 156.3 50.8KY Kentucky 0.147 0.140 1.486 -4.8% 961.4% 910.9% 0.38 9.3 9.1 132.2 -1.3% 1347.9% 1328.5% 0.20 89.0 28.1LA Louisiana 0.316 0.686 0.292 117.1% -57.4% -7.6% 0.07 41.9 82.3 35.0 96.6% -57.5% -16.4% 0.05 119.9 41.1MA Massachusetts 2.004 3.505 8.524 74.9% 143.2% 325.3% 1.23 124.6 331.2 1499.2 165.7% 352.7% 1102.9% 0.97 175.9 104.8MD Maryland 2.698 3.430 4.396 27.1% 28.2% 62.9% 0.81 191.5 388.5 1008.4 102.9% 159.6% 426.6% 0.94 229.4 81.4ME Maine 0.408 0.536 0.572 31.4% 6.7% 40.2% 0.43 20.0 43.7 63.0 118.2% 44.3% 214.7% 0.31 110.2 51.3MI Michigan 7.310 9.571 11.532 30.9% 20.5% 57.8% 1.20 576.7 1261.4 1877.2 118.7% 48.8% 225.5% 1.08 162.8 68.3MN Minnesota 0.845 1.582 1.370 87.2% -13.4% 62.1% 0.24 54.5 107.1 182.4 96.3% 70.4% 234.4% 0.18 133.2 85.3MO Missouri 5.685 6.464 5.118 13.7% -20.8% -10.0% 0.88 628.0 843.2 1027.8 34.3% 21.9% 63.7% 1.03 200.8 74.8MS Mississippi 1.185 1.336 0.956 12.7% -28.4% -19.3% 0.39 81.7 152.8 159.9 87.0% 4.7% 95.8% 0.44 167.3 54.3MT Montana 0.000 0.071 0.099 NA 39.4% NA 0.11 0.0 3.9 5.2 NA 32.7% NA 0.04 52.9 31.6NC North Carolina 5.780 16.775 20.976 190.2% 25.0% 262.9% 2.53 576.2 2402.0 4130.7 316.8% 72.0% 616.8% 2.85 196.9 48.0ND North Dakota 0.025 0.000 0.000 -100.0% NA -100.0% 0.00 1.3 0.0 0.0 -98.4% -100.0% -100.0% 0.00 NA NANE Nebraska 1.126 1.430 1.747 27.0% 22.2% 55.2% 0.89 78.1 147.9 313.8 89.3% 112.1% 301.6% 1.00 179.6 44.7NH New Hampshire 0.047 0.141 0.926 200.0% 556.7% 1870.2% 0.69 1.1 7.5 68.4 589.9% 815.9% 6218.9% 0.25 73.8 47.8NJ New Jersey 38.483 42.750 39.980 11.1% -6.5% 3.9% 4.62 3084.7 5561.5 9542.3 80.3% 71.6% 209.3% 4.73 238.7 121.9NM New Mexico 0.052 0.168 0.201 223.1% 19.6% 286.5% 0.12 2.3 7.4 18.3 225.1% 148.5% 707.7% 0.05 91.2 38.1NV Nevada 0.034 0.077 0.292 126.5% 279.2% 758.8% 0.12 0.9 4.1 24.0 335.4% 483.3% 2439.9% 0.06 82.0 55.3NY New York 14.795 18.391 20.870 24.3% 13.5% 41.1% 1.14 1717.5 2334.3 3709.8 35.9% 58.9% 116.0% 0.81 177.8 72.0OH Ohio 2.014 2.519 3.099 25.1% 23.0% 53.9% 0.26 171.3 241.8 270.1 41.1% 11.7% 57.6% 0.13 87.1 47.8OK Oklahoma 0.414 0.288 0.305 -30.4% 5.9% -26.3% 0.10 41.1 70.4 109.0 71.1% 54.9% 165.1% 0.22 357.4 66.3OR Oregon 0.332 0.665 0.821 100.3% 23.5% 147.3% 0.24 10.8 24.9 32.4 130.3% 30.1% 199.7% 0.04 39.4 28.6PA Pennsylvania 17.614 20.764 26.966 17.9% 29.9% 53.1% 2.21 1859.1 3880.6 6731.8 108.7% 73.5% 262.1% 3.01 249.6 97.6RI Rhode Island 0.612 0.326 1.182 -46.7% 262.6% 93.1% 1.12 21.8 18.5 107.4 -15.0% 157.8% 119.0% 0.53 90.9 50.4SC South Carolina 1.031 1.245 2.077 20.8% 66.8% 101.5% 0.53 68.3 105.3 212.8 54.3% 102.0% 211.8% 0.33 102.5 41.6SD South Dakota 0.014 0.050 0.063 257.1% 26.0% 350.0% 0.08 0.7 2.0 1.3 172.9% -36.2% 74.2% 0.01 20.3 12.0TN Tennessee 2.247 3.751 3.254 66.9% -13.2% 44.8% 0.56 170.9 312.5 580.6 82.9% 85.8% 239.8% 0.57 178.4 54.2TX Texas 2.894 6.152 7.936 112.6% 29.0% 174.2% 0.39 261.1 518.7 1130.5 98.6% 117.9% 332.9% 0.28 142.5 60.8UT Utah 0.252 1.207 4.459 379.0% 269.4% 1669.4% 1.91 23.6 69.0 291.6 192.2% 322.7% 1135.1% 0.77 65.4 37.3VA Virginia 3.193 2.826 3.403 -11.5% 20.4% 6.6% 0.45 298.3 415.3 455.4 39.2% 9.6% 52.7% 0.32 133.8 44.8VT Vermont 0.002 0.021 0.091 950.0% 333.3% 4450.0% 0.14 0.1 0.7 4.1 827.5% 457.3% 5068.8% 0.04 45.4 25.7WA Washington 0.253 1.277 2.469 404.7% 93.3% 875.9% 0.43 14.4 106.9 552.6 644.7% 417.0% 3749.8% 0.46 223.8 118.3WI Wisconsin 0.749 1.634 2.690 118.2% 64.6% 259.1% 0.44 64.2 175.3 381.1 173.3% 117.3% 494.0% 0.39 141.7 51.8WV W Virginia 0.237 0.650 1.413 174.3% 117.4% 496.2% 0.89 14.7 77.0 293.5 423.1% 281.1% 1893.6% 1.27 207.7 62.6WY Wyoming 0.000 0.066 0.037 NA -43.9% NA 0.07 0.0 13.1 15.8 32555.0% 20.8% 39347.5% 0.14 426.5 82.2

US United States* 177.561 229.450 282.298 29.2% 23.0% 59.0% 1.00 16050.6 29650.6 55558.4 84.7% 87.4% 246.1% 1.00 196.5 79.9*United States figures are based on the sum of all state and D.C. totals (Actual BLS 2003 employment figure for NAICS 3254 is 294,147)Sources: Milken Institute, Economy.com, BLS.

Pharmaceutical and Medicine Manufacturing (NAICS 3254) Overview




42

Employment LQ(US=1)

Real Output LQ

(US=1)


(US$ '96, Thous.)

Wage PerEmployee

(US$, Thous.)Abbr. State 1983 1993 2003 '83-'93 '93-'03 83-'03 2003 1983 1993 2003 '83-'93 '93-'03 '83-'03 2003 2003 2003AK Alaska 0.053 0.039 0.082 -27.0% 110.1% 53.4% 0.19 6.0 2.2 3.7 -63.6% 72.4% -37.2% 0.16 45.7 38.7AL Alabama 0.401 0.821 1.002 104.9% 22.1% 150.2% 0.56 25.8 49.9 56.7 93.6% 13.5% 119.7% 0.56 56.5 46.6AR Arkansas 0.142 0.199 0.300 39.9% 50.7% 110.8% 0.29 8.0 10.1 8.8 25.3% -12.3% 9.8% 0.15 29.5 20.8AZ Arizona 0.124 0.309 0.531 150.3% 71.6% 329.5% 0.21 6.3 17.5 18.7 177.9% 7.0% 197.3% 0.13 35.3 35.1CA California 15.785 20.696 31.187 31.1% 50.7% 97.6% 2.39 926.0 1588.1 2179.9 71.5% 37.3% 135.4% 1.92 69.9 51.4CO Colorado 0.923 1.620 1.811 75.5% 11.8% 96.3% 1.21 54.5 103.3 126.1 89.3% 22.1% 131.3% 0.92 69.6 50.0CT Connecticut 0.315 0.634 0.857 101.0% 35.3% 171.9% 0.43 25.7 51.3 103.2 100.1% 101.0% 302.2% 0.75 120.4 66.9DC District of Columbia 1.273 2.068 2.738 62.4% 32.4% 115.1% 3.67 66.0 112.3 173.5 70.0% 54.5% 162.7% 3.28 63.4 60.9DE Delaware 0.061 0.111 0.057 81.4% -48.3% -6.3% 0.41 1.6 1.8 2.0 11.1% 10.8% 23.0% 0.06 34.6 21.4FL Florida 0.496 1.222 1.949 146.2% 59.5% 292.6% 0.28 25.3 56.6 88.0 123.4% 55.5% 247.5% 0.21 45.2 39.3GA Georgia 0.228 0.662 0.906 190.9% 36.8% 298.1% 0.25 13.3 44.3 72.9 233.4% 64.8% 449.3% 0.30 80.5 55.1HI Hawaii 0.112 0.179 0.221 59.5% 23.5% 97.0% 0.43 5.0 10.1 11.4 103.3% 12.5% 128.7% 0.31 51.5 45.4IA Iowa 0.138 0.203 0.215 47.7% 5.6% 56.1% 0.20 8.0 11.5 9.6 44.3% -16.5% 20.4% 0.12 44.8 30.6ID Idaho 0.008 0.016 0.017 106.7% 10.4% 128.3% 0.04 0.4 0.9 0.8 118.2% -11.1% 93.9% 0.02 47.9 43.4IL Illinois 0.983 1.383 1.878 40.7% 35.8% 91.1% 0.33 49.9 79.4 108.1 59.2% 36.2% 116.7% 0.27 57.6 37.2IN Indiana 0.608 1.038 1.159 70.7% 11.6% 90.5% 0.49 32.4 64.9 117.2 100.3% 80.5% 261.6% 0.73 101.2 48.6KS Kansas 0.264 0.384 0.390 45.3% 1.5% 47.5% 0.44 11.6 17.5 16.9 51.1% -3.4% 45.9% 0.24 43.3 31.8KY Kentucky 0.370 0.535 0.675 44.6% 26.2% 82.4% 0.48 23.1 34.7 38.5 50.0% 10.8% 66.2% 0.39 57.0 34.7LA Louisiana 0.211 0.285 0.382 34.8% 34.1% 80.8% 0.20 17.8 26.9 23.9 51.1% -11.2% 34.1% 0.21 62.5 45.3MA Massachusetts 3.221 7.385 12.895 129.3% 74.6% 300.4% 2.88 183.5 508.3 852.4 177.1% 67.7% 364.6% 3.65 66.1 50.3MD Maryland 2.828 3.907 6.319 38.1% 61.8% 123.5% 2.26 133.6 255.2 429.5 91.0% 68.3% 221.4% 2.64 68.0 49.4ME Maine 0.164 0.495 0.832 202.2% 68.1% 408.0% 0.97 6.9 26.5 49.0 281.9% 84.9% 606.3% 1.61 58.9 44.7MI Michigan 0.431 0.627 0.675 45.5% 7.6% 56.6% 0.19 30.0 37.6 49.6 25.4% 31.9% 65.4% 0.19 73.5 43.2MN Minnesota 0.622 0.861 1.278 38.4% 48.5% 105.5% 0.60 29.6 48.3 97.1 63.2% 101.0% 228.0% 0.62 76.0 38.4MO Missouri 0.449 0.772 1.014 71.7% 31.4% 125.7% 0.37 24.8 50.8 57.6 105.3% 13.2% 132.4% 0.38 56.8 34.2MS Mississippi 0.106 0.169 0.229 60.0% 35.0% 116.0% 0.18 7.6 9.2 9.1 22.1% -0.9% 21.0% 0.16 40.0 31.5MT Montana 0.127 0.235 0.464 85.1% 97.2% 265.1% 0.82 9.4 13.8 17.2 47.3% 24.2% 82.9% 0.91 37.0 27.1NC North Carolina 1.541 3.104 4.506 101.4% 45.2% 192.4% 1.14 100.9 284.8 362.6 182.2% 27.3% 259.2% 1.66 80.5 59.5ND North Dakota 0.006 0.009 0.018 46.4% 100.7% 193.9% 0.04 0.3 0.4 0.5 8.1% 34.1% 45.0% 0.03 28.1 19.4NE Nebraska 0.027 0.036 0.064 36.7% 76.7% 141.5% 0.06 1.3 1.7 2.8 33.1% 63.8% 118.0% 0.06 43.3 25.9NH New Hampshire 0.060 0.142 0.209 134.9% 47.3% 246.1% 0.32 3.0 10.4 17.0 247.9% 62.6% 465.5% 0.42 81.3 60.5NJ New Jersey 4.316 6.276 6.376 45.4% 1.6% 47.7% 2.23 291.9 535.3 631.0 83.4% 17.9% 116.2% 2.07 99.0 75.0NM New Mexico 0.348 0.534 0.713 53.3% 33.5% 104.6% 1.30 18.2 31.6 28.6 73.4% -9.4% 57.0% 0.55 40.1 42.5NV Nevada 0.130 0.147 0.133 13.3% -9.7% 2.3% 0.42 8.6 10.7 7.2 24.8% -32.5% -15.7% 0.11 54.3 53.9NY New York 7.319 10.921 15.443 49.2% 41.4% 111.0% 1.59 484.6 748.7 792.0 54.5% 5.8% 63.4% 1.15 51.3 33.3OH Ohio 1.305 1.309 1.543 0.3% 17.9% 18.3% 0.37 101.8 99.4 132.5 -2.3% 33.2% 30.2% 0.43 85.8 60.9OK Oklahoma 0.117 0.176 0.236 50.0% 34.3% 101.5% 0.19 6.1 11.1 9.6 82.5% -12.9% 59.0% 0.13 40.8 35.8OR Oregon 0.141 0.486 0.632 245.6% 29.9% 348.8% 0.40 6.8 22.5 41.2 232.2% 83.4% 509.3% 0.38 65.2 30.4PA Pennsylvania 2.286 5.175 7.707 126.4% 48.9% 237.1% 1.26 132.1 394.2 609.8 198.3% 54.7% 361.5% 1.80 79.1 53.6RI Rhode Island 0.359 0.419 0.655 16.8% 56.3% 82.5% 1.47 17.3 26.1 40.9 50.4% 56.7% 135.7% 1.33 62.4 57.7SC South Carolina 0.072 0.137 0.165 90.7% 20.2% 129.3% 0.12 4.5 10.2 10.5 126.0% 3.7% 134.2% 0.11 64.0 48.0SD South Dakota 0.002 0.008 0.015 250.9% 76.4% 519.1% 0.03 0.1 0.5 0.9 578.1% 70.4% 1055.2% 0.04 59.6 23.5TN Tennessee 0.324 0.602 0.579 85.7% -3.8% 78.6% 0.30 23.5 38.6 29.0 64.2% -25.0% 23.2% 0.19 50.0 44.9TX Texas 1.850 3.526 4.375 90.6% 24.1% 136.5% 0.59 118.9 246.9 381.5 107.7% 54.5% 220.8% 0.61 87.2 56.1UT Utah 0.429 0.592 0.828 37.9% 40.0% 93.0% 0.96 17.8 23.1 38.9 30.2% 68.0% 118.9% 0.68 46.9 35.1VA Virginia 0.592 1.351 1.911 128.1% 41.5% 222.8% 0.50 47.1 121.3 153.1 157.5% 26.2% 225.1% 0.70 80.1 53.4VT Vermont 0.008 0.025 0.031 201.3% 24.4% 274.8% 0.08 0.4 1.6 2.5 317.1% 55.1% 546.7% 0.16 82.5 50.5WA Washington 1.556 4.629 6.245 197.5% 34.9% 301.4% 1.81 124.2 427.9 304.5 244.4% -28.8% 145.1% 1.67 48.8 35.3WI Wisconsin 0.722 1.234 1.454 70.9% 17.8% 101.3% 0.66 35.0 57.6 64.3 64.5% 11.6% 83.6% 0.43 44.2 27.0WV W Virginia 0.209 0.262 0.466 25.0% 78.0% 122.5% 0.49 25.6 24.3 24.7 -5.0% 1.9% -3.3% 0.71 53.2 39.4WY Wyoming 0.003 0.008 0.024 204.6% 216.9% 865.3% 0.03 0.3 0.6 1.4 117.1% 148.1% 438.6% 0.08 58.8 46.3

US United States* 54.165 87.961 124.391 62.4% 41.4% 129.7% 1.00 3302.3 6362.5 8408.4 92.7% 32.2% 154.6% 1.00 67.6 52.5*United States figures are based on the sum of all state and D.C. totalsSources: Milken Institute, Economy.com, BLS.

R&D in the Life Sciences (NAICS5417102) Overview




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Multiplier and Tax Impacts Analysis

The importance of the biopharmaceutical industry in the nation goes beyond the number of jobs it creates, people it employs or the direct contribution it makes to GDP. Multiplicative values, known as “multipliers,” quantify how employment, earnings and output generated by the biopharmaceutical industry in a region, ripple through and impact other regional economic sectors. In addition to providing numerical data on an industry’s regional impact, economic multipliers also bring to light region-wide interdependencies and interindustry relationships. It is important to appreciate these relationships because they directly influence how regional economies respond to changes in long-term industry structure and business cycles. Within the concept of multiplier impacts, three key forces are at play. The first is what is known as the direct impact, which measures how an industry’s employment, wages and output immediately translate into economic stimulus for other sectors of the economy that support the industry (for example, suppliers of legal, financial and advertising services).

The second multiplier force relates to the indirect impact. This represents a further extension of stimulus, the sort given to tertiary economic activity that, although not directly interacting with the studied industry, nevertheless is supported by it through a region’s overarching economic framework. An example of an indirect impact of the biopharmaceutical industry is the wholesale and retail distribution of drug products in the region. The cumulative employment and wages generated by all of this tightly and extensively interconnected economic activity ripples throughout the regional economy. The wealth created leads to greater purchases of goods and services. This, in turn, produces still more income that becomes available to a region’s residents who recycle their earnings back into their local economies.

The net result of this latter process is known as the induced impact. For example, in addition to the consumer spending by chemists, microbiologists, biotech researchers and pharmacists, spending by restaurant workers, retail clerks, real estate agents, contractors and many others indirectly dependent upon the industry, is also accounted for in this measure. It is through the aggregation of these three individual impacts that the total impact of a given industry on its local economy is measured.

The following section describes the multiplier effects and tax impacts of the biopharmaceutical industry on each state’s economic activity, state by state in alphabetical order. The direct and indirect impact of the biopharmaceutical industry is depicted in each state’s description as a pie chart. Each figure displays how the biopharmaceutical industry empowers the state’s industrial activity such as manufacturing, services, construction and others. For example, the biopharmaceutical industry can generate the greatest impact on the manufacturing sector in one state, but on the professional and scientific services sector in another, depending upon their industrial structures and economic conditions. The distribution of economic activity generated by the biopharmaceutical industry is a helpful indicator of the soundness of a state’s biopharmaceutical industry and a measure by which to predict its future growth in the state.

Multiplier and Tax Impacts AnalysisIV.

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Economic Impact MethodologyThe Regional Input-Output Modeling System (RIMS II) developed by the Bureau of Economic Analysis (BEA) at the U.S. Department of Commerce was used to conduct the systematic economic multiplier impact analysis. This methodology uses the input-output structure of U.S. industries to estimate the total impact one industry has on the wider economy.

The employment, earnings and output tax multipliers from RIMS are applied to the appropriate employment, output, earnings and personal income tax estimates from the Bureau of Labor Statistics (BLS) and Economy.com, respectively. The input-output matrix from RIMS provides the necessary coefficients or multipliers needed to estimate the total number of jobs and value of wealth generated in all other sectors through the biopharmaceutical industry. Thus, the total impact is calculated by applying the appropriate multiplier to the direct impact for either employment, earnings, output or taxes. Further statistical estimation is conducted to derive the difference between the induced and indirect shares.

The employment, earnings and tax multipliers are based on a direct-effect concept. In other words, these multipliers quantify how biopharmaceutical employment and earnings directly impact employment and earnings across all industries as well as industrial personal taxes to government. More specifically, the direct-effect employment multiplier measures the change in the number of jobs in all industries that results from a change of one job in the biopharmaceutical industry. In a similar fashion, the direct-effect earnings multiplier calculates the total dollar change in the earnings of households employed by all industries that results from a $1 change in earnings paid directly to households employed by the biopharmaceutical industry. Finally, the output multiplier is based on a final-demand concept. It measures the total dollar change in output in all industries that results from a $1 change in output delivered to final demand by the biopharmaceutical industry.

Multipliers for the biopharmaceutical industry are available for each state, the District of Columbia, and the nation. One important distinction here is that the multiplier for the sum of the states (which can be derived implicitly) is not necessarily equal to the multiplier for the U.S. The discrepancy between the two multipliers stems from a leakage effect. In other words, there is some leakage or spillover beyond each state to the other 49 states (for example, from New Jersey to Pennsylvania or vice versa). The U.S. multiplier adjusts for this phenomenon by accounting for all impacts nationwide, and as a result, ends up with a higher multiplier than the sum of states.

The BEA multipliers are based on the 1997 national benchmark input-output (I-O) accounts while incorporating 2001 regional data as defined by North American Industry Classification (NAICS) system. Further documentation of the NAICS classification is provided by the Office of Management and Budget.

Taxation MethodologyOur purpose in computing the tax figure is to measure the macroeconomic impact of the biopharmaceutical industry’s tax contribution to state, local and federal governments. The complexity in determining the industry’s impact on taxes demands a multi-pronged empirical strategy. From a statistical analysis of a number of secondary sources of information, we have collected, calculated, analyzed and interpreted data to determine the financial influence of the industry on each state’s


45

treasury and the overall federal government’s coffers. The Milken Institute has analyzed three major tax categories: business income taxes, personal income taxes and sales taxes from biopharmaceutical products, production and industry wage income. The results are presented in detailed tables by state.

Business Income TaxesTaxes on business income include corporate federal and state taxes paid by companies in the biopharmaceutical industry. Two major data sets are utilized – Dun & Bradstreet and Standard & Poors – to understand the operational and financial information of companies in the industry. Corporate taxes are calculated by applying tax rate schedules for each state, the District of Columbia and the U.S. The business income tax rate data is compiled from information contained in the U.S. Department of Treasury, Internal Revenue Service Statistics of Income Corporate Source Book, the Economy.com data base, the U.S. Census Bureau and each individual state’s Department of Revenue.

Personal Income TaxesPersonal income taxes are computed by utilizing public data sources including the Bureau of Economic Analysis (BEA) and the Bureau of Labor Statistics’ wage income by major occupation and employment wage income tables. The industry aggregate wage income is the product of the number of payrolls and the average annual wage income of the industry. The taxable income applied in this computation does not include income from capital gains, stock awards and annual bonus receipts. State personal income tax is calculated based on each state’s average personal income tax rate. Exemptions and write-offs are not considered in the estimation.

Sales TaxesFor the purpose of this analysis, we focus on the sales taxes collected from the sale of biopharmaceutical products. In almost all states, sales taxes are not levied on prescription drugs. This sales tax exemption extends, in some states, to nonprescription drugs and other consumer products as well.1 Sales tax revenues are calculated from the annual survey of the distribution of household purchases reported in Consumer Expenditure Survey (CES) by the Bureau of Economic Analysis. Because detailed CES consumption data is available at the regional level (i.e., Northeast, Midwest, South and West) only, weighted calculations are made using annual estimate data from the U.S. Census Bureau, Population Division. Each state’s individual sales tax rate in 2003, by biopharmaceutical product category, is applied.

Limitations of the DataIt is extremely difficult to determine the exact extent of the activity of the large and dynamic biopharmaceutical industry in the United States. There are measurement difficulties associated with state comparisons, including the use of historical book value accounting that may underestimate some long-term investments made many years earlier. Indeed, with the cost of new machinery and equipment coming down in the last few years owing to advances in technology, lower tariffs and higher levels of competition, historical book value is an adequate indicator of future earnings potential.

Given the differences in firms’ accounting fiscal year ends, international currency exchange rate fluctuations, the merger and acquisition activity that continues in the biopharmaceutical industry, and


1 Products subject to the sales tax include over-the-counter pharmaceutical-related products, vitamins and other nutritional products.

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the differences among regions and counties within the U.S. in the concepts and methodologies used in collecting and computing taxes, exact information is difficult to capture. Statistically-based location analysis assumes that recorded locations in the industry databases used, reflect the state location for tax rate applications. Another notable issue in collecting firm-level income statistics lies in the fact that many of the new biotech entrants are privately owned; public disclosure of company financial information is not required and therefore, seldom provided. Hence, we are unable to determine, to the full extent, how this nondisclosure might impact our corporate income and tax contribution statistics at the state and federal levels.

Precise figures to track micro-level taxes paid and collected are unobtainable due to the constant and fluid motion of business – firms enter and exit a geographic area continuously. In addition, to the extent that many companies in the biopharmaceutical industry are multinational enterprises, the nature and extent of a company’s involvement in an area are subject to constant fluctuation and change, the frequency of which is magnified in intra-country analysis. The statistical gathering or collection restrictions force a caveat to all interpretation. However, while the depth, scope and accuracy are somewhat limited by the methodology issues identified, the available data provide a clear picture of the development and tremendous impact of the biopharmaceutical industry in the United States. Overall, the biopharmaceutical industry generated $174 billion in total economic activity and $32 billion in taxes nationwide.

United StatesAs shown in the table below, the direct employment of 406,700 American workers in the biopharmaceutical industry in 2003 contributed substantially to the U.S. economy in terms of earnings ($29.5 billion) and real output – $63.9 billion, based on inflation-adjusted 1996 dollars. In addition to the direct impacts of the biopharmaceutical industry, the industry generated jobs, earnings, revenues and taxes through a number of indirect and induced impacts. Biopharmaceutical companies directly employed 406,700 workers, but with an employment multiplier of 6.7, their economic activity generated an additional 2.3 million jobs. Similarly, while biopharmaceutical companies directly produced $63.9 billion in real output and $29.5 billion in earnings, their total impact on real output and earnings in the U.S. economy accumulated to $172.7 billion and $115.1 billion, respectively. Taking a long view reveals that after incorporating the multiplier impacts, the biopharmaceutical industry accounted for 2.1 percent of total nonfarm employment and 1.7 percent of total real output.

Personal income tax receipts (including state, local and federal) attributable to the biopharmaceutical industry accounted for $24.5 billion, while the nation’s total sales tax revenues generated from sales of biopharmaceutical products and related consumer purchases amounted to $985.6 million. Corporate income taxes paid by biopharmaceutical companies totaled $6.4 billion. This added up to a total (including state, local and federal tax revenues) of $31.9 billion in biopharmaceutical-related tax revenues.

Concept (2003 Figures) MultiplierTotal

ImpactDirectImpact

Indirect Impact

Induced Impact

Employment (Thous.) 6.7 2724.8 406.7 1351.8 966.3Earnings (US$ Mil.) 3.9 115089.6 29510.1 54264.7 31314.8Real Output (US$ 96, Mil.) 2.7 172710.1 63966.7 67798.5 40944.9Tax Total (US$ Mil.) - 31891.6 - - - Federal (US$ Mil.) - 24432.6 - - - State & Local (US$ Mil.) - 7459.0 - - -Sources: Milken Institute, Economy.com, BLS, BEA, Tax Foundation.

While the bulk of direct and indirect impacts are captured within the manufacturing sector (50.5 percent), the biopharmaceutical industry also provided considerable economic stimuli for the professional and scientific services sector and other services sector.

United States - 2003 Economic Activity Generated by Biopharmaceutical Industry

Agric. & Mining1.6% Utilities

1.4%

Transportation & Warehousing

2.5%

Management of Companies

4.0%

Information3.3%

Retail Trade2.8%

Wholesale Trade3.8%

Real Estate 6.7%

Finance & Insurance4.3%

Professional & Scientific Srv.

9.2%

Other Srv.9.5%

Construction0.4%

MFG50.5%

Sources: Milken Institute, Economy.com, BLS, BEA.


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AlabamaAlabama’s biopharmaceutical industry is responsible for a total of 3,700 jobs in the state. Of these, 1,400 workers are employed directly by the industry, while 2,300 jobs are generated through indirect and induced impacts. The $64.2 million that the biopharmaceutical industry produced in direct earnings in Alabama generated an additional $53.3 million in earnings in all other sectors of the state’s economy. Similarly, the $96.8 million that the biopharmaceutical industry directly generated toward real output, created an additional $86.1 million in real output elsewhere in Alabama.

In terms of personal income tax receipts, Alabama’s biopharmaceutical industry contributed $5.9 million in state and local tax revenues to Alabama’s state government and an additional $29.4 million to federal government. In addition, tax receipts were generated from the state’s biopharmaceutical product sales and related consumer purchases in the amount of $4.11 million, while biopharmaceutical corporations generated $38.0 million in corporate income tax receipts. These biopharmaceutical-related tax revenues combined totaled $77.4 million.

Alabama table, pg. 153


ImpactDirect Impact

Indirect Impact

Induced Impact


The following pie chart shows how important Alabama’s biopharmaceutical industry has become in terms of creating economic activity among its basic industry sectors. There are two distinct industry sectors – professional and scientific services, and manufacturing – that benefit the most from the state’s biopharmaceutical industry.

Alabama pie chart, pg. 153

Alabama - 2003 Economic Activity Generated by Biopharmaceutical IndustryManagement of

Companies 0.9% Agric. & Mining

0.7%

Utilities1.6%


Information2.4% Transportation &

Warehousing1.8%Wholesale Trade

3.2%

Real Estate 5.6%

Retail Trade3.6%

Other Srv.10.6%

MFG31.7%

Construction0.5%


34.1%



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AlaskaAlaska’s employment base in the biopharmaceutical industry has yet to be established. The small number of workers employed directly – 85 – generated an additional 60 jobs in the state. Of these, 10 were created through the indirect impact effect while 50 were created from induced impacts. Biopharmaceutical earnings in Alaska totaled $4.9 million. Total real output in the state in 2003 amounted to $7.1 million. The additional earnings and real output generated through the industry’s indirect and induced multiplier effects consisted of $1.6 million and $3.0 million, respectively.

Federal, local and state governments received additional tax revenues from the economic activity generated by the state’s biopharmaceutical industry in the total amount of $6.1 million. In terms of personal income tax revenues (including state, local and federal), Alaska’s biopharmaceutical industry contributed $1.2 million to the government. Alaska Table pg 154


ImpactDirect Impact

Indirect Impact

Induced Impact


An often overlooked aspect of the biopharmaceutical industry is its ability to create economic activity among the state’s various industry sectors. The following chart demonstrates the direct and indirect impact of Alaska’s biopharmaceutical industry on the state’s economy across industry sectors. This portrait of the state’s industry sectors indicates that professional and scientific science services highly benefit from the biopharmaceutical industry. Alaska pie chart, pg 154

Alaska - 2003 Economic Activity Generated by Biopharmaceutical IndustryAgric. & Mining

0.8%Management of

Companies 0.7%

Wholesale Trade1.2%

Information2.7%


2.3%Utilities

1.7%


MFG7.2%

Retail Trade4.3%

Real Estate 8.0%

Other Srv.12.6%

Construction0.6%


55.3%



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ArizonaArizona’s biopharmaceutical industry is responsible for 3,300 workers in the state when including the multiplier impacts. Of these, 1,200 are employed directly in the industry, while 2,100 jobs are generated throughout the state’s economy via indirect and induced impacts. The employment multiplier for Arizona is 2.8; for each job created by the biopharmaceutical industry in the state, an additional 1.8 jobs are created in other sectors of Arizona’s economy. The biopharmaceutical industry is also responsible for $138.2 million in direct earnings, of which $75.7 million are produced as a result of the indirect and induced impacts. So, for each dollar earned by households employed directly in the biopharmaceutical industry, an additional $1.20 is generated in earnings of households in all other industries in Arizona’s economy (since earnings multiplier = 2.2). With respect to real output, biopharmaceuticals directly contributed $151.8 million toward real output in Arizona in 2003, which resulted in an additional $108 million in real output in other sectors.

Arizona’s biopharmaceutical industry accounts for $38.9 million of total personal income tax revenues (including state, local and federal), while total sales tax revenues generated from sales of the state’s biopharmaceutical products and related consumer purchases totaled $10.12 million. In addition, the state’s biopharmaceutical companies recorded $29.6 million in corporate income tax revenues. These biopharmaceutical-related tax revenues accounted for a total of $78.6 million.

Arizona table, pg 155


ImpactDirect Impact

Indirect Impact

Induced Impact


Arizona’s biopharmaceutical industry has economically valuable implications and spillover effects for other industry sectors. As the following pie chart reveals, most of the economic activity is captured by related manufacturing categories. Professional and scientific services account for 10.5 percent of the industry’s contribution.

Arizona pie chart, pg 155

Arizona - 2003 Economic Activity Generated by Biopharmaceutical IndustryUtilities

1.2%Agric. & Mining

0.4%


1.9%


2.7%

Retail Trade2.6%

Information2.3%Finance & Insurance

2.7%

Real Estate6.8%

Wholesale Trade3.9%

Other Srv.8.4% Professional &

Scientific Srv.10.5%

Construction0.4%

MFG56.4%



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ArkansasArkansas has a relatively low employment base in the biopharmaceutical industry. Its 366 direct employees generated an additional 359 jobs in all other industries. Arkansas’ employment multiplier is 2.0, thus each biopharmaceutical job created one job in another sector of the state’s economy. The biopharmaceutical industry’s direct earnings of $9 million generated an additional $7.4 million. Real output contribution derived from biopharmaceuticals totaled over $25 million in 2003, $14 million of which is directly attributable to the industry, with an additional $11.2 million produced as a result of the indirect and induced effects.

A detailed analysis of the personal income tax revenues reveals that Arkansas’ biopharmaceutical industry generates $4.3 million in total personal income tax revenues (including state, local and federal). An additional $2.1 million is derived from total sales tax revenues generated from sales of the state’s biopharmaceutical products and related consumer purchases. Moreover, Arkansas’ biopharmaceutical companies contribute $7.1 million in corporate income taxes to the state. These biopharmaceutical-related tax revenue components add up to $13.5 million.

Arkansas, pg 156


ImpactDirect Impact

Indirect Impact

Induced Impact


There is great variation among the state’s industry sectors that benefit from Arkansas’ biopharmaceutical industry. The pie chart below shows that the state’s manufacturing and professional and scientific services sectors capture most of the direct and indirect contributions. Finally, other services comprise 10.4 percent of the industry’s direct and indirect impacts.

Arkansas pie chart, pg 156

Arkansas - 2003 Economic Activity Generated by Biopharmaceutical Industry


37.0%

Construction0.5%

MFG29.2%

Other Srv.10.4%

Retail Trade3.5%

Real Estate 5.3%


Information2.0%


2.6%

Wholesale Trade2.9%


1.9% Agric. & Mining0.6%

Utilities1.6%



52

CaliforniaThe biopharmaceutical industry employment multiplier in California is 4.5, that is, each job created within the industry generates an additional 3.5 jobs in other sectors of the state’s economy. The biopharmaceutical industries directly employ 70,000 people with an additional 247,212 jobs produced as a result of the indirect and induced impacts of the industry. In terms of earnings, the biopharmaceutical industry in California directly accounts for close to $5.2 billion. It creates an additional $9.9 billion in earnings within the state, but outside the sector. The indirect and induced impacts add significant value to California’s overall wealth and provide a huge boost to the state’s economy. California’s biopharmaceutical industry was responsible for a total of close to $21.2 billion in real output in 2003. Of this amount, more than $9.6 billion in real output is created directly by the industry, while $6.3 billion and $5.3 billion are generated via the indirect and induced impacts, respectively.

With respect to personal income tax revenues, California’s biopharmaceutical industry contributes heavily to the state and local governments ($1.4 billion) as well as the federal government ($3.8 billion). An additional $406.2 million in total sales tax receipts were generated from the state’s biopharmaceutical product sales and related consumer purchases, while its biopharmaceutical companies recorded $1.3 billion in corporate income tax revenues. Total biopharmaceutical-related tax revenues add up to $6.8 billion.


ImpactDirect Impact

Indirect Impact

Induced Impact


While the bulk of direct and indirect impacts are captured within the manufacturing industry, other sectors also benefit significantly, namely professional and scientific services, real estate, information services, management of companies and enterprises, and wholesale and retail trade.

Utilities0.8% Agric. & Mining

0.5%


1.9%


Information3.1%

Retail Trade2.8%Wholesale Trade

3.4%

Real Estate6.9%


4.0%

Other Srv.8.8%


14.8%

Construction0.4%

MFG49.2%


California - 2003 Economic Activity Generated by Biopharmaceutical Industry


53

ColoradoIn 2003, the biopharmaceutical industry in Colorado directly employed about 5,200 workers, who earned close to $216 million and produced some $459 million worth of real output for the state. By the multiplier impacts, these direct impacts generated another 14,500 jobs, over $305 million in earnings and $450.6 million in real output beyond the industry. Colorado’s employment multiplier is 3.8, thus the state’s biopharmaceutical industry produces an additional 2.8 jobs in other sectors throughout its economy. The $216 million produced in industry earnings creates another $305 million in earnings in other sectors within the state of Colorado.

The state’s biopharmaceutical industry contributed $118.1 million in personal income tax revenues (including state, local and federal). Total sales tax revenues generated from the state’s biopharmaceutical product sales and related consumer purchases amount to $4.0 million. The statistics for corporate income tax revenues show that Colorado’s biopharmaceutical companies generated $29.5 million. In sum, total biopharmaceutical-related tax revenues amounted to $151.6 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The pie chart below shows the impact of Colorado’s biopharmaceutical industry on the state’s main industry sectors. Manufacturing, along with professional and scientific services, captured the largest contribution (both direct and indirect) in terms of economic activity.

MFG44.7%

Construction0.4%


18.1%

Other Srv.9.4%


Real Estate 7.1%

Information3.2%

Management of Companies & enterprises

2.7%

Retail Trade2.9%

Wholesale Trade3.6%



Utilities1.1%


Colorado - 2003 Economic Activity Generated by Biopharmaceutical Industry


54

ConnecticutConnecticut’s biopharmaceutical industry directly employed 9,900 workers and produced more than $1.8 billion worth of real output in the state. When the full extent of the multiplicative dynamics are accounted for, the industry is responsible for a total of 50,800 jobs and $3.7 billion of real output in the state. The employment multiplier in Connecticut is 5.1, the sixth largest in the nation. Each additional job in the biopharmaceutical industry in the state produces an additional 4.1 jobs in other sectors of Connecticut’s economy. The industry accounted for close to $1.2 billion in earnings directly, while spreading another $2.4 billion into other sectors of the state’s economy. Connecticut’s earnings multiplier, 3.0, is the fourth largest in the nation meaning that for each dollar earned by households employed directly in the biopharmaceutical industry, an additional $2.00 is generated in household earnings in all other industries in the state.

Total personal income tax revenues (including state, local and federal) generated by Connecticut’s biopharmaceutical industry was $1.2 billion in 2003. The total sales tax revenues generated from the state’s biopharmaceutical product sales and related consumer purchases ($2.9 million), and corporate income tax revenues derived from the state’s biopharmaceutical companies ($128.6 million) resulted in significant financial tax collections for the government. Total biopharmaceutical-related tax revenues add up to $1.3 billion.


ImpactDirect Impact

Indirect Impact

Induced Impact


The ripple effect of Connecticut’s biopharmaceutical industry can be seen across the state’s basic industry sectors. As the pie chart below indicates, the manufacturing sector benefits the most from the biopharmaceutical industry, comprising a 62.2 percent share of the impact (direct and indirect). Real estate and management of companies and enterprises are also indirectly affected, as jobs get added to those industries and economic activity is fostered throughout the state.

Connecticut - 2003 Economic Activity Generated by Biopharmaceutical Industry


1.1% Construction0.2%

Utilities1.1%

Wholesale Trade3.8%

Information2.2%

Retail Trade2.0%Finance & Insurance

3.4%

Real Estate &5.8%


4.9%


Scientific Srv.6.6%

Agric. & Mining0.2%

MFG62.2%



55


DelawareWith an employment multiplier of 4.3, each job created in the biopharmaceutical industry in Delaware creates an additional 3.3 jobs in other sectors of the state’s economy meaning that Delaware’s 900 industry employees account for about 2,900 jobs produced elsewhere in the state. Altogether, the industry was responsible for a total of 3,800 jobs in the state in 2003. Biopharmaceutical earnings in Delaware totaled $233 million in 2003. The industry generated about $86 million itself, with close to $147 million in additional earnings generated throughout the state. The $87.8 million the industry directly contributed to Delaware’s real output resulted in an additional $62.5 million worth of real output from other sectors of the state’s economy for a total impact of $150.2 million.

A large component of the tax revenues generated by Delaware’s biopharmaceutical industry are personal income tax revenues, with $8.5 million going to the state and local government and $38.3 million going to federal government. Total biopharmaceutical-related tax revenues, including personal income tax, sales tax and corporate income tax revenues, amounted to $130.2 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The following pie chart identifies the economic impact that Delaware’s biopharmaceutical industry has on the state’s economy through its own economic activity. It illustrates that manufacturing, other services and professional and technical services comprise the bulk of the direct and indirect impacts. Professional and scientific services are considerably less impacted by the state’s biopharmaceutical industry.

Delaware - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.0%

Construction0.3%


1.2%Wholesale Trade

2.9%

Retail Trade1.7%

Information1.3%



4.6%

Real Estate 3.3%


5.4%

Other Srv.5.5%

Agric. & Mining0.2%

MFG69.7%


56

District of ColumbiaThe District of Columbia’s biopharmaceutical industry is accountable for 4,300 jobs in 2003. Of these, 2,800 people are employed directly by the industry, while 1,500 jobs are generated through the indirect and induced impacts. Earnings directly attributable to the industry in 2003 are $175 million. An additional $50 million in earnings are generated in the district through the industry’s indirect and induced multiplier effects for total earnings of $225 million. The industry is responsible for a total of $242.6 million to the state’s real output, $182.7 million directly and $59.9 million via the indirect and induced impacts.

The biopharmaceutical industry produced $92.0 million in personal income tax revenues (including state, local and federal) in 2003. Of these, $24.8 million were contributed directly to the state and local government, while the remaining $67.2 million were contributed to the federal government. In sum, total biopharmaceutical-related tax revenues, including personal income tax revenues, sales tax revenues and corporate income tax revenues, amounted to $103.3 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The pie chart below summarizes the direct and indirect impacts that the biopharmaceutical industry brings to the rest of the District of Columbia’s economy in terms of economic activity. Clearly, the biopharmaceutical industry can be recognized as playing an important role in creating jobs and generating economic activity in professional and scientific services. At the same time, the biopharmaceutical industry provides considerably less economic stimuli to the district’s manufacturing sector.


76.5%

Agric. & Mining0.0%

Other Srv.6.6%

MFG5.5%

Information2.3%

Real Estate 4.8%


0.8%


0.4%

Utilities0.5%


Retail Trade0.3%

Construction0.2%

Wholesale Trade0.3%


District of Columbia - 2003 Economic Activity Generated by Biopharmaceutical Industry


57

FloridaIn 2003, the biopharmaceutical industry in Florida employed 6,500 workers who earned $364.3 million and produced $911.2 million worth of real output for the state. These figures represent only the direct impacts of the biopharmaceutical industry on the state’s economy. With the full extent of multiplicative dynamics accounted for, the biopharmaceutical industry was responsible for a total of 21,800 jobs, $848.3 million in earnings and an estimated $1.6 billion worth of real output in the state.

With respect to tax revenues derived from the state’s biopharmaceutical industry collected by federal, local and state governments, the table below reflects that $212.1 million in total personal income tax revenues (including state, local and federal) went to the government. No less significant, tax revenues generated from sales of the state’s biopharmaceutical products and related consumer purchases amounted to $33.2 million, while biopharmaceutical companies produced $153.4 million in corporate income tax revenues. These biopharmaceutical-related tax revenues totaled $398.7 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The biopharmaceutical industry is an important part of Florida’s economy. The following pie chart displays the impact (direct and indirect) of the state’s biopharmaceutical industry on Florida’s economy, which differs by industry sector. Most importantly, manufacturing captures the largest contribution in terms of economic activity.

Florida - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.1%

Construction0.3%


1.7%


Information2.7%

Retail Trade2.5%


2.7%

Real Estate 6.4%

Wholesale Trade3.6%

Other Srv.8.1%


9.1%

Agric. & Mining0.3%

MFG58.4%



58

GeorgiaGeorgia’s employment multiplier is 4.4. Therefore, an additional 13,400 jobs were created by the biopharmaceutical industry in the state of Georgia in 2003 (indirect and induced impacts). The industry directly employed 4,000 workers for a total impact of 17,400 employees. The indirect and induced impacts of the biopharmaceutical industry generate $462.3 million in additional earnings in the state of Georgia. The sector is directly responsible for $254.9 million in earnings, while accounting for a total of $717.2 million in earnings in 2003 when incorporating the multiplier impacts. The biopharmaceutical industry is also responsible for a total of almost $1.4 billion in real output in 2003. This contribution is determined by adding the direct ($682.9 million), indirect ($375.2 million) and induced impacts ($299.7 million).

In terms of the biopharmaceutical industry’s tax contributions to the government, the table below shows a total of $222.4 million in personal income tax revenues (including state, local and federal), $12.7 million in total sales tax revenues generated from the state’s biopharmaceutical product sales and related consumer purchases, and $46.6 in corporate income tax revenues. This adds up to a total of $281.7 billion in biopharmaceutical-related tax revenues.


ImpactDirect Impact

Indirect Impact

Induced Impact


The pie chart below takes into account the multiplier effects that occur when other industry sectors in Georgia’s economy are positively impacted by the state’s biopharmaceutical industry. Specifically, over 55.8 percent of the direct and indirect economic impacts stemming from the biopharmaceutical industry can be felt in Georgia’s manufacturing sector. Economic activity derived from the state’s biopharmaceutical industry within the state’s professional and scientific service sector is less significant.

Georgia - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.2%

Agric. & Mining0.4%


2.2%

Wholesale Trade3.9%

Information2.9%

Retail Trade2.6%


Real Estate 6.5%


4.5%

Other Srv.7.8%


8.6%

Construction0.3%

MFG55.8%



59

HawaiiHawaii is a state with a relatively low employment base in the biopharmaceutical industry. Its direct employment of 317 workers generated an additional 382 employees in all other industries in the state. Hawaii’s employment multiplier is 2.2 so each biopharmaceutical job creates 1.2 jobs in other sectors of the state’s economy for a total of 699 employees. In terms of earnings, the indirect and induced impacts contributed $11.4 million to the biopharmaceutical industry and direct earnings of $14.2 million for a total of $25.6 million in 2003. An additional $5.4 million and $13 million in real output were produced in Hawaii by indirect and induced impacts, respectively. This output, plus the $26 million direct impact that the sector generated, brought the total real output for the state to $44.5 million. The table below shows the breakdown details.

Total personal income tax revenues (including state, local and federal) derived from the state’s biopharmaceutical industry amounted to $8.5 million, while total sales tax revenues generated from the state’s biopharmaceutical product sales and related consumer purchases accounted for $0.3 million. Corporate income tax revenues amounted to $1.4 million. Total biopharmaceutical-related tax revenues added up to $10.2 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


Most of Hawaii’s biopharmaceutical industry impact is captured by the manufacturing and the professional and scientific services sectors.

Hawaii - 2003 Economic Activity Generated by Biopharmaceutical Industry

MFG35.8%

Agric. & Mining0.3%


29.0%

Other Srv.11.0%

Retail Trade3.4%

Real Estate 6.5%

Information2.8%

Wholesale Trade2.2%


2.6%



1.6% Construction0.5%

Utilities1.4%



60


IdahoIdaho’s employment base in the biopharmaceutical industry is small, just under 50 employees in 2003 (total impact). However, $1.3 million in direct, indirect and induced earnings were generated in Idaho by the industry in 2003. That sector contributed $1.1 million in direct real output, which resulted in almost an additional $1 million in real output from other sectors.Idaho’s biopharmaceutical industry generated nearly $1 million in total sales tax revenues derived from the state’s biopharmaceutical product sales and related consumer purchases. Total biopharmaceutical tax revenues (including personal income tax revenues, sales tax revenues and corporate income tax revenues) amounted to $13.3 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


Professional and scientific services, along with manufacturing and other services, captured the largest contribution (direct and indirect) in terms of economic activity. The ripple effects of this particular industry sector, especially in terms of generating economic activity, can also be seen in such diverse sectors as other services and real estate.

Idaho - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.0%

Agric. & Mining0.8%


1.8%


Information2.1%


2.0%Wholesale Trade

3.0%

Real Estate 6.4%

Retail Trade4.1%

Other Srv.12.6%

MFG18.0%

Construction0.5%


44.9%


61


IllinoisIllinois has the third largest employment multiplier in the country with respect to the biopharmaceutical industry. Almost 128,000 jobs were generated by the industry’s full multiplicative dynamics in Illinois in 2003. This contribution to the state’s employment is made up of the direct employment by the sector (21,900 jobs), the indirect employment (66,200 jobs) and the induced employment (39,400 jobs) created through the industry’s multiplier effects. When accounting for the industry’s ripple effects, biopharmaceutical earnings in Illinois amounted to $6.1 billion in 2003. The industry generated approximately $1.7 billion itself, with more than $4.4 billion in additional earnings generated throughout the state’s economy.

Illinois had the highest earnings multiplier in the country (3.6). The Illinois biopharmaceutical industry’s multiplier impacts contributed over $7.6 billion in real output in 2003. That sector’s direct real output contribution is close to $3.4 billion. Illinois had the highest output multiplier in the U.S. (2.3), leading to over $4.2 billion indirect and induced in real output throughout the state’s economy.

Given the substantial economic contributions of Illinois’ biopharmaceutical industry to the state, much attention has to be given to the fiscal contributions in the form of tax revenues collected by state, local and federal governments. In 2003, the industry produced $1.4 billion in total personal income tax revenues (including state, local and federal), while total sales tax revenues generated from sales of the state’s biopharmaceutical products and related consumer purchases amounted to $51.2 million. The state’s biopharmaceutical companies contributed $742.1 million in corporate income tax revenues. Total biopharmaceutical-related tax revenues amount to nearly $2.2 billion.


ImpactDirect Impact

Indirect Impact

Induced Impact


The following pie chart shows the impact figures (direct and indirect) stemming from the Illinois biopharmaceutical industry. Manufacturing accounted for over 60 percent of the industry’s contribution in terms of economic activity.

Illinois - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.2%

Agric. & Mining0.5%

Retail Trade2.1%

Wholesale Trade4.0%

Information2.5%


2.2%


Real Estate 5.2%


4.7%


5.8%

Other Srv.7.2%

Construction0.3%

MFG60.4%


62


IndianaIndiana’s biopharmaceutical industry is accountable for a total of 116,500 jobs in the state. Of these, 19,500 are employed directly by the industry, while 97,000 are generated throughout the rest of the state’s economy via the indirect and induced impacts. Earnings directly attributable to the industry in 2003 totaled almost $1.7 billion. Over $3 billion in additional earnings were generated through the industry’s multiplier effects for total earnings of close to $4.7 billion in 2003. When accounting for the multiplicative dynamics, Indiana’s biopharmaceutical industry contributed a total of almost $11.4 billion to the state’s real output in 2003. About half of this contribution ($5.7 billion) came directly from the biopharmaceutical industry and half through the indirect and induced impacts ($5.7 billion).

The state’s biopharmaceutical industry also generated significant tax revenues for federal, local and state governments from personal income tax revenues ($1.3 billion), sales tax revenues derived from the state’s biopharmaceutical product sales and related consumer purchases ($25.6 million) and corporate income tax revenues ($227.2 million) paid by the state’s biopharmaceutical firms. These biopharmaceutical-related tax contributions amounted to nearly $1.6 billion.


ImpactDirect Impact

Indirect Impact

Induced Impact


The pie chart on economic activity generated by Indiana’s biopharmaceutical industry revealed that this industry has a strong impact on the state’s manufacturing sector. It has a considerably smaller impact on the state’s professional and scientific services sector.

Indiana - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.1%

Agric. & Mining0.5%

Information1.4%


2.8%

Retail Trade2.3%


2.0%


Wholesale Trade3.8%


3.8%

Real Estate 4.3% Other Srv.

6.8%

Construction0.3%

MFG68.2%


63


IowaIowa’s biopharmaceutical industry was accountable for a total of almost 8,100 jobs in Iowa in 2003. Of these, more than 2,500 people were employed directly by the industry, while about 5,600 jobs were generated through the indirect and induced impacts. The $87.3 million the industry directly produced in earnings in Iowa created an additional $112.9 million in earnings in all other sectors of the state’s economy. Similarly, the biopharmaceutical industry generated $332.6 million in real output directly and created an additional $233 million in real output elsewhere in Iowa.

The following table shows personal income tax revenues, including state, local and federal of $45.7 million attributable to the state’s biopharmaceutical industry – $13.9 million in state and local tax revenues and $31.8 million in federal tax revenues. As shown, total sales tax revenues generated from the state’s biopharmaceutical product sales and related consumer purchases amounted to $4.9 million, while the state’s biopharmaceutical companies generated $13.5 million in corporate income tax revenues. Taken together, these biopharmaceutical-related tax receipts totaled $64.1 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The pie chart below portrays the direct and indirect impacts of Iowa’s biopharmaceutical industry on its economy. Among the state’s industry sectors, the manufacturing sector benefited significantly in terms of economic activity generated through Iowa’s biopharmaceutical industry.

Iowa - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.2%

Agric. & Mining0.4%


1.6%Finance & Insurance2.9%

Information2.1%


1.8%Retail Trade

2.2%

Real Estate 4.0%


3.3%

Wholesale Trade4.1% Other Srv.

6.2%

Construction0.3%

MFG70.0%


64

KansasIn 2003, the biopharmaceutical industry in Kansas directly employed some 1,500 workers, who earned close to $68.0 million and produced $187.4 million in real output for the state. Applying the multiplier impacts, these direct impacts generated another 3,100 jobs, $91.5 million in earnings and $138 million in real output in Kansas in 2003.

The federal, local and state tax revenues generated by the state’s biopharmaceutical industry in 2003 are also summarized in the following table. Total personal income taxes (including state, local and federal) accounted for $50.1 million in 2003. Total biopharmaceutical-related tax revenues derived from personal income tax revenues, sales tax revenues and corporate income tax revenues reached $67.8 million in 2003.


ImpactDirect Impact

Indirect Impact

Induced Impact


The following pie chart illustrates the economic activity generated in the state’s main industry sectors as a result of Kansas’ biopharmaceutical industry. Kansas’ manufacturing sector captured the bulk of the direct and indirect impacts stemming from the state’s biopharmaceutical industry, while professional and scientific services accounted for 7.4 percent of the industry’s contribution in terms of economic activity.

Kansas - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.2%

Agric. & Mining0.7%


1.9%


3.0%

Information2.3%

Retail Trade2.2%


Real Estate 5.0%

Wholesale Trade4.0%

Other Srv.6.7%


7.4%

Construction0.3%

MFG62.6%



65

KentuckyKentucky’s biopharmaceutical industry was responsible for a total of nearly 7,200 employees in 2003 including the industry’s ripple effects. Almost 2,200 people were employed directly by the industry, with an additional 5,000 jobs generated in the state through its indirect and induced impacts. In terms of earnings, the indirect and induced impacts added $76.9 million to the direct earnings of $65.2 million for an overall earnings total of $142.1 million in the state. The biopharmaceutical industry altogether contributed a total of $303.9 million to Kentucky’s real output in 2003. This contribution was determined by summing the direct ($170.7 million), indirect ($65.5 million) and induced ($67.7 million) impacts.

Personal income tax revenues generated by Kentucky’s biopharmaceutical industry amounted to $33.6 million and the state’s biopharmaceutical companies paid an additional $2.9 million in corporate income taxes. The total sales tax revenues generated from the state’s biopharmaceutical product sales and related consumer purchases amounted to $4.9 million. In total, these biopharmaceutical-related tax revenues amounted to $41.4 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The pie chart below demonstrates the ripple effects of economic activity across industry sectors attributable to Kentucky’s biopharmaceutical industry. Clearly, the manufacturing sector, as well as professional and scientific services, benefited significantly from the state’s biopharmaceutical industry.

Kentucky - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.2%

Agric. & Mining0.7%

Information1.7%


2.7%



2.4%Retail Trade

2.6%

Real Estate 4.3%

Wholesale Trade3.5%

Other Srv.7.9%


15.1%

Construction0.4%

MFG55.1%



66

LouisianaWhen accounting for the multiplicative dynamics in 2003, the biopharmaceutical industry in Louisiana employed more than 1,600 people who generated some $56.0 million in earnings and $102.8 million in real output for the state. The contribution of the industry’s indirect and induced impacts accounted for an additional 1,000 jobs, $26.7 million in earnings and almost $44.0 million in real output in Louisiana.

The tax impacts derived from the state’s biopharmaceutical industry were broken down by major tax sources. The table below shows that $16.2 million were generated by the state’s biopharmaceutical industry in personal income tax revenues (including state, local and federal), while sales of the state’s biopharmaceutical products and related consumer purchases accounted for $3.6 million in total sales tax revenues. Additionally, corporate income tax revenues earned from the state’s biopharmaceutical companies totaled $1.8 million. In sum, these biopharmaceutical-related tax revenues added up to $21.6 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


Along with Louisiana’s manufacturing sector, professional and scientific services captured a high proportion of the direct and indirect impacts generated by the biopharmaceutical industry.

Lousiana - 2003 Economic Activity Generated by Biopharmaceutical Industry


0.9%

Information1.7%

Wholesale Trade3.1%



2.0%Management of

Companies 2.6%

Real Estate 5.4%

Retail Trade3.2%

Other Srv.10.3%


25.8%

Construction0.5%

MFG40.8%



67

MaineWith an employment multiplier of 2.8, each job created in the biopharmaceutical industry creates an additional 1.8 jobs in other sectors of Maine’s economy. Some 1,400 jobs were directly attributable to the industry in the state in 2003. An additional 2,600 jobs were created by the indirect and induced impacts of the industry. In total, the biopharmaceutical industry was responsible for almost 4,000 jobs in Maine in 2003. A total of $132.1 million in earnings were attributable to this sector in 2003 when accounting for the multiplicative dynamics. Of this figure, the biopharmaceutical industry contributed earnings of $66.5 million directly and $65.6 million through indirect and induced impacts. When accounting for the industry’s ripple effects, a total of $201.6 million in real output was achieved directly ($112.0 million) and through indirect ($31.8 million) and induced impacts ($57.7 million).

Maine’s biopharmaceutical industry generated $45.5 million in personal tax revenues (including state, local and federal), while sales of the state’s biopharmaceutical products and related consumer purchases contributed $1.3 million to the government in total sales tax revenues. The state’s biopharmaceutical companies accounted for $30.9 million in corporate income tax revenues. These biopharmaceutical-related tax receipts amounted to a total of $77.7 million in 2003.


ImpactDirect Impact

Indirect Impact

Induced Impact


The following figures represent the impact (both direct and indirect) of Maine’s biopharmaceutical industry on the state’s economy. The manufacturing sector and professional scientific services sector account for much of the economic activity stemming from the state’s biopharmaceutical industry.

Maine - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.0%

Agric. & Mining0.5%


1.7%

Retail Trade3.3%


2.3%

Information2.0%

Wholesale Trade2.6%

Real Estate 4.6%


Other Srv.10.3%


27.2%

Construction0.5%

MFG40.3%



68

MarylandMaryland’s biopharmaceutical industry was responsible for close to 35,100 jobs in the state. Of these, almost 70 percent – 24,400 people – were employed by indirect and induced impacts. Some 10,700 people are employed directly by the industry in the state. Earnings directly contributed by the industry in 2003 totaled $670.2 million. An additional $835.6 million in earnings were generated throughout the state by the indirect and induced impacts. That year, the biopharmaceutical industry was responsible for almost $2.8 billion in real output – of which $1.4 billion stems directly and an additional $1.4 billion stems from the indirect and induced impacts.

Maryland’s federal, local and state governments receive a significant gain in tax receipts from this industry. Most of the total gains in personal income taxes derived from Maryland’s biopharmaceutical industry were attributable to federal tax revenues ($376.4 million), while the remaining part comprised of state and local tax revenues accounted for $71.5 million of the total personal income tax revenues. The sales of the state’s biopharmaceutical products and related consumer purchases accounted for $2.3 million in sales tax revenues, while the state’s biopharmaceutical companies produced $94.8 million in corporate income taxes. These biopharmaceutical-related tax receipts added up to a total of $545.0 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


Maryland’s biopharmaceutical industry is crucial to the health and wealth of the state’s economy. The importance of the state’s biopharmaceutical industry as a vital part of the economy is well understood, but what are the implications of its economic impact on the overall state economy? The results, seen below, indicate that manufacturing and professional scientific services are among Maryland’s industry sectors that benefit significantly from its biopharmaceutical industry.

Maryland - 2003 Economic Activity Generated by Biopharmaceutical Industry

MFG48.0%

Construction0.4%


19.7%

Other Srv.9.1%


Real Estate 5.8%

Information2.7%


1.9%

Retail Trade2.7%

Wholesale Trade3.6%

Utilities1.2%

Agric. & Mining0.4%


1.0%



69

MassachusettsIn 2003, the biopharmaceutical industry in Massachusetts employed more than 21,400 workers, who earned more than $1.5 billion and produced almost $2.4 billion worth of real output for the state. This represents only the direct impact of the biopharmaceutical industry on the state’s economy. When the full extent of the multiplicative dynamics are accounted for, the biopharmaceutical industry was found to be responsible for a total of 77,300 jobs, almost $4.0 billion in earnings and over $4.8 billion in real output in the state.

The following table summarizes the local, state and federal government tax revenues generated by this industry. A large component of the tax revenues are personal income taxes. In 2003, Massachusetts’ biopharmaceutical industry generated $1.3 billion in personal income taxes (local, state and federal). The sales of the state’s biopharmaceutical products and related consumer purchases accounted for $20.8 million in sales tax revenue, while the state’s biopharmaceutical companies produced $177.9 million in corporate income taxes. Taken together, these biopharmaceutical-related tax receipts added up to a total of nearly $1.5 billion.


ImpactDirect Impact

Indirect Impact

Induced Impact


How does Massachusetts’ economy benefit from its biopharmaceutical industry? This particular industry sector makes an important contribution to the state’s manufacturing and professional scientific services sectors. Massachusetts’ real estate sector is also affected in terms of generating economic activity attributable to the state’s biopharmaceutical industry.

Massachusetts - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.0% Construction

0.4%


1.4%


3.7%

Information2.6%

Retail Trade2.3%

Wholesale Trade3.5%

Real Estate 6.0%


Other Srv.8.8%


22.1%

Agric. & Mining0.3%

MFG44.0%



70

MichiganThe biopharmaceutical industry directly employed more than 12,200 workers in Michigan in 2003. Michigan’s employment multiplier is 4.8, generating almost four times as many jobs throughout the state via the indirect and induced impacts for a total of 58,400 employees. A total of $817.1 million in earnings were directly generated by the industry in the state in 2003. These direct earnings combined with the indirect ($987.2 million) and induced ($683.5 million) earnings generated total earnings in Michigan of almost $2.5 billion. The industry contributed over $1.9 billion in direct real output in the state, which resulted in an additional $2.0 billion in real output from other sectors in the economy. A total of almost $4.0 billion in real output was generated overall by biopharmaceuticals in Michigan in 2003.Personal income taxes (including state, local and federal) attributable to the state’s biopharmaceutical industry accounted for $721.5 million. Tax revenues generated by sales of biopharmaceutical products and related consumer purchases added a further $69.9 million to Michigan’s government. Moreover, taxes associated with the state’s biopharmaceutical companies resulted in $261.6 million in corporate income taxes. These biopharmaceutical-related tax receipts totaled nearly $1.1 billion.


ImpactDirect Impact

Indirect Impact

Induced Impact


One way to see the importance of Michigan’s biopharmaceutical industry is to look at its impact (direct and indirect) on the state’s overall economy. Looking at the breakdown of industry sectors reveals that the manufacturing sector accounts for nearly 65 percent of the industry’s contribution in terms of generating economic activity.

Michigan - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.2%

Agric. & Mining0.6%

Information1.5%

Wholesale Trade3.7%

Retail Trade2.3%


1.8%



5.1%

Real Estate 4.3%


5.1%

Other Srv.7.0%

Construction0.3%

MFG64.8%



71

MinnesotaWhen accounting for the multiplier impacts, a total of more than 9,000 jobs were created in Minnesota by the biopharmaceutical industry. This contribution to the state’s employment is made up of direct employment by the sector (2,600 jobs) and the indirect and induced employment impacts (about 3,200 jobs each). Biopharmaceutical industry earnings in the state totaled almost $425.0 million in 2003. The industry generated approximately $166.0 million itself, plus and additional $258.7 million as a result of the multiplier impacts. Altogether, Minnesota’s biopharmaceutical industry contributed a total of $552.6 million toward real output – $279.5 million directly and more than $273.0 million through the indirect and induced impacts.

Total sales tax revenues generated by purchases of Minnesota’s biopharmaceutical industry and related consumer purchases amounted to $7.6 million, while personal income tax revenues (including state, local and federal) accounted for $136.1 million. In sum, total biopharmaceutical-related tax revenues (including personal income tax revenues, sales tax revenues and corporate income tax revenues) amounted to $276.9 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The industry sectors benefiting the most from Minnesota’s biopharmaceutical industry include the state’s manufacturing sector, followed by the professional and scientific services sector.

Minnesota - 2003 Economic Activity Generated by Biopharmaceutical Industry

MFG42.9%

Construction0.4%


21.0%

Other Srv.8.8%


Real Estate 6.6%


3.5%

Information2.2%Retail Trade

2.7%

Wholesale Trade3.6%



Utilities1.3%



72

MississippiWhen accounting for the multiplier impacts, Mississippi’s biopharmaceutical industry was responsible for close to 3,000 jobs in the state in 2003. Of these, 1,200 people were employed directly by the industry and 1,800 were employed through indirect and induced impacts. The $59.1 million in earnings the sector generated directly was augmented by $73.1 million in earnings attributable to other industry sectors in the state. Similarly, the biopharmaceutical industry generates $169.1 million in real output directly and almost $106.0 million via indirect and induced impacts, for a total of $275.0 million in real output in 2003.

The following table contains the financial contributions of Mississippi’s biopharmaceutical industry to federal, local and state governments. The state’s biopharmaceutical industry generated significant revenues from personal income taxes ($39.5 million), sales taxes derived from the state’s biopharmaceutical product sales and related consumer purchases ($5.2 million) and corporate income taxes ($1.2 million). In sum, these biopharmaceutical-related tax contributions added up to $45.9 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


As is evident from the pie chart below, Mississippi’s biopharmaceutical industry is of vital importance to the state’s manufacturing sector.

Mississippi - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.2%

Agric. & Mining0.6%

Information1.6%

Wholesale Trade2.9%



1.8%Retail Trade2.3%


3.4%

Real Estate 3.0%


5.1%Other Srv.

6.7%

Construction0.3%

MFG69.0%



73

MissouriTaking the multiplier impacts into account, Missouri’s biopharmaceutical industry had a total of 33,800 employees in 2003. More than 6,100 people were employed directly by the industry, with an additional 27,700 jobs generated throughout the rest of the economy by the indirect and induced impacts. In terms of earnings, the indirect and induced impacts contributed an additional $893.1 million to the direct impact amount of $417.5 million for an overall earnings total of $1.3 billion in the state. The biopharmaceutical industry contributed close to $2.3 billion to Missouri’s real output in 2003 (total impact). This contribution was determined by summing the direct ($1.1 billion), indirect ($759 million) and induced ($434 million) impacts.

Tax revenue contributions of Missouri’s biopharmaceutical industry are summarized in the table below. The state’s biopharmaceutical industry contributed $408.5 million in personal income taxes (including state, local and federal). The industry also generated tax revenues of $8.0 million from the sale of its biopharmaceutical products and related consumer purchases. Together with corporate income tax revenues ($174.4 million), these biopharmaceutical-related tax receipts amounted to $591.0 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The biopharmaceutical industry provides a wide range of benefits that contributes to the economic well being of Missouri’s industry sectors. The pie chart below indicates the importance of this industry to the state’s overall economy, especially the manufacturing sector, which benefited most.

Missouri - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.1%

Agric. & Mining0.5%


2.1%

Wholesale Trade3.9%

Information2.5%

Retail Trade2.1%Finance & Insurance

2.8%


4.8%

Real Estate 4.8%


5.9%

Other Srv.7.2%

Construction0.3%

MFG61.7%



74

MontanaThe biopharmaceutical industry in Montana employed almost 1,100 workers, who generated some $25.4 million in earnings and $38.8 million in total real output for the state in 2003. Of these figures, the industry’s indirect and induced impacts contributed 500 jobs, $9.7 million in earnings and over $16 million in real output.

Additionally, the industry generated $5.8 million in personal income tax revenues (state, local and federal). Total biopharmaceutical-related tax revenues (personal income tax revenues, sales tax revenues and corporate income tax revenues) associated with the state’s biopharmaceutical industry totaled $8.0 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


A straightforward way of assessing the impact of Montana’s biopharmaceutical industry on the state’s economy is to evaluate those benefits attributable to the biopharmaceutical industry across industry sectors. In contrast to other states, Montana’s biopharmaceutical industry clearly plays a vital role in the state’s professional and scientific services sector.

Montana - 2003 Economic Activity Generated by Biopharmaceutical IndustryAgric. & Mining

0.9%Construction

0.6%

Utilities1.6%


Information2.2%


1.9%

Wholesale Trade2.5%

Real Estate 6.3%

Retail Trade4.0%

Other Srv.12.2% MFG

17.6%


0.3%


47.0%



75

NebraskaWith an employment multiplier of 3.9, each job created in the biopharmaceutical industry in the state created an additional 2.9 jobs in other sectors of Nebraska’s economy. With 1,800 jobs directly attributable to the state’s industry in 2003, an additional 5,200 jobs were created by its indirect and induced impacts, bringing the total number of industry-related jobs in the state to 7,000. When accounting for the state’s multiplier impacts, a total of $215.0 million in earnings was attributable to this sector. Of this figure, the biopharmaceutical industry contributed earnings of $79.7 million directly and $135.3 million throughout the rest of Nebraska’s economy through indirect and induced impacts. When considering the multiplicative dynamics, Nebraska’s biopharmaceutical industry contributed a total of $584.0 million in real output to its economy. This was achieved directly ($316.6 million) and through the indirect ($154.3 million) and induced ($113.2 million) impacts.

Total sales tax revenues generated by purchases of the state’s biopharmaceutical products and related consumer purchases amount to $0.91 million. In addition to these tax benefits, Nebraska’s biopharmaceutical industry generated $68.0 million in personal income tax revenues (including state, local and federal). In sum, total biopharmaceutical-related taxes (including personal tax revenues, sales tax revenues and corporate income tax revenues) reach $78.5 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


An analysis of the proportion of economic activity generated through Nebraska’s biopharmaceutical industry across the state’s industry sectors, as shown in the pie chart below, indicates that manufacturing accounts for more than 66 percent of the industry’s contribution.

Nebraska - 2003 Economic Activity Generated by Biopharmaceutical Industry

MFG66.6%

Construction0.3%

Other Srv.6.6%


4.6%

Wholesale Trade4.0%

Real Estate 4.0%


Information2.0%

Retail Trade2.3%


3.2%



Utilities1.2%



76

NevadaThe total number of biopharmaceutical industry-related jobs in Nevada was 1,200 in 2003. Of these, about two-thirds were employed through indirect and induced impacts and 400 were employed directly by the industry. The industry contributed $23.3 million directly in 2003; an additional $27.2 million in earnings were generated in other sectors of the state’s economy by the indirect and induced impacts for an earnings total of $50.5 million. Nevada’s biopharmaceutical industry generated about $51.4 million in total real output – more than $31 million directly and more than $20 million via indirect and induced impacts.

Personal income tax liability (including state, local and federal) attributable to the state’s biopharmaceutical industry accounted for $12.7 million. Total sales tax revenues generated from the state’s biopharmaceutical product sales and related consumer purchases amounted to $3.7 million and corporate income tax revenues totaled $17.4 million. These biopharmaceutical-related tax receipts added up to a total of $33.8 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The pie chart below displays the benefits spilling over from Nevada’s biopharmaceutical industry into other sectors. Taken together, the manufacturing sector and the state’s professional and scientific services sector capture almost 70 percent of the industry’s contribution in terms of economic activity when measured by direct and indirect impacts.

Nevada - 2003 Economic Activity Generated by Biopharmaceutical Industry

MFG50.4%

Agric. & Mining0.3%


17.5%

Other Srv.8.1%


4.2%

Real Estate 6.0%

Retail Trade2.8%

Information2.1%


Wholesale Trade3.0%


1.7%Construction

0.4%

Utilities1.1%



77

New HampshireIn 2003, the biopharmaceutical industry in New Hampshire employed more than 1,100 workers who earned almost $57.0 million and produced $85.3 million in real output – the direct impact of the biopharmaceutical industry on the state’s economy. When the full extent of the multiplicative dynamics were included, the biopharmaceutical industry gnenerated a total of 3,500 jobs, more than $136.2 million in earnings and more than $149.1 million in real output in New Hampshire in 2003.

Personal income tax revenues (including state, local and federal) derived from New Hampshire’s biopharmaceutical industry accounted for $41.1 million. Total biopharmaceutical-related tax revenues (personal income tax revenues, sales tax revenues and corporate tax revenues) amounted to $49.6 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The pie chart below represents the impact figures, direct and indirect, stemming from New Hampshire’s biopharmaceutical industry on the rest of the state’s economy. The industry provided important economic stimuli for other sectors of the state economy, such as the manufacturing sector and the professional and scientific services sector.

MFG55.0%

Construction0.4%


14.5%

Other Srv.7.9%


4.2%

Real Estate 4.3%


Information1.8%

Retail Trade2.5%

Wholesale Trade3.8%



Utilities1.2%


New Hampshire - 2003 Economic Activity Generated by Biopharmaceutical Industry


78

New JerseyThe biopharmaceutical industry directly employed close to 46,400 workers in New Jersey in 2003. The state’s employment multiplier of 5.7 is the fourth largest in the country. More than 218,200 jobs were created throughout the state via indirect and induced impacts for a total of 264,600 employees in New Jersey in 2003. New Jersey has been the recipient of much in the way of positive spillovers from the biopharmaceutical sector. The state’s earnings and output multipliers, 3.3 and 2.2, respectively, rank as the second largest in each category in the country. When the full extent of the multiplicative dynamics are accounted for, the biopharmaceutical industry was found to be responsible for a total of almost $17.6 billion in earnings and $22.2 billion in real output in the state.

While these economic impacts are enormously important, the state’s biopharmaceutical industry also makes significant financial contributions to the federal, local and state government. The state’s biopharmaceutical industry generated sales revenues of $16.8 million through sales of biopharmaceutical products and related consumer purchases, while the industry generated $4.5 billion in personal income tax revenues (state, local and federal). Furthermore, New Jersey’s biopharmaceutical companies paid $628.7 million in corporate income taxes in 2003. These biopharmaceutical-related tax revenues amounted to a total of nearly $5.2 billion.


ImpactDirect Impact

Indirect Impact

Induced Impact


New Jersey’s biopharmaceutical industry makes enormous contributions to the state’s economy, generating additional economic activity, creating jobs and more demand for goods and services throughout the state. The pie chart below shows that the state’s manufacturing sector benefits substantially.

New Jersey - 2003 Economic Activity Generated by Biopharmaceutical Industry


0.3%


2.1%

Wholesale Trade3.9%

Information2.5%

Retail Trade2.3%


Real Estate 5.8%


4.7%

Other Srv.7.2%


7.3%

Construction0.3%

MFG59.7%



79

New MexicoNew Mexico’s biopharmaceutical industry directly employed 914 workers in the state in 2003. An additional 1,500 jobs were created by indirect and induced impacts for a total of about 2,500 employees in the state in 2003. A total of $38 million in earnings were directly generated by the industry in the state. These direct earnings combined with the indirect ($7.2 million) and induced ($19.2 million) impacts generated total earnings in New Mexico of approximately $64.4 million. The industry contributed close to $47 million in direct real output in New Mexico, which resulted in $36.2 million in real output from other sectors of the state’s economy. A total of more than $83 million in real output was generated by biopharmaceuticals in New Mexico in 2003.

The following table lists the tax contributions of New Mexico’s biopharmaceutical industry to the state. Personal income tax revenues (state, local and federal) generated $20.9 million, while total sales tax revenues derived from the state’s biopharmaceutical product sales and related consumer purchases totaled $2.5 million. In addition, New Mexico’s local and state governments benefited from $95.8 million in corporate income tax revenues. Taken together, these biopharmaceutical-related tax receipts added up to $119.3 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The following pie chart displays the direct and indirect impact of this particular industry on the rest of the state’s economy. Professional and scientific services captured nearly 38 percent of the industry’s contribution in terms of economic activity, followed by the manufacturing sector, which accounted for 26.7 percent.

New Mexico - 2003 Economic Activity Generated by Biopharmaceutical IndustryManagement of

Companies 1.1% Agric. & Mining

0.8%

Utilities1.6%


Wholesale Trade2.1%


1.9%

Information2.5%

Real Estate 6.2%

Retail Trade3.8%

Other Srv.12.5% MFG

26.7%

Construction0.5%


37.7%



80

New YorkTaking the industry’s ripple effects into account, New York’s biopharmaceutical industry was responsible for about 101,200 workers in the state in 2003. Of these, 36,300 were employed directly in the industry and an additional 64,800 were employed throughout the state in jobs generated by indirect and induced impacts. Each job in the biopharmaceutical industry created an additional 1.8 jobs in other sectors in New York. The industry also generated more than $5.0 billion total earnings for the state of which more than $3.0 billion was produced as a result of indirect and induced impacts. For each dollar earned by households employed directly in the biopharmaceutical industry, an additional $1.50 was generated in household earnings in all other industries in the state representing an earnings multiplier of 2.5. With respect to real output, the biopharmaceutical industry contributed more than $4.5 billion directly to the state’s economy and close to $4.0 billion in real output in other sectors for a total of almost $8.5 billion in real output in 2003.

A breakdown of the tax revenues collected by the federal, local and state government derived from New York’s biopharmaceutical industry is presented in the table below. Personal income tax revenues of $1.2 billion accounted for a large share of the industry’s total tax contributions. Tax revenues derived from sales taxes was $29.3 million, while the state’s biopharmaceutical companies generated $518.8 million in corporate income tax revenues. Total biopharmaceutical-related tax revenues accounted for nearly $1.8 billion.


ImpactDirect Impact

Indirect Impact

Induced Impact


The pie chart below shows the impact of New York’s biopharmaceutical industry on the state’s economy. The state’s biopharmaceutical industry most substantially affected manufacturing, and professional and scientific services.

New York - 2003 Economic Activity Generated by Biopharmaceutical Industry

MFG54.3%

Construction0.3%


13.5%

Other Srv.7.1%


4.4%

Real Estate 6.3%

Wholesale Trade3.2%

Retail Trade1.6%

Information3.0%



1.3%

Agric. & Mining0.3%

Utilities1.1%



81

North CarolinaWith an employment multiplier of 5.0, each job created in the biopharmaceutical industry in North Carolina created an additional four jobs in other sectors of the state’s economy. In numbers, 25,500 jobs were directly attributable to the industry in the state in 2003; an additional 102,200 jobs were created by indirect and induced impacts of the industry. In total, the biopharmaceutical industry generated 127,700 jobs in North Carolina in 2003. Taking the industry’s ripple effects into account, a total of close to $3.7 billion in earnings were attributable to the sector in the state in 2003. Of this figure, the biopharmaceutical industry contributed earnings of almost $1.3 billion directly and more than $2.4 billion through indirect and induced impacts. North Carolina’s total real biopharmaceutical output of almost $9.4 billion was made up of $4.5 billion in direct output, and $2.8 billion in indirect and $2.0 billion in induced impacts.

The table below gives an overview of taxation statistics derived from North Carolina’s biopharmaceutical industry. Personal income tax revenues (state, local and federal) attributable to the state’s biopharmaceutical industry amounted to $1.2 billion. The industry’s contributions to state, local and federal government consisted of $17.7 million in total sales revenues generated from the state’s biopharmaceutical product sales and related consumer purchases and $140.8 in corporate income taxes. Taken together, these biopharmaceutical-related tax revenues totaled $1.3 billion.


ImpactDirect Impact

Indirect Impact

Induced Impact


The following pie chart presents economic activity across industry sectors generated through North Carolina’s biopharmaceutical industry. The linkages between each industry sector and the state’s biopharmaceutical industry reveal that the manufacturing sector benefited significantly.

North Carolina - 2003 Economic Activity Generated by Biopharmaceutical Industry

MFG61.5%

Construction0.3%

Other Srv.7.6%


6.7%

Real Estate 4.2%


4.8%


Information2.1%

Retail Trade2.5%

Wholesale Trade3.8%


2.1%

Agric. & Mining0.6%

Utilities1.0%



82

North DakotaNorth Dakota’s employment base in the biopharmaceutical industry is very small; in 2003 the state employed a total of 32 employees. The industry generated $500,000 in earnings (total impact) and contributed $500,000 in direct real output in the state that resulted in an additional $400,000 in real output from other sectors of the state’s economy.

In addition to the biopharmaceutical industry’s economic contributions, the industry generated $300,000 in total sales revenues derived from the state’s biopharmaceutical product sales and related consumer purchases. Total biopharmaceutical-related tax revenues (personal income tax revenues, sales tax revenues and corporate income tax revenues) were $400,000.


ImpactDirect Impact

Indirect Impact

Induced Impact


To what extent does North Dakota’s biopharmaceutical industry influence and stimulate economic activity in other industry sectors? By computing the industry’s direct and indirect impact on the state’s economy, we see North Dakota’s biopharmaceutical industry primarily generated economic activity in the state’s professional and scientific services sector.

North Dakota - 2003 Economic Activity Generated by Biopharmaceutical IndustryAgric. & Mining

0.8%Management of

Companies 0.7%

Utilities1.8%


Information2.0%


1.8%Wholesale Trade

2.7%

MFG4.8%

Retail Trade4.2%

Real Estate 5.6%

Other Srv.12.2%

Construction0.6%


58.7%



83

OhioAltogether, a total of 18,620 jobs were generated by the biopharmaceutical industry in Ohio in 2003. This contribution to the state’s labor force was made up of direct employment in the sector (4,640 jobs), indirect employment (7,560 jobs), and induced employment (6,420 jobs) created through the industry’s multiplier effects. The industry generated approximately $242.2 million in earnings, with almost $358.8 million in additional earnings generated throughout the state. Ohio’s biopharmaceutical industry contributed a total of $807.7 million in real output – $402.5 million directly and $405.2 million via the indirect and induced impacts of other industries in the state.

As shown in the table below, Ohio’s biopharmaceutical industry generated $181.5 million in personal income tax revenues (state, local and federal), $88.1 million in total sales tax revenues derived from the state’s biopharmaceutical product sales and related consumer purchases, and $92.2 million in corporate income tax revenues. These biopharmaceutical-related tax receipts accounted for a total of $361.8 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The following pie chart illustrates the importance of the state’s biopharmaceutical industry to each of the state’s industry sectors. In this state, it played an important role in both the state’s manufacturing sector, and its professional and scientific services sector.

Ohio - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.3%

Agric. & Mining0.7%

Information2.0%


3.7%

Retail Trade3.0%


2.1%


Real Estate 5.2%

Wholesale Trade3.7%

Other Srv.9.5%


19.4%

Construction0.4%

MFG45.7%



84


OklahomaOklahoma’s employment multiplier is the sixth largest in the nation. Its employment multiplier of 5.3 means that for every job created in the biopharmaceutical industry in Oklahoma, an additional 4.3 jobs are created in other sectors of that state’s economy. In this case, 541 jobs were directly attributable to the industry in 2003 and an additional 2,330 jobs were created by indirect and induced impacts of the industry. In total, the biopharmaceutical industry generated almost 2,900 jobs in Oklahoma. A total of $63.3 million in earnings were attributable to that sector in 2003. Of that, $28.6 million were contributed directly and $34.6 million were earned through indirect and induced impacts. Biopharmaceuticals’ real output of $202 million includes $118.6 million of direct output, $40.6 million of indirect and $42.8 million in induced impacts.

The state’s biopharmaceutical industry generated $20.3 million in personal income tax revenues in 2003, including $4.4 million in state and local tax revenues and $15.8 million in federal tax revenues. Moreover, the state’s biopharmaceutical companies paid $9.9 million in corporate income taxes. As seen in the table below, total biopharmaceutical-related tax revenues (including personal income tax revenues, sales tax revenues and corporate income tax revenues) added up to $32.9 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The multiplier analysis shows that the impact of Oklahoma’s biopharmaceutical industry varies among sectors. The greatest impact of economic activity generated by the industry is on the state’s manufacturing sector.

Oklahoma - 2003 Economic Activity Generated by Biopharmaceutical Industry


0.9%


2.0%


2.9%


Information2.2%

Retail Trade2.5%

Real Estate 5.8%

Wholesale Trade3.5%


7.3%Other Srv.

7.9%

Construction0.3%

MFG61.0%


85


OregonOregon’s biopharmaceutical industry generated almost 3,900 jobs in the state (total impact). Of these, about 60 percent were employed in jobs created by indirect and induced impacts (2,440 workers), with 1,450 employed directly by the industry in the state. Earnings directly contributed by the industry in 2003 totaled $42.7 million. Almost $50.7 million in additional earnings were generated throughout other sectors of the state’s economy by the indirect and induced impacts. Biopharmaceuticals generated about $140.5 million in real output – $73.6 million directly and almost $67 million through indirect and induced impacts.

The state, federal and local tax revenues derived by Oregon’s biopharmaceutical industry in 2003 are displayed in the table below. The main source of these revenues is personal income tax revenues ($25.6 million), including state, local and federal tax revenues. Total biopharmaceutical-related tax revenues consisting of personal income tax revenues, sales tax revenues and corporate income tax revenues amounted to $43.8 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


All the industry sectors listed in the pie chart below show linkages to the state’s biopharmaceutical industry. Knowing these impacts is of crucial help in determining how potential changes in the state’s biopharmaceutical industry will affect economic activity in other industry sectors. For instance, professional and scientific services as well as the state’s manufacturing sector are substantially impacted by the biopharmaceutical industry.

Oregon - 2003 Economic Activity Generated by Biopharmaceutical Industry


0.5%


2.1%

Wholesale Trade3.3%


2.7%

Information2.2%


Real Estate 7.0%

Retail Trade3.4%

Other Srv.10.7%

MFG30.4%

Construction0.5%


32.5%


86


PennsylvaniaPennsylvania has the second-highest employment multiplier in the nation. With an employment multiplier of 5.9, each job created in the biopharmaceutical industry created an additional 4.9 jobs in other sectors of Pennsylvania’s economy. Quantitatively, 34,670 jobs were directly attributable to the industry in 2003, with an additional 171,080 jobs created indirectly and by induced impacts of the industry. In total, almost 205,800 jobs and nearly $9.4 billion in earnings were attributable to the Pennsylvania biopharmaceutical industry in 2003. Of this figure, biopharmaceuticals contributed earnings of $3.0 billion directly and more than $6.3 billion indirectly and via induced impacts. Pennsylvania had the third-highest earnings multiplier in the nation at 3.1. Its biopharmaceutical industry was responsible for a total of $15.8 billion in real output – $7.3 billion achieved directly, $5.2 billion indirectly and $3.3 billion through induced impacts. Pennsylvania had the second-highest output multiplier in the nation at 2.2.

The state’s biopharmaceutical companies paid about $692.9 million in corporate income tax revenues, while the industry was also responsible for an additional $2.7 billion in personal income tax revenues (state, local and federal). The industry generated $42.0 million in sales tax revenues derived from biopharmaceutical product sales and related consumer purchases. These biopharmaceutical-related tax receipts amounted to nearly $3.4 billion.


ImpactDirect Impact

Indirect Impact

Induced Impact


An analysis of the direct and indirect impacts of the state’s biopharmaceutical industry on the state’s industry sectors shows that Pennsylvania’s manufacturing sector captured more than 60 percent of the industry’s contribution in terms of generating economic activity. The economic impact associated with the state’s biopharmaceutical industry is less significant to the state’s professional and scientific services sector.

Pennsylvania - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.2%

Agric. & Mining0.8%

Information2.2%


3.3%


2.3%

Retail Trade2.3%


Real Estate 4.7%

Wholesale Trade3.5%

Other Srv.7.5%


7.9%

Construction0.3%

MFG60.8%


87


Rhode IslandRhode Island’s biopharmaceutical industry was responsible for more than 5,600 jobs in the state. Of these, almost 68 percent – 3,782 people – were employed in jobs created through indirect and induced impacts, with 1,837 employed directly by the industry in the state. Earnings directly contributed by the industry in 2003 totaled $64.2 million. Almost $64.0 million additional earnings were generated throughout the state’s economy by the indirect and induced impacts for total earnings in Rhode Island of $127.9 million. Biopharmaceuticals were responsible for more than $255.0 million in real output altogether – more than $148.0 million directly and $107.1 million by indirect and induced impacts.

Federal, local and state governments benefited significantly from Rhode Island’s biopharmaceutical industry through tax revenues. The contribution of this industry in terms of personal income tax revenues (state, local and federal) amounted to $66.5 million. The table below reflects the total biopharmaceutical-related tax revenues (including personal income tax revenues, sales tax revenues and corporate income tax revenues) in the amount of $69.6 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


Evaluating the importance of Rhode Island’s biopharmaceutical industry, we find that this sector affects other industry sectors as well. The direct and indirect impacts are considerably lower for industry sectors such as construction, utilities and retail trade, while a number of industry sectors, including manufacturing and professional and scientific services, are highly affected by the state’s biopharmaceutical industry in terms of generating economic activity.

Rhode Island - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities0.7% Construction

0.4%


1.2%


Retail Trade2.4%

Information2.0%

Wholesale Trade2.9%

Real Estate 5.0%


4.1%


Scientific Srv.18.8%

Agric. & Mining0.2%

MFG50.9%


88


South CarolinaIn 2003, the biopharmaceutical industry in South Carolina employed 2,242 workers, who earned a total of $94.3 million and produced $223.4 million of industrial real output for the state. These figures represent just the direct impact of the biopharmaceutical industry on the state’s economy for that year. When the full extent of the multiplicative dynamics are taken into account, the biopharmaceutical industry contributed a total of almost 7,100 jobs, almost $222.0 million in earnings and $384.5 million in real output to the state in 2003.

To better understand the important role of South Carolina’s biopharmaceutical industry to its economy, we evaluated its contribution to federal, local and state tax revenues. Doing so revealed that personal income tax revenues totaled $71.0 million, while total sales tax revenues generated from the state’s biopharmaceutical product sales and related consumer purchases accounted for $4.3 million. Taken together with corporate income tax revenues ($10.5 million), total biopharmaceutical-related tax revenues amounted to $85.8 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The following pie chart displays the impacts of South Carolina’s biopharmaceutical industry on the state’s other industry sectors. The state’s biopharmaceutical industry does not generate significant levels of economic activity for the state’s professional and scientific services sector; however, South Carolina’s manufacturing sector benefits significantly from the biopharmaceutical industry.

South Carolina - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.1%

Agric. & Mining0.5%

Information1.6%



1.8%


1.7%

Retail Trade2.3%

Real Estate 4.4%

Wholesale Trade3.3%


4.9%

Other Srv.7.2%

Construction0.3%

MFG68.5%


89


South DakotaSouth Dakota is a state with a relatively low employment base in the biopharmaceutical industry. Its direct employment of 78 workers in 2003 generated an additional 133 employees in all other industries in the state. Its employment multiplier of 2.7 created an additional 1.7 jobs in other sectors for a total of 211 employees in the state. In terms of earnings, the indirect and induced impacts contributed $1.1 million for a total of $2.2 million in 2003. The sector directly contributed $2.2 million toward real output, which resulted in an additional $1.3 million in real output from other sectors in South Dakota’s economy.

Biopharmaceutical companies in South Dakota generated $2.7 million in corporate income tax revenues, while the industry accounted for $300,000 in personal income tax revenues (state, local and federal). Total biopharmaceutical-related tax revenues, comprised of personal income tax revenues, sales tax revenues and corporate income tax revenues, added up to $3.3 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


Among all industry sectors impacted by South Dakota’s biopharmaceutical industry, the state’s manufacturing, and professional and scientific services sectors benefited most.

South Dakota - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.3%

Agric. & Mining0.6%


1.5%

Wholesale Trade3.3%

Retail Trade2.8%

Information1.8%


Real Estate 4.1%


3.3%

Other Srv.8.1%


27.6%

Construction0.4%

MFG42.5%


90

TennesseeAltogether, almost 13,700 jobs were generated by the biopharmaceutical industry in Tennessee in 2003. This contribution to the state’s employment was made up of direct employment in the sector (3,833 jobs), indirect employment (5,684 jobs) and induced employment (4,167 jobs) created though the industry’s multiplier effects. Biopharmaceutical-related earnings in Tennessee totaled $531.4 million in 2003 – $202.5 million in direct earnings and close to $329.0 million in additional earnings generated throughout the state via the indirect and induced impacts. Tennessee’s biopharmaceutical industry contributed a total of more than $1.1 billion toward real output – $609.5 million directly and $534.7 million via indirect and induced impacts of other industries in the state.

The table below provides information on the biopharmaceutical industry’s tax contribution. State, local and federal governments collected personal income tax revenues from the economic activity generated by Tennessee’s biopharmaceutical industry in the amount of $164.7 million. In addition, tax revenues were generated from the state’s biopharmaceutical product sales and related consumer purchases in the amount of $11.4 million, and from corporate income tax revenues in the amount of $98.1 million. These biopharmaceutical-related tax receipts accounted for a total of $274.1 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The generation of economic activity attributable to Tennessee’s biopharmaceutical industry is most pronounced in the state’s manufacturing sector. By comparison, almost 6 percent of the economic activity in the state’s real estate sector stemmed from its biopharmaceutical industry, while the state’s professional and scientific services sector captured 5 percent of the industry’s contribution.

Tennessee - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.1%

Agric. & Mining0.7%

Information2.0%


Retail Trade2.4%


2.0%


2.4%


5.0%

Wholesale Trade4.1%

Real Estate 5.8%

Other Srv.7.8%

Construction0.3%

MFG63.4%



91

TexasTexas’ biopharmaceutical industry generated 46,266 jobs in the state in 2003. Of these, 12,311 were employed directly by the industry, while close to 34,000 were generated through the indirect and induced impacts. Earnings in 2003 directly attributable to the industry were $728.1 million. Close to $1.0 billion in additional earnings were generated in the state through the industry’s indirect and induced multiplier effects for total earnings of greater than $1.7 billion. The biopharmaceutical industry contributed almost $3.0 billion in real output in 2003, about half directly ($1.5 billion) and half via indirect and induced impacts ($1.5 billion).

The biopharmaceutical industry’s contribution to tax collections is summarized in the table below. It contributed $433.5 million in personal income tax revenues (state, local and federal), provided corporate income tax revenues of $111.5 million, and generated $42.7 million in total sales tax revenues derived from the state’s biopharmaceutical product sales and related consumer purchases. These biopharmaceutical-related tax revenues accounted for a total of $587.7 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The following pie chart demonstrates how Texas’ biopharmaceutical industry generated economic activity within the state’s industry sectors, especially in the manufacturing sector.

Texas - 2003 Economic Activity Generated by Biopharmaceutical Industry

Agric. & Mining1.0% Management of

Companies 1.0%

Utilities1.4%

Wholesale Trade3.7%

Information2.6%


2.2%Retail Trade2.9%

Real Estate 6.7%


Other Srv.9.4%


16.5%

Construction0.4%

MFG48.3%



92

UtahWith an employment multiplier of 4.2, each job created in the biopharmaceutical industry generated an additional 3.2 jobs in other sectors of Utah’s economy. With 5,287 jobs directly attributable to the industry in the state, the multiplier effect produced an additional 17,000 jobs due to indirect and induced impacts of the industry in 2003. In total, the biopharmaceutical industry generated 22,200 jobs in Utah in 2003 yielding $597.6 million in earnings attributable to that sector. Of this figure, biopharmaceuticals contributed $195.2 million directly and $402.3 million through indirect and induced impacts. Utah’s earnings multiplier of 3.1 is the third largest in the country. Its output multiplier, 2.1, is also the nation’s third largest. Utah’s biopharmaceutical industry produced a total of $701.4 million in real output in all industries throughout the state.

Utah’s biopharmaceutical industry fiscal achievements included $136.5 million in personal income tax revenues (state, local and federal), $1.1 million sales revenues derived from the state’s biopharmaceutical product sales and related consumer purchases and $57.1 million in corporate income taxes. Taken together, these biopharmaceutical-related tax revenues accounted for $194.6 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The importance of the state’s biopharmaceutical industry can be seen in its spillover effects on other industry sectors. As is evident from the pie chart below, the prosperity of the manufacturing sector is largely attributable to the state’s biopharmaceutical industry.

Utah - 2003 Economic Activity Generated by Biopharmaceutical Industry


0.8%


2.2%

Wholesale Trade3.8%

Retail Trade2.6%


3.2%

Real Estate 5.4%


4.5%

Other Srv.8.3%


9.3%

Construction0.4%

MFG55.7%



93

VermontVermont is a state with a relatively low biopharmaceutical industry employment base. Its direct employment of 122 workers generated an additional 187 employees in all other industries, that is, each biopharmaceutical job created 1.5 jobs in another sector of the economy for a total of nearly 310 employees in the state. In terms of earnings, the indirect and induced impacts added $2.8 million to the biopharmaceutical industry’s direct earnings of $3.9 million for a total of $6.6 million in 2003. Indirect and induced impacts produced $1.1 million and $2.7 million in real output, respectively. These, plus the direct impact of $6.7 million, generated a total $10.4 million in real output for the state in 2003.

Total personal income tax revenues (state, local and federal) derived from the state’s biopharmaceutical industry totaled $1.8 million. Total biopharmaceutical-related tax revenues derived from personal income tax revenues, sales tax revenues and corporate income tax revenues amounted to $3.3 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The pie chart below shows that Vermont’s biopharmaceutical industry provides important stimuli for other industry sectors of the economy. Clearly, the state’s manufacturing sector, followed by the professional and scientific services sector, benefited significantly from the biopharmaceutical industry in terms of generating economic activity.

Vermont - 2003 Economic Activity Generated by Biopharmaceutical Industry

Agric. & Mining0.4% Construction

0.4%

Utilities1.2%


Information2.0%


1.7%Wholesale Trade2.7%

Real Estate 4.7%

Retail Trade3.0%

Other Srv.8.8%


26.8%


0.2%MFG45.2%



94

VirginiaTaking multiplicative dynamics into account, more than 19,700 jobs were generated by the biopharmaceutical industry in Virginia in 2003. That sector’s contribution to the state’s employment was 5,314 jobs in direct employment, 7,617 jobs in indirect employment and 6,779 jobs in induced employment. Biopharmaceutical-related earnings in Virginia totaled $598.7 million in 2003; the industry generated about $254.6 million itself, with more than $344.0 million in additional earnings generated throughout the state. Virginia’s biopharmaceutical industry contributed close to $1.2 billion in real output – $608.5 million directly and $553.8 million via indirect and induced impacts on other industries.

The state’s biopharmaceutical industry generated $118.4 million in personal income tax revenues (state, local and federal), $9.1 million in total sales tax revenues generated from the state’s biopharmaceutical product sales and related consumer purchases, and $74.0 million in corporate income tax revenues for a total of $201.9 million biopharmaceutical-related tax revenues.


ImpactDirect Impact

Indirect Impact

Induced Impact


Economic multipliers bring interindustry relationships to light. The following pie chart demonstrates that Virginia’s manufacturing sector benefits substantially from the biopharmaceutical industry absorbing nearly 50 percent of the impact (direct and indirect).

Virginia - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities0.9%

Agric. & Mining0.7%


2.1%

Wholesale Trade3.1%


Retail Trade2.7%Information

2.7%

Real Estate 5.6%


4.0%

Other Srv.8.7%


17.2%

Construction0.4%

MFG49.1%



95

WashingtonWashington’s biopharmaceutical industry generated almost 29,000 jobs in that state in 2003. Of those, 8,714 people were employed directly by the industry, while 20,200 jobs were generated by the industry’s indirect and induced impacts. Earnings in 2003 directly attributable to the industry were $512.6 million. Close to $636.0 million in additional earnings were generated by industry multiplier effects for an earnings total of $1.1 billion in Washington in 2003. The biopharmaceutical industry contributed $1.6 billion toward real output – $857.1 million directly and $758.8 million via indirect and induced impacts.

The tax contribution of the biopharmaceutical industry is reflected in the table below. The state’s biopharmaceutical companies paid $33.5 million in corporate income tax revenues, while the industry also contributed heavily to the overall government in the form of personal income tax revenues of $310.7 million. Total biopharmaceutical-related tax revenues comprised of personal income tax revenues, sales tax revenues and corporate income tax revenues totaled $359.1 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


Given the important role of the state’s biopharmaceutical industry, the pie chart below summarizes the impact figures (direct and indirect) stemming from this particular industry sector. The ripple effects of the biopharmaceutical industry can be seen primarily in the state’s manufacturing and professional and scientific services sectors.

Washington - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.2%

Agric. & Mining0.6%


2.0%

Retail Trade3.1%


2.7%

Information2.5%


Real Estate 6.2%

Wholesale Trade3.4%

Other Srv.9.5%


22.3%

Construction0.4%

MFG43.1%



96

West VirginiaIncluding the ripple effects throughout the state, West Virginia’s biopharmaceutical industry produced 5,833 jobs in the state in 2003. Of these, 1,879 people were employed directly by the industry and close to 4,000 jobs were generated throughout the state’s economy by indirect and induced impacts. Earnings directly attributable to the industry in 2003 totaled $106.8 million. More than $112.4 million in additional earnings were generated in the state through the industry’s multiplier effects for total earnings in 2003 of $219.2 million. The biopharmaceutical industry contributed $521.7 million toward real output in 2003, 61 percent directly ($318.3 million) and the remainder by indirect and induced impacts ($203.5 million).

The biopharmaceutical industry’s total tax liability of $87.0 million in 2003 was comprised of $69.6 million in personal income tax revenues (state, local and federal), $2.2 million in total sales revenues generated by the state’s biopharmaceutical product sales and related consumer purchases, and $15.1 million in corporate income tax revenues.


ImpactDirect Impact

Indirect Impact

Induced Impact


The pie chart below indicates that West Virginia’s manufacturing sector is substantially positively impacted by the state’s biopharmaceutical industry.

West Virginia - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.2%

Agric. & Mining0.7%


1.3%Retail Trade

2.1%



1.5%Information

1.7%

Wholesale Trade2.9%

Real Estate 2.7%


Scientific Srv.6.4%

Construction0.3%

MFG71.4%



97


WisconsinWisconsin’s biopharmaceutical industry generated a total of 12,625 jobs in 2003 taking multiplier impacts into account. Of this total, 4,144 people were employed directly by the industry with an additional 8,482 jobs generated throughout the rest of the state’s economy via the indirect and induced impacts. In terms of earnings, indirect and inducted impacts generated $248.6 million and $178.6 million was generated directly for an overall earnings total of $427.1 million in the state in 2003. The biopharmaceutical industry contributed about $800 million toward real output in 2003 (total impact). This contribution was determined by summing the direct real output ($445.4 million), indirect real output ($175.3 million) and induced real output impacts ($179.0 million).

The personal tax revenues (state, local and federal) generated by the state’s biopharmaceutical industry amounted to $132.1 million, while the state’s biopharmaceutical companies contributed corporate income taxes of $73.3 million. Total biopharmaceutical-related tax revenues (including personal income tax revenues, sales tax revenues and corporate income tax revenues) accounted for $214.0 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


Wisconsin’s biopharmaceutical industry generates significant economic activity in other industry sectors of the state economy, such as manufacturing (59.5 percent), professional and scientific services (10.3 percent) and other services (7.5 percent).

Wisconsin - 2003 Economic Activity Generated by Biopharmaceutical Industry

Utilities1.2%

Agric. & Mining0.6%

Information1.8%


3.5%

Retail Trade2.6%


1.9%


Real Estate 4.2%

Wholesale Trade3.7%

Other Srv.7.5%


10.3%

Construction0.4%

MFG59.5%


98

WyomingWith an employment multiplier of 2.1, each job created in the biopharmaceutical industry in Wyoming created an additional 1.1 jobs in other sectors of the state’s economy. Wyoming is a state with a relatively low employment base in the biopharmaceutical industry with a total of 126 employees in the state including multiplier effects. In terms of earnings, the indirect and induced impacts contributed $2.8 million to the sector’s direct earnings of $4.2 million for a total of $7.0 million in Wyoming in 2003. An additional $7.0 million in real output was produced in Wyoming by the indirect and induced impacts resulting from the presence of the biopharmaceutical industry in the state. These, plus the direct real output of $17.2 million, generated a total of $24.2 million in real output for the state in 2003.

The biopharmaceutical industry contribution to the federal, local and state governments in tax revenues that year included $1.7 million in personal income tax revenues (state, local and federal), $70,000 in total sales tax revenues generated by the state’s biopharmaceutical product sales and related consumer purchases, and $280,000 in corporate income taxes. These biopharmaceutical-related tax receipts added up to a total of $2.1 million.


ImpactDirect Impact

Indirect Impact

Induced Impact


The pie chart below summarizes the impact figures stemming from direct and indirect impacts that the biopharmaceutical industry brings to the rest of the economy. Clearly, Wyoming’s biopharmaceutical industry immediately translates into economic activity in the state’s manufacturing sector.

Wyoming - 2003 Economic Activity Generated by Biopharmaceutical Industry


1.0%Agric. & Mining

0.5%

Utilities1.0%

Retail Trade2.2%


1.3%


1.6%

Real Estate 5.3%

Wholesale Trade2.4%


Scientific Srv.8.0%

Construction0.3%

MFG68.7%

Sourcess: Milken Institute, Economy.com, BLS, BEA.


99

State


Multiplier

Total Impact

(Thous.)

Direct Impact

(Thous.)

Indirect + Induced(Thous.)

Induced Impact

(Thous.)

Indirect Impact

(Thous.)Induced Share

Indirect Share

Alabama 2.6 3.683 1.392 2.290 1.481 0.810 0.6 0.4Alaska 1.7 0.140 0.085 0.055 0.050 0.006 0.9 0.1Arizona 2.8 3.295 1.183 2.112 1.189 0.923 0.6 0.4Arkansas 2.0 0.724 0.366 0.359 0.254 0.105 0.7 0.3California 4.5 317.198 69.986 247.212 111.284 135.928 0.5 0.5Colorado 3.8 19.730 5.174 14.555 7.138 7.417 0.5 0.5Connecticut 5.1 50.797 9.909 40.888 15.691 25.197 0.4 0.6Delaware 4.3 3.782 0.880 2.902 1.055 1.846 0.4 0.6District of Columbia 1.5 4.327 2.817 1.510 0.584 0.926 0.4 0.6Florida 3.4 21.791 6.493 15.298 8.087 7.211 0.5 0.5Georgia 4.4 17.382 3.964 13.419 5.810 7.609 0.4 0.6Hawaii 2.2 0.699 0.317 0.382 0.273 0.109 0.7 0.3Idaho 2.4 0.047 0.019 0.028 0.022 0.006 0.8 0.2Illinois 5.8 127.510 21.914 105.596 39.357 66.239 0.4 0.6Indiana 6.0 116.547 19.497 97.050 37.422 59.628 0.4 0.6Iowa 3.2 8.097 2.519 5.578 2.497 3.082 0.4 0.6Kansas 3.1 4.535 1.481 3.055 1.369 1.685 0.4 0.6Kentucky 3.3 7.090 2.161 4.930 2.273 2.657 0.5 0.5Louisiana 2.4 1.626 0.674 0.953 0.587 0.365 0.6 0.4Maine 2.8 3.978 1.404 2.573 1.467 1.106 0.6 0.4Maryland 3.3 35.098 10.715 24.383 11.926 12.457 0.5 0.5Massachusetts 3.6 77.279 21.419 55.861 27.163 28.698 0.5 0.5Michigan 4.8 58.407 12.207 46.200 19.136 27.065 0.4 0.6Minnesota 3.4 9.030 2.648 6.381 3.164 3.218 0.5 0.5Mississippi 2.5 2.985 1.185 1.800 0.920 0.880 0.5 0.5Missouri 5.5 33.786 6.132 27.654 10.101 17.553 0.4 0.6Montana 2.0 1.099 0.563 0.536 0.423 0.112 0.8 0.2Nebraska 3.9 7.039 1.811 5.228 2.217 3.011 0.4 0.6Nevada 2.9 1.232 0.425 0.807 0.474 0.334 0.6 0.4New Hampshire 3.1 3.466 1.135 2.331 1.101 1.230 0.5 0.5New Jersey 5.7 264.637 46.356 218.281 78.640 139.641 0.4 0.6New Mexico 2.7 2.455 0.914 1.541 1.140 0.401 0.7 0.3New York 2.8 101.154 36.313 64.841 28.629 36.212 0.4 0.6North Carolina 5.0 127.692 25.482 102.210 41.732 60.478 0.4 0.6North Dakota 1.8 0.032 0.018 0.015 0.012 0.003 0.8 0.2Ohio 4.0 18.622 4.642 13.980 6.416 7.564 0.5 0.5Oklahoma 5.3 2.867 0.541 2.326 1.188 1.138 0.5 0.5Oregon 2.7 3.888 1.453 2.435 1.289 1.146 0.5 0.5Pennsylvania 5.9 205.756 34.673 171.082 65.096 105.987 0.4 0.6Rhode Island 3.1 5.619 1.837 3.782 1.822 1.960 0.5 0.5South Carolina 3.2 7.148 2.242 4.906 2.206 2.700 0.4 0.6South Dakota 2.7 0.211 0.078 0.133 0.073 0.060 0.5 0.5Tennessee 3.6 13.684 3.833 9.851 4.167 5.684 0.4 0.6Texas 3.8 46.266 12.311 33.954 15.834 18.120 0.5 0.5Utah 4.2 22.200 5.287 16.913 7.069 9.844 0.4 0.6Vermont 2.5 0.308 0.122 0.187 0.113 0.073 0.6 0.4Virginia 3.7 19.710 5.314 14.396 6.779 7.617 0.5 0.5Washington 3.3 28.923 8.714 20.209 11.327 8.882 0.6 0.4West Virginia 3.1 5.833 1.879 3.954 1.805 2.150 0.5 0.5Wisconsin 3.0 12.625 4.144 8.482 4.301 4.180 0.5 0.5Wyoming 2.1 0.126 0.061 0.065 0.046 0.018 0.7 0.3United States* 6.7 2724.8 406.7 2318.1 966.3 1351.8 0.4 0.6


Biopharmaceutical EmploymentMultiplier Impacts, 2003

*U.S. direct impact is the sum of the direct impact of all states, including D.C.; Multiplier includes out-of-own state economic contributions


100

State

Final-Demand Output

Multiplier

Total Impact

(US$ 96, Mil.)

DirectImpact

(US$ 96, Mil.)

Indirect + Induced

(US$ 96, Mil.)

Induced Impact

(US$ 96, Mil.)

Indirect Impact

(US$ 96, Mil.)Induced Share

Indirect Share



Biopharmaceutical Real OutputMultiplier Impacts, 2003



101

State

Direct-EffectEarningsMultiplier

Total Impact

(US$ Mil.)

Direct Impact

(US$ Mil.)

Indirect + Induced(US$ Mil.)

Induced Impact

(US$ Mil.)

Indirect Impact

(US$ Mil.)Induced Share

Indirect Share

Alabama 1.8 117.5 64.2 53.3 33.3 20.0 0.6 0.4Alaska 1.5 4.9 3.3 1.6 1.4 0.2 0.9 0.1Arizona 2.2 138.2 62.5 75.6 40.5 35.2 0.5 0.5Arkansas 1.8 16.4 9.0 7.4 4.7 2.7 0.6 0.4California 2.9 15035.6 5170.2 9865.4 4195.1 5670.2 0.4 0.6Colorado 2.4 521.0 215.9 305.1 150.0 155.2 0.5 0.5Connecticut 3.0 3591.0 1189.7 2401.4 911.9 1489.5 0.4 0.6Delaware 2.7 233.0 86.1 146.9 52.0 94.8 0.4 0.6District of Colum 1.3 225.0 175.0 50.0 19.1 30.9 0.4 0.6Florida 2.3 848.3 364.3 484.1 248.1 235.9 0.5 0.5Georgia 2.8 717.2 254.9 462.3 199.4 262.9 0.4 0.6Hawaii 1.8 25.6 14.2 11.3 7.9 3.5 0.7 0.3Idaho 1.6 1.3 0.8 0.5 0.4 0.1 0.8 0.2Illinois 3.6 6094.4 1696.0 4398.5 1616.4 2782.0 0.4 0.6Indiana 2.8 4692.8 1651.7 3041.1 1167.9 1873.2 0.4 0.6Iowa 2.3 200.2 87.3 112.9 50.5 62.4 0.4 0.6Kansas 2.3 159.3 67.8 91.5 39.9 51.6 0.4 0.6Kentucky 2.2 142.1 65.2 76.9 36.4 40.5 0.5 0.5Louisiana 1.9 56.0 29.3 26.7 16.4 10.3 0.6 0.4Maine 2.0 132.1 66.5 65.6 38.3 27.3 0.6 0.4Maryland 2.2 1505.8 670.2 835.6 383.9 451.7 0.5 0.5Massachusetts 2.6 3961.8 1541.8 2420.0 1072.7 1347.3 0.4 0.6Michigan 3.0 2487.8 817.1 1670.7 683.5 987.2 0.4 0.6Minnesota 2.6 424.7 166.0 258.7 120.1 138.6 0.5 0.5Mississippi 2.2 132.1 59.1 73.1 36.0 37.1 0.5 0.5Missouri 3.1 1310.6 417.5 893.1 318.7 574.4 0.4 0.6Montana 1.6 25.4 15.7 9.7 7.5 2.2 0.8 0.2Nebraska 2.7 215.0 79.7 135.3 57.1 78.1 0.4 0.6Nevada 2.2 50.5 23.3 27.2 15.5 11.7 0.6 0.4New Hampshire 2.4 136.2 56.9 79.3 36.9 42.5 0.5 0.5New Jersey 3.3 17559.3 5352.3 12206.9 4329.4 7877.5 0.4 0.6New Mexico 1.7 64.4 38.0 26.4 19.2 7.2 0.7 0.3New York 2.5 5032.2 2016.5 3015.7 1235.7 1779.9 0.4 0.6North Carolina 2.9 3678.9 1275.8 2403.1 994.1 1409.0 0.4 0.6North Dakota 1.5 0.5 0.3 0.2 0.1 0.0 0.8 0.2Ohio 2.5 600.9 242.2 358.8 167.3 191.5 0.5 0.5Oklahoma 2.2 63.3 28.6 34.6 18.1 16.5 0.5 0.5Oregon 2.2 93.4 42.7 50.7 26.4 24.3 0.5 0.5Pennsylvania 3.1 9378.8 3046.3 6332.5 2368.4 3964.1 0.4 0.6Rhode Island 2.0 127.9 64.2 63.7 34.2 29.5 0.5 0.5South Carolina 2.4 221.9 94.3 127.6 57.5 70.1 0.5 0.5South Dakota 2.0 2.2 1.1 1.1 0.6 0.5 0.6 0.4Tennessee 2.6 531.4 202.5 328.9 137.3 191.5 0.4 0.6Texas 2.4 1733.8 728.1 1005.7 468.1 537.6 0.5 0.5Utah 3.1 597.6 195.2 402.3 165.3 237.0 0.4 0.6Vermont 1.7 6.6 3.9 2.8 1.8 1.0 0.6 0.4Virginia 2.4 598.7 254.6 344.1 161.1 183.0 0.5 0.5Washington 2.2 1148.5 512.6 635.9 324.9 311.0 0.5 0.5West Virginia 2.1 219.2 106.8 112.4 50.7 61.7 0.5 0.5Wisconsin 2.4 427.1 178.6 248.5 119.2 129.4 0.5 0.5Wyoming 1.7 7.0 4.2 2.8 1.9 0.9 0.7 0.3United States* 3.9 115089.6 29510.1 85579.4 31314.8 54264.7 0.4 0.6


Biopharmaceutical EarningsMultiplier Impacts, 2003



102

StateState & Local Taxes

(US$ Mil.)Federal Taxes

(US$ Mil.)Total Taxes (US$ Mil.)

Alabama 17.5 59.9 77.4Alaska 1.3 4.8 6.1Arizona 21.5 57.1 78.6Arkansas 4.9 8.6 13.5California 2208.2 4631.2 6839.4Colorado 33.0 118.5 151.6Connecticut 210.9 1105.7 1316.6Delaware 42.4 87.8 130.2Dist.of Columbia 27.6 75.7 103.3Florida 68.8 329.8 398.7Georgia 64.4 217.3 281.7Hawaii 2.8 7.4 10.2Idaho 3.8 9.6 13.3Illinois 395.6 1785.0 2180.6Indiana 354.3 1240.1 1594.4Iowa 23.0 41.0 64.1Kansas 16.4 51.4 67.8Kentucky 14.1 27.3 41.4Louisiana 6.2 15.4 21.6Maine 20.7 57.0 77.7Maryland 95.4 449.6 545.0Massachusetts 273.4 1186.0 1459.4Michigan 190.8 862.2 1053.1Minnesota 47.6 229.3 276.9Mississippi 12.0 33.9 45.9Missouri 120.5 470.5 591.0Montana 2.5 5.5 8.0Nebraska 17.7 60.8 78.5Nevada 3.7 30.1 33.8New Hampshire 8.9 40.7 49.6New Jersey 1282.6 3881.1 5163.7New Mexico 28.8 90.4 119.3New York 514.3 1248.1 1762.3North Carolina 302.4 1024.1 1326.5North Dakota 0.3 0.1 0.4Ohio 141.8 220.0 361.8Oklahoma 9.0 23.9 32.9Oregon 12.1 31.8 43.8Pennsylvania 520.0 2869.3 3389.2Rhode Island 14.3 55.2 69.6South Carolina 21.5 64.3 85.8South Dakota 0.3 3.0 3.3Tennessee 62.6 211.5 274.1Texas 42.7 544.9 587.7Utah 52.0 142.6 194.6Vermont 1.0 2.4 3.3Virginia 56.2 145.7 201.9Washington 15.0 344.2 359.1West Virginia 19.5 67.4 87.0Wisconsin 52.8 161.3 214.0Wyoming 0.1 2.0 2.1United States 7459.0 24432.6 31891.6* Includes Personal Income Tax, Sales Tax, and Corporate Income Tax ReceiptsSources: Milken Institute, BEA, Tax Foundation.

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Alabama 5.9 29.4 35.2Alaska 0.0 1.2 1.2Arizona 5.1 33.9 38.9Arkansas 1.0 3.3 4.3California 1398.1 3758.4 5156.5Colorado 24.1 94.0 118.1Connecticut 179.6 1005.5 1185.1Delaware 8.5 38.3 46.8Dist.of Columbia 24.8 67.2 92.0Florida 0.0 212.1 212.1Georgia 43.0 179.3 222.4Hawaii 2.1 6.4 8.5Idaho 0.1 0.4 0.5Illinois 183.9 1203.4 1387.3Indiana 160.3 1181.3 1341.6Iowa 13.9 31.8 45.7Kansas 10.3 39.8 50.1Kentucky 8.5 25.1 33.6Louisiana 2.2 14.0 16.2Maine 11.5 33.9 45.5Maryland 71.5 376.4 448.0Massachusetts 205.5 1055.2 1260.8Michigan 99.5 622.0 721.5Minnesota 29.9 106.2 136.1Mississippi 6.6 32.9 39.5Missouri 79.1 329.4 408.5Montana 2.0 3.8 5.8Nebraska 14.6 53.4 68.0Nevada 0.0 12.7 12.7New Hampshire 6.9 34.3 41.1New Jersey 1103.8 3414.3 4518.1New Mexico 4.9 16.0 20.9New York 372.7 841.5 1214.2North Carolina 255.5 912.5 1168.0North Dakota 0.0 0.1 0.1Ohio 31.3 150.3 181.5Oklahoma 4.4 15.8 20.3Oregon 8.4 17.2 25.6Pennsylvania 287.9 2366.5 2654.4Rhode Island 13.3 53.2 66.5South Carolina 15.5 55.5 71.0South Dakota 0.0 0.3 0.3Tennessee 31.9 132.8 164.7Texas 0.0 433.5 433.5Utah 41.8 94.6 136.5Vermont 0.5 1.3 1.8Virginia 33.4 85.4 118.7Washington 0.0 310.7 310.7West Virginia 13.5 56.1 69.6Wisconsin 27.3 104.9 132.1Wyoming 0.0 1.7 1.7United States 4844.8 19648.9 24493.8Sources: Milken Institute, BEA, Tax Foundation.

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Alabama 4.11 - 4.11Alaska 0.00 - 0.00Arizona 10.12 - 10.12Arkansas 2.08 - 2.08California 406.20 - 406.20Colorado 3.95 - 3.95Connecticut 2.90 - 2.90Delaware 0.00 - 0.00District of Columbia 0.04 - 0.04Florida 33.18 - 33.18Georgia 12.73 - 12.73Hawaii 0.32 - 0.32Idaho 0.99 - 0.99Illinois 51.23 - 51.23Indiana 25.58 - 25.58Iowa 4.89 - 4.89Kansas 4.41 - 4.41Kentucky 4.92 - 4.92Louisiana 3.58 - 3.58Maine 1.32 - 1.32Maryland 2.25 - 2.25Massachusetts 20.77 - 20.77Michigan 69.94 - 69.94Minnesota 7.63 - 7.63Mississippi 5.19 - 5.19Missouri 8.03 - 8.03Montana 0.00 - 0.00Nebraska 0.91 - 0.91Nevada 3.68 - 3.68New Hampshire 0.00 - 0.00New Jersey 16.84 - 16.84New Mexico 2.50 - 2.50New York 29.34 - 29.34North Carolina 17.72 - 17.72North Dakota 0.31 - 0.31Ohio 88.07 - 88.07Oklahoma 2.70 - 2.70Oregon 0.00 - 0.00Pennsylvania 41.99 - 41.99Rhode Island 0.34 - 0.34South Carolina 4.28 - 4.28South Dakota 0.28 - 0.28Tennessee 11.35 - 11.35Texas 42.71 - 42.71Utah 1.13 - 1.13Vermont 0.06 - 0.06Virginia 9.12 - 9.12Washington 14.98 - 14.98West Virginia 2.23 - 2.23Wisconsin 8.66 - 8.66Wyoming 0.07 - 0.07United States 985.63 - 985.63Sources: Milken Institute, BEA, Tax Foundation.

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Alabama 7.50 30.50 38.00Alaska 1.28 3.60 4.88Arizona 6.34 23.21 29.55Arkansas 1.81 5.32 7.13California 403.91 872.84 1276.76Colorado 4.93 24.54 29.47Connecticut 28.47 100.16 128.63Delaware 33.91 49.50 83.41District of Columbia 2.72 8.51 11.23Florida 35.64 117.77 153.41Georgia 8.61 37.94 46.56Hawaii 0.36 1.05 1.41Idaho 2.64 9.20 11.84Illinois 160.47 581.62 742.08Indiana 168.41 58.77 227.17Iowa 4.21 9.27 13.48Kansas 1.75 11.54 13.29Kentucky 0.70 2.24 2.94Louisiana 0.42 1.39 1.81Maine 7.81 23.11 30.92Maryland 21.63 73.17 94.80Massachusetts 47.10 130.76 177.86Michigan 21.36 240.28 261.64Minnesota 10.03 123.18 133.21Mississippi 0.19 1.03 1.22Missouri 33.35 141.09 174.44Montana 0.44 1.71 2.15Nebraska 2.19 7.41 9.60Nevada 0.00 17.43 17.43New Hampshire 2.07 6.43 8.49New Jersey 161.95 466.78 628.74New Mexico 21.40 74.42 95.82New York 112.25 406.53 518.78North Carolina 29.15 111.66 140.81North Dakota 0.00 0.00 0.00Ohio 22.44 69.78 92.22Oklahoma 1.84 8.09 9.92Oregon 3.64 14.59 18.23Pennsylvania 190.06 502.81 692.87Rhode Island 0.70 2.04 2.74South Carolina 1.67 8.82 10.49South Dakota 0.00 2.66 2.66Tennessee 19.36 78.70 98.06Texas 0.00 111.46 111.46Utah 9.08 47.97 57.05Vermont 0.39 1.05 1.44Virginia 13.70 60.33 74.02Washington 0.00 33.46 33.46West Virginia 3.84 11.27 15.11Wisconsin 16.86 56.39 73.25Wyoming 0.00 0.28 0.28United States 1628.58 4783.68 6412.26Sources: Milken Institute, BEA, Tax Foundation.

Corporate Income Tax Receipts by StateBiopharmaceuticals, 2003


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Biopharmaceutical Innovation Pipeline

Innovation occupies an exceptionally important role in the development and manufacturing of biopharmaceuticals. This chapter presents a broad-spectrum perspective on the nature of the U.S. biopharmaceutical industry innovation pipeline from its origins and distinguishing features to the numbers that reflect the ability of a state to capitalize on its strengths in knowledge and inventiveness. It begins with the background and significance of innovation in America’s overall biopharmaceutical sector, then moves on to detail the statistics that describe state performance in key measures of the present-day innovation pipeline, concluding with an overall summary of their relevance.

Origins and DistinctionThe beginnings of the U.S. pharmaceutical sector and its approach to innovation were heavily influenced by two major factors: industrial and geographic. For about one century following its emergence as a sizable economic force in the mid-19th century, pharmaceutical manufacturers in America essentially operated as a subsector of the chemicals industry. Along with chemical development and manufacturing, the pharmaceutical industry was distinctly shaped by advances in chemical engineering and basic chemistry emanating from Europe, especially Germany. Some of America’s most commercially successful pharmaceutical firms, with Pfizer and Merck among the clearest examples, hail from this period and were initially German in origin. A revealing indication of the significance of German influence on the industry is illustrated by the first association in the U.S. dedicated to quality assurance in pharmaceutical production: New Yorker Pharmazeutischer Leserverein—a name (perhaps even more tellingly) that was quickly modified to Deutscher Pharmazeutischer Leserverein.16

BasicResearch

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The Linear Model of Innovation

Sources: Donald Stokes, Milken Institute

For most industries, a “linear model” of innovation prevailed. Under this approach to innovation, the stages of creating a novel product or technology are distinct, moving in sequential fashion without interrelation to one another. As a result, there are often significant gaps between the activities of basic and applied research when this approach is used. Moreover, the process by which the underpinning science eventually leads to the creation of tangible new products tends to be lengthy.

This type of sequential, segmented approach to innovation did not lend itself to the creation of new pharmaceutical products, a reality that became particularly apparent during the latter half of the 19th century, which witnessed growth in the scientific complexity and social urgency for developing new medicinal compounds. As economic advancement in the wake of the industrial revolution brought about such factors as population growth, urbanization, and increased access to and demand for

Biopharmaceutical Innovation PipelineV.

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quality health care, a swelling need arose to create medicinal products that were at once scientifically advanced as well as capable of addressing immediate health concerns. One of the unique qualities that characterized the emergence of pharmacological research in Europe and America at this time was its dualistic focus on both basic and applied sciences. Pharmaceutical research in America began to move away from what until then was (and for many other fields still is) the typical approach toward product innovation.

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Sources: Donald Stokes, Milken Institute

Scholar Donald Stokes has credited the work of the leading biochemical researcher of the era, Louis Pasteur (1822-1895) with epitomizing this unique hybrid approach to innovation, which simultaneously interweaves basic and applied science.17 Stokes identified the Pasteur/biochemical approach to innovation as so unique that it stands out on its own as a single quadrant in a four quadrant comparative grid (see the preceding diagram).

The notion of “Pasteur’s Quadrant” comes from that observation that in conducting the sort of work that Pasteur did—finding ways to inoculate against anthrax and chicken cholera; developing a cure for and prevention of rabies—the French researcher found himself continually absorbed and guided by the dictates of both fundamental and applied science. This approach to innovation might at first blush seem obvious in an era where we expect scientific sophistication from the “wonder drugs” that cure all variety of ills. Yet at the time of the formation of a pharmaceutical sector in America and Europe, this model of innovation was quite unique. Famous inventors of the age, individuals like Thomas Edison,


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were focused purely on applied research whereas at the other extreme, in classically scientific fields such as physics, the emphasis was on pure science with little heed to practical applications. In the realm of pharmaceutical discovery, however, both research directions propelled innovation forward.

In the years since America’s pharmaceutical industry was formed in its crucible period of the late 19th century, the nature of innovation in the sector has retained its procedural orientation toward fundamental and applied experimentation. Yet the demands on research have evolved considerably. As illustrated in the diagram below, what was once a process characterized by (according to today’s standards) relatively limited complexity and serendipitous observation, has since evolved into one distinguished by extraordinary complexity and a correspondingly high degree of research specialization. In a sector that now can truly be considered an amalgamation of the biotechnology and pharmaceutical disciplines, biopharmaceutical research delves into the phenomenally intricate realms of addressing medical issues at the molecular level.

As the example of Pasteur and his research approach illustrate, the science of biology was always closely tied to pharmaceutical innovation. Innovation in pharmaceutical products, however, was influenced more by advances in chemical rather than biological science until the appearance of biotechnologies in the 1970s. The concept of biotechnology is actually not as new as this change in the role of scientific disciplines suggests. Hungary’s Károly Ereky brought forth the term “biotechnology” in 1919 (in the original German: “biotechnologie”) and its defining conceptualization of products made “from raw materials with the aid of living organisms.”18 Much of the promise of biotechnology was not realized until about one-half century later, when exciting new discoveries and applications in molecular biology came on the scene.

University laboratories in California’s San Francisco Bay Area took the lead in the crucial early biotechnology breakthroughs. Most notably, in 1972, Stanford biochemist Paul Berg managed to effectively paste together two strands of DNA to form a hybrid molecule. By the next year, his Stanford colleagues Stanley Cohen and Annie Chang along with U.C. San Francisco’s Herbert Boyer, devised a way to produce the world’s first recombinant DNA organism. The teams’ process recombined DNA in desired configurations that when inserted into the DNA of reproductive bacteria, brought to life what are essentially molecular manufacturing plants. These cornerstone developments in genetic engineering provided the basis for the biotechnology and biopharmaceutical industries of today.


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The biopharmaceutical sector that has since emerged is one with extraordinary research demands and, at the same time, phenomenal research promise. Diseases and debilitating conditions that defied effective remedies for centuries are now increasingly treated with satisfying results. Powerful therapeutics for such ancient threats to human health as cancer and newer ones such as AIDS, are the net result of today’s biopharmaceutical innovation pipeline. This innovation pipeline is on the road to developing cures for these and other serious diseases.

The following discussion reviews the Milken Institute’s biopharmaceutical innovation pipeline index for the 50 states: the first compilation of its kind to be produced at this scale and depth. Although the index itself is an entirely novel creation, the methodology underpinning its findings is backed by the Institute’s extensive experience in modeling and analyzing state and regional statistical data, especially in the areas of knowledge-based economics and, more specifically, the impact of life science-related industries on regional economic growth and prosperity. The index illuminates important facets of the biopharmaceutical sector’s innovation inputs and outputs throughout the United States. Overall, the index and its component measures serve as report cards on how states fare in the highly competitive, knowledge- and capital-intensive field of biopharmaceutical research and innovation. Its purpose is to give biopharmaceutical researchers, business leaders and policy makers a basis for improved understanding of state-based industry performance with a look to the future of biopharmaceutical innovation in the nation.


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The Biopharmaceutical Innovation Pipeline IndexThe term “biopharmaceutical innovation pipeline” refers to the output measures of a region’s research, financial and human capital infrastructure that reflect its ability to capitalize on its strengths in biopharmaceutical knowledge and creativity. A well-built biopharmaceutical innovation pipeline is essential for a state to have a competitive advantage and sustain long-term growth in the biopharmaceutical industry. The better the innovation pipeline, the more likely viable biopharmaceutical product breakthroughs will occur. The essential elements of an innovation pipeline are a suitable workforce, timely funding and grants, and strong research incentives. Commercialized biopharmaceutical products open a wealth of opportunity for health care advances, in addition to increasing the tax base and generating high-wage jobs. The biopharmaceutical innovation pipeline index accesses a variety of publicly-available sources for innovative breakthroughs and quantifies the data in a numeric indicator. This section of the report explores the innovation pipelines of the 50 U.S. states with a view toward determining each state’s capacity to create and commercialize biopharmaceutical innovations. It focuses on comparing major biopharmaceutical states that lead in pharmaceuticals, biotechnology and related socioeconomic assets. The comparison highlights leading states’ strength in each biopharmaceutical index indicator. Washington D.C.’s statistics are also provided in each element as references. The discussion presents a brief description of each indicator, explains why each indicator is important in fostering a climate of innovation and gives a summary of the comparisons among states. Even with the focus on top performing states, all states can benefit from the information generated by the index.

The biopharmaceutical innovation pipeline index covers four areas: biopharmaceutical research funding, biopharmaceutical risk capital funding, biopharmaceutical human capital and workforce, and biopharmaceutical innovation output.

• Biopharmaceutical research funding is usually granted to inventors, scientists and engineers who conduct R&D of biopharmaceutical products. Research funding plays a vital role in initializing new medical developments that can lead to pharmaceutical commercialization.

• A state’s biopharmaceutical risk capital funding determines the success rate it will have converting basic and advanced research into commercially viable biopharmaceutical products and services.

• In the biopharmaceutical industry, the most important intangible asset is human capital and workforce. Educated and capable biopharmaceutical workers such as biochemists, biophysicists and biological technicians are relatively rare and highly mobile. The intensity of the biopharmaceutical workforce refers to the depth of biopharmaceutical talent on the ground.

• Biopharmaceutical innovation output is a clear-cut indicator of regional muscle in the biopharmaceutical industry and its long-term prosperity. Innovation output demonstrates what tangible biopharmaceutical assets are coming out in the region today and tomorrow. By measuring these biopharmaceutical indicators we are able to assess the effectiveness of policymakers and other stakeholders in transforming regional biopharmaceutical assets into regional wealth.


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MethodologyThe methodology section identifies the data sources and procedure by which the index was built. Our organizing principle for this study was to measure which states are better equipped with a biopharmaceutical innovation pipeline.

The data analysis was conducted for all 50 U.S. states yielding performance measures for biopharmaceutical innovation pipeline infrastructure and innovation output. In the narrative, however, we focused on the top ranking states that showed the greatest specialization and concentration of biopharmaceutical activities. We described the top 10 states’ innovation pipeline performance and their competitive advantages in each element of the composite index. To compare the relative strength of each state’s biopharmaceutical research funding, we scaled out each component by population, employment or gross state product (GSP) and indexed it to the top scoring state, which received a score of 100. After such adjustments, we compared the relative scores of the 50 states and ranked them. In building each composite index (research funding, risk capital, human capital and workforce, and biopharmaceutical innovation output) as well as the biopharmaceutical composite index, we gave weight to each component based on the Institute’s assessment of its importance and contribution. Many previous studies based their findings solely upon absolute measures. By converting them to relative measures, a more accurate representation of the richness of the states is revealed.19 For example, because biopharmaceutical research funding is critical for innovation, this composite received an overall weight of 30 percent. Further, within this composite, industrial R&D received the heaviest weight, 40 percent, in order to reflect its relative importance to innovation in the industry.

The three major sources of data used to compile and analyze the seven components of the biopharmaceutical research funding section were the National Science Foundation (NSF), National Institute of Health (NIH) and the Small Business Administration (SBA). NSF funding to the biopharmaceutical sector was collected from NSF data banks. NSF data includes industrial and academic R&D funding support. National Institutes of Health’s database was employed to obtain total NIH funding and NIH funding to the biopharmaceutical sector. STTR and SBIR statistics were obtained from the office of advocacy, a department of the Small Business Administration.

The funding data analysis for the 50 U.S. states describes the dynamics of the biopharmaceutical industry. To compare the relative strengths of each state’s biopharmaceutical entrepreneurial setting, we used relative growth rates where the U.S. average equals 100, or scaled out a component by Gross State Product (GSP), such as California’s biotech venture capital investment per $100,000 GSP. After these adjustments, we compared the relative values using our scoring and ranking systems. Biotech venture capital-related data used and compiled in this section came from PricewaterhouseCoopers/Venture economics, a division of Thompson Financial. It includes the investment activity of professional venture capital firms with or without a U.S. office, SBICs, venture arms of corporations, institutions, investment banks and similar entities whose primary activity is financial investing. Where there are other participants such as angels, corporations and governments in a qualified and verified financing round, the entire amount of the round is included.

For the purpose of analyzing the biopharmaceutical human capital and workforce components, we focused on core assets—biopharmaceutical graduate students, its bachelor’s degrees, its degree-granting institutions, biological scientists, biochemists and biophysicists, microbiologists, and biological


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technicians. Three indicators were used to measure biopharmaceutical human capital capacity, and the other three were intended to gauge biopharmaceutical workforce of each state. In order to screen the purely biopharmaceutical workforce, we did not include medical-oriented or chemical-based occupations such as medical scientists, epidemiologists, biomedical engineers, chemical engineers and chemical technicians. Statistics of the human capital and workforce section came mainly from public sources. Data on graduate students, bachelor’s degrees and degree-granting institutions came from the NSF and workforce statistics were provided from the U.S. Bureau of Labor Statistics (BLS).

In the biopharmaceutical innovation output section, we explored 14 components from four different types of statistics—U.S. Food and Drug Administration (FDA) new drug approvals, FDA clinical trials, Tech Fast 500 companies in the biopharmaceutical industry, and biopharmaceutical patents. FDA clinical trials data included three components (phase I, phase II and phase III) based upon their different purposes. Biopharmaceutical patent statistics covered nine components: biopharmaceutical patents issued, biopharmaceutical patent citations, biopharmaceutical patent share in total patents, percent growth in biopharmaceutical patenting, biopharmaceutical current impact index (CII), biopharmaceutical technological strength, biopharmaceutical technological cycle time, biopharmaceutical science linkage and biopharmaceutical science strength. FDA was the data source for new drug approvals and clinical trials. The Technology Fast 500 company list was obtained from Deloitte’s web database.20 Technology Fast 500 companies must meet the following criteria: own proprietary technology that contributes to a significant portion of the company’s operating revenues or devotes a significant proportion of revenues to the R&D of technology; meet minimum operating revenue requirements of $50K in 1998 and $1 million in 2002; be in business a minimum of five years; and headquartered in the U.S. or Canada. For the most part, these are firms with one location. Technology Fast 500 uses the location of the parent company for firms with multiple locations. Patents are generally filed in the state of the inventor’s declared residence, however, firms with several locations throughout the country typically file their patents in the state of the company’s headquarters. Therefore, patent data in states such as New Jersey, which host many biopharmaceutical companies, tends to be higher, since all of their patents are filed there regardless of the actual state of discovery. CHI Research, a worldwide leader in intellectual property consulting, was the source for a series of biopharmaceutical patent data.

Biopharmaceutical Research Funding

Background and RelevanceBiopharmaceutical research funding is the first step in the innovation pipeline because it frequently determines the direction of later development and commercialization. Thus, levels of research funding are generally accepted as reliable indicators of a region’s future innovation capability.21 A region with abundant biopharmaceutical research funding has a comparative advantage in attracting biopharmaceutical workforce, biopharmaceutical companies and subsequent financial capital for biopharmaceutical commercialization.

The biopharmaceutical sector depends on long-term basic research supported by research funding and grants. Basic biopharmaceutical research takes place at biopharmaceutical research facilities and academic research institutions, by scientists and inventors with the constant support of public funding from National Institute of Health (NIH), National Science Foundation (NSF), Small Business Administration (SBA), and other academic and public institutions.


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Biopharmaceutical research funding plays a steady role in basic and applied research, and commercialization of new products and medicines. Lengthy and costly biopharmaceutical approval processes take, on average, 12-15 years to go from initial—or preclinical—development to commercial approval,22 which needs continual feedback from applied research and product development. Biopharmaceutical commercialization also tends to have a close relationship with research funding and funding organizations. The ability of new products to be brought to market depends upon abundant and ongoing research funding.

On the global scene, the United States occupies the leadership position prompting foreign biopharmaceutical companies to move their R&D facilities and labs to this country.23 The U.S. biopharmaceutical industry is expanding rapidly, similar to the pace exhibited by the computer technology and telecommunication industries during the last two decades. Just as research funding played an important role in creating and growing computer and telecommunication clusters, so it is now taking a crucial part in building up biopharmaceutical clusters in the U.S.

In this study, the Research Funding Index consists of seven components considered to be significant incentives for initializing basic and applied research, product development and commercialization in the biopharmaceutical industry. The components introduced are biopharmaceutical firms’ investment in R&D (industrial R&D), total NIH funding, NIH funding to the biopharmaceutical industry, academic funding of biopharmaceutical research (academic R&D), NSF funding to the biopharmaceutical sector, Small Business Innovation Research (SBIR) funding to life sciences, and Small Business Technology Transfer (STTR) funding to life sciences.

The industrial R&D measure refers to the investment of funds in research and development by private commercial firms and is an indicator of the role of industry R&D in a state’s economy.24 It is particularly significant due to its focus on applied R&D leading to innovative discoveries. Substantial biopharmaceutical funding of R&D ensures regional vitality in the biopharmaceutical industry and its output. In 2003, an estimated $27.4 billion was invested in R&D by biopharmaceutical companies.25 Latest figures from the NSF show that total industrial R&D to the biopharmaceutical sector for the 50 states averaged $54 per capita in 2002. Many biopharmaceutical companies less than five years old are diligently investing in industry R&D and new drug development research.26

The National Science Foundation (NSF) is a leading public investor in intellectually creative people benefiting the technological progress of the nation. For more than 50 years, the NSF has initiated and supported scientific and engineering research and programs through grants and contracts to strengthen research potential and educational programs at all levels, the impact of research on industrial development and the general welfare.27 The NSF provides grants and contracts to strengthen research potential and educational programs at all levels to academic and research institutions. In 2003, NSF funding to the biopharmaceutical sector accounted for about 4.3 percent of total NSF support to academic and research institutions, or roughly $210.8 million in 2003. As a result, NSF financial assistance of world-class biopharmaceutical scientists and their companies and research institutions, has led to biopharmaceutical innovation breakthroughs.

National Institutes of Health (NIH) is the largest single research funding agency. It released $21.6 billion to a variety of health-related research in 2003. NIH research funding that flowed into biopharmaceutical


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research amounted $9.0 billion that same year. NIH plays a pivotal role in igniting biopharmaceutical research initiatives and elevating discoveries by supporting regions with sufficient research facilities to attract talent and additional funds. NIH plays a more significant role in funding biopharmaceutical research than does NSF, because the former is fully devoted to life sciences and related fields while the latter contributes to all basic science and engineering.

Investment in academic R&D demonstrates the importance of university research to the biopharmaceutical industry as well as the capacity of each state’s university system to support that innovation. Academic R&D focuses on basic rather than applied research, thus it is particularly significant to the biopharmaceutical industry, which requires long-term funding before the commercialization stage. In 2002, academic R&D expenditures in the biopharmaceutical sector totaled $18 billion in the U.S. Industrial R&D may fund university and research institutions directly.

The Small Business Innovation Research (SBIR) award is a federal program designed to support private sector R&D through a set-aside program allocated for cutting-edge technology at small businesses, such as start-up companies, that have not yet become commercially applicable. SBIR awards are granted based on need and new ideas that have commercialization potential. SBIR candidate firms must meet certain criteria. They must be for-profit, American-owned companies, independently operated with no more than 500 employees, performing cutting-edge R&D and addressing the nation’s most critical scientific and engineering needs. SBIR awards to the life science industry broadly include biotech, pharmaceutical and other biomedical related sectors. SBIR awards raise the level of entrepreneurial creativity among small biopharmaceutical firms and provide them with opportunities to commercialize new knowledge not yet viable. In 2003, SBIR awards of $507 million were granted to the life science sector in the U.S.

The Small Business Technology Transfer (STTR) program is designed to extend the participation of small businesses, as well as university and other non-profit research institutions that have a formal collaborative relationship with a small business concern, in federal R&D and encourage private sector commercialization of technology with federal assistance. This indicator measures the magnitude of federal investment in the country’s small businesses and research institutions.28 The STTR award program plays a pivotal role in small biopharmaceutical firms and research organizations while helping to strengthen their scientific and innovative capacities. Latest figures illustrate that STTR awards released to the life science sector were $30.3 million in the U.S., or $0.31 for every $100,000 of Gross State Product.

State FindingsThe biopharmaceutical research funding composite index reflects all seven index components and their aggregate scores. The composite index’s ranking can be subdivided into four groups: top 10 states, second tier states (ranking 11-25), third tier states (ranking 26-40), and bottom tier states (ranking 41-50). Top 10 states include Massachusetts (93.4 points), Connecticut (89.4 points), Maryland (87.2 points), Pennsylvania (82.9 points), Washington (81.2 points), North Carolina (80.6 points), California (79.7 points), New Jersey (79.6 points), Missouri (78.7 points), and Vermont (77.5 points). These states have an advantageous position in research funding for basic and applied biopharmaceutical research.


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On the biopharmaceutical research funding composite index, Massachusetts is ranked first, scoring 93.4 out of 100 by achieving the most points in total NIH funding per capita, SBIR awards to life sciences per $100,000 GSP, and STTR awards to life sciences per $100,000 GSP. Massachusetts’ rich mix of biopharmaceutical assets is poised to attract both public and private funding for long-term biopharmaceutical basic research and its interactive development.

Second-ranked Connecticut is among the top five states in four components of the index: total NIH funding per capita, biopharmaceutical NIH funding per capita, biopharmaceutical academic R&D per capita, and industrial biopharmaceutical R&D per capita. Key Connecticut-based academic and research facilities include Yale University, University of Connecticut Medical Center at Farmington and Rensselaer at Hartford. Top pharmaceutical companies such as Pfizer Inc., Bayer Corp., Bristol-Myers Squibb and Boehringer Ingelheim Pharmaceuticals, all have major R&D operations in the state. Connecticut maintains a balanced structure in its biopharmaceutical research funding from government, academia and industry. The balanced structure is a good sign of stable growth for Connecticut’s biopharmaceutical industry. The following bar chart depicts the top 10 states with their scores on the biopharmaceutical research funding index.

VTMONJCANCWAPAMDCTMA

95

90

85

80

75

Level

Source: Milken Institute

Biopharmaceutical Research FundingTop 10 States, 2004

The following table depicts all 50 states on the biopharmaceutical research funding index, including their individual rank and score.

Maryland ranked third on the biopharmaceutical research funding composite index. Maryland’s relative advantage came from its attractiveness to federal funding sources such as NIH funding, NSF funding and SBIR awards. Its proximity to a wide array of federal agencies makes the Maryland-D.C. area a strategic locale for federal funding. Another clue to Maryland’s biopharmaceutical funding potential is found in its strong medical schools, life science research institutes and preeminent hospitals. Johns Hopkins Hospital (MD) has maintained its top position in the U.S. for several years29 and the Maryland-D.C. complex possesses outstanding medical schools at the University of Maryland and Georgetown


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University.30 Maryland ranked first in biopharmaceutical academic R&D per capita in part due to its excellent research-based medical schools.

Pennsylvania, scoring 82.9 points out of 100, ranked fourth on the biopharmaceutical research funding composite index. Pennsylvania’s strength in biopharmaceutical research funding comes from industrial R&D to biopharmaceuticals (4th), total NIH funding (8th), biopharmaceutical-specific NIH funding (7th) and academic R&D to biopharmaceuticals (10th). Pennsylvania is home to world-renowned academic and pharmaceutical research institutes that play a significant role in attracting NIH funding and academic R&D to academic and research institutes such as the Pennsylvania State University System, University of the Sciences in Philadelphia, the Philadelphia College of Pharmacy and Science, and the Pennsylvania Society for Biomedical Research. Several major biopharmaceutical companies, although not headquartered there, perform their major functions in Pennsylvania. This accounts for how the state gained a substantial amount of academic R&D in biopharmaceuticals.

State Rank Score State Rank Score Massachusetts MA 1 93.43 Michigan MI 26 64.06Connecticut CT 2 89.41 Kansas KS 27 63.95Maryland MD 3 87.18 Montana MT 28 63.59Pennsylvania PA 4 82.94 Delaware DE 29 62.81Washington WA 5 81.17 Nebraska NE 30 61.52North Carolina NC 6 80.60 Georgia GA 31 60.16California CA 7 79.73 South Carolina SC 32 58.72New Jersey NJ 8 79.60 Tennessee TN 33 57.30Missouri MO 9 78.71 Florida FL 34 56.34Vermont VT 10 77.48 Arizona AZ 35 56.25New York NY 11 77.27 Kentucky KY 36 56.14Illinois IL 12 75.27 New Mexico NM 37 54.69Colorado CO 13 71.91 Hawaii HI 38 50.31Indiana IN 14 71.24 Maine ME 39 49.99Utah UT 15 70.27 Louisiana LA 40 49.73Iowa IA 16 69.52 Oklahoma OK 41 49.62Wisconsin WI 17 68.69 Mississippi MS 42 47.14Ohio OH 18 68.68 Arkansas AR 43 44.99New Hampshire NH 19 67.90 Idaho ID 44 40.81Virginia VA 20 67.43 Nevada NV 45 40.31Rhode Island RI 21 66.80 Wyoming WY 46 36.29Minnesota MN 22 66.64 North Dakota ND 47 35.82Alabama AL 23 65.64 West Virginia WV 48 35.18Texas TX 24 65.55 South Dakota SD 49 28.47Oregon OR 25 65.49 Alaska AK 50 25.05

State Average 62.36

Biopharmaceutical Research FundingComposite Index, 2004


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Washington is the fifth-ranked state with a research funding composite score of 81.2. Washington obtained top 10 scores in industrial R&D to biopharmaceuticals (8th), total NIH funding (3rd), biopharmaceutical specific NIH funding (10th), NSF funding to biopharmaceuticals (4th) and SBIR awards to life sciences (5th). Washington possesses a dynamic biopharmaceutical and biotech community that actively makes new biopharmaceutical discoveries. The Fred Hutchinson Cancer Research Center, University of Washington and Washington State University are the hub institutions in the state’s biopharmaceutical community.

North Carolina is ranked sixth on the research funding composite index, scoring 80.6. The state’s composite score is backed up by total NIH funding (7th), biopharmaceutical specific NIH funding (5th), academic R&D to biopharmaceuticals (5th), NSF funding to biopharmaceuticals (8th) and STTR awards to life sciences (3rd). North Carolina’s biopharmaceutical muscle is built upon its well-funded university system and the world’s largest biotech and pharmaceutical facilities. Major universities in the state include Duke University, the University of North Carolina at Chapel Hill and Wake Forest University, which provide the state’s biopharmaceutical R&D resources. Large pharmaceutical companies headquartered or co-headquartered in the state are Bayer Healthcare Biological Products, DSM Pharmaceuticals Inc., Voyager Pharmaceutical Corporation, and Novo Nordisk Pharmaceutical Industries, Inc.

Seventh-ranked California is the strongest magnet of biopharmaceutical research funding. In absolute values of the research funding index, it is the largest recipient of five out of seven biopharmaceutical research funding elements: total NIH funding ($3.4 billion), total biopharmaceutical NIH funding ($1.3 billion), biopharmaceutical academic R&D ($2.6 billion), biopharmaceutical NSF funding ($25.0 million), and SBIR awards to life sciences ($105.5 million). In relative values per capita or per $100,000 GSP, California’s scores are scaled down in most elements due to its large population and GSP size.

New Jersey, the eighth-ranked state, is an industrial R&D center for biopharmaceuticals in the nation recording the largest biopharmaceutical industrial R&D funding by both absolute value ($4.5 billion) and relative value per capita ($519). These statistics indicate that biopharmaceutical products and drugs are more actively commercialized in New Jersey than in any other state. New Jersey-based biopharmaceutical firms such as Merck & Co, Wyeth, Schering-Plough and Aventis Pharmaceuticals invest considerable R&D money. New Jersey’s superior ranking in the relative industrial biopharmaceutical statistics confirms regional effectiveness in commercializing R&D efforts and new ventures. However, New Jersey’s relatively weak performances in other elements make its composite ranking eighth with an aggregate score of 79.6 points.

The rest of the top 10 states in the research funding composite index are ninth-ranked Missouri (78.7 points), and 10th-ranked Vermont (77.5 points). Missouri achieved good scores in biopharmaceutical specific NIH funding (6th), academic R&D to biopharmaceuticals (7th), industrial R&D to biopharmaceuticals (10th), and NSF funding to biopharmaceuticals (7th). Vermont’s advantages are in total NIH funding (6th), biopharmaceutical specific NIH funding (3rd), academic R&D to biopharmaceuticals (4th), SBIR awards to life sciences (4th) and STTR awards to life sciences (2nd).

Industrial R&D in the biopharmaceutical industry was responsible for 8.5 percent of total industrial R&D in the nation in 2002, signifying the biopharmaceutical industry’s substantial position in


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the knowledge-based economy. As reported by the NSF, New Jersey received the largest amount of biopharmaceutical industrial R&D with $4.5 billion, followed by California ($3.1 billion), Pennsylvania ($1.6 billion) and Illinois ($1.2 billion). New Jersey garnered almost 29 percent of total national industry R&D in the biopharmaceutical field for year 2002.

At $519 allocated per resident, New Jersey also ranked first in terms of industrial R&D dollars in biopharmaceutical fields per capita. Connecticut ($322) was second, followed by third-place Massachusetts ($177) and fourth-place Pennsylvania ($128). These higher ranking states have large-sized biopharmaceutical companies performing vibrant R&D activities. New Jersey’s outstanding position in this component represents its relatively larger biopharmaceutical companies and their steady efforts to commercialize biopharmaceutical products. Major biopharmaceutical companies headquartered and performing R&D in New Jersey include Merck & Co., Wyeth, Schering-Plough and Aventis. It is also home to several other pharmaceutical companies that are either headquartered or have a major branch in the state. Product manufacturing and commercialization make up a major component of success for many companies in the state. These companies continue to achieve breakthroughs in medicine, providing drugs to patients suffering from disease. In addition to having the highest concentration of employment in the industry, New Jersey produces the second highest wages on a per employee basis.

National Institutes of Health (NIH) released more than $21 billion to biopharmaceutical, health care, biology and biotech-oriented research and development in 2003. California received the largest amount in the nation, $3.4 billion or 16 percent of national total NIH funding, followed by Massachusetts ($2.2 billon), New York ($1.9 billion), Pennsylvania ($1.4 billion) and Maryland ($1.2 billion). These top five states possessed 47 percent of NIH nationwide funding.

Averaged out per capita, Massachusetts received approximately $343 per capita in NIH funds for research and development activities. Except for Washington D.C., which received $389 per capita, Massachusetts ranked first among the 50 states, followed by Maryland ($236) and Washington ($125). Other top-ranked states are Rhode Island, Connecticut, Vermont, North Carolina, and Pennsylvania; each state is granted more than $100 of NIH funding per capita in 2003. As the home of NIH, Washington D.C. benefits from NIH’s abundant funding to its basic research and development.

NIH funding to the biopharmaceutical sector accounted for $9.0 billion for the year 2003. California brought in the lion’s share, $1.3 billion or 14 percent of NIH funding to biopharmaceuticals. New York, Texas and Pennsylvania followed California in this category, indicating that these states built competitive R&D infrastructures for the biopharmaceutical and biotech sectors.

Adjusted per capita, Maryland received $87 in NIH funding to the biopharmaceutical sector, the largest sum among the states in 2003, followed by Massachusetts (2nd), Vermont (3rd), Connecticut (4th) and North Carolina (5th). Considering Washington D.C.’s exceptional performance ($139 per capita), the Maryland-D.C. complex has a comparative advantage in basic biopharmaceutical research powered by the National Institutes of Health. The region is also home to many other federal funding agencies such as the National Science Foundation (NSF), National Institute of Standards and Technology (NIST), the National Naval Medical Center and the Food and Drug Administration (FDA).


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Academic R&D to biopharmaceutical fields of study amounted to almost $18 billion in 2002. California’s share, $2.6 billion, was the largest in the nation totaling more than 14 percent of biopharmaceutical-related academic R&D. The size of each state’s university system has a positive relationship with its academic R&D amount, although not necessarily with per capita funding. For academic R&D to the biopharmaceutical field, New York, Texas, Pennsylvania, North Carolina, Maryland and Massachusetts ranked highest due to their huge university structures. On the per capita scale, however, some top- 10 ranking states—Vermont, Missouri, and Iowa—had midsize university systems. Washington D.C. recorded the largest per capita biopharmaceutical academic R&D at $271 per capita in 2003. Maryland received $143 per capita, Connecticut, $119, Massachusetts, $117 and Vermont, $109. The Maryland–D.C. complex took a similar leadership position in this component as it did for NIH funding. The Maryland–D.C. complex’s advantage in public funding flows from the presence of major federal funding agencies such as NIH and NSF, as well as its large university system. The region is known for its dynamic universities and the presence of leading academic research institutes in science and technology, including the Johns Hopkins University and the constituent universities of the University System of Maryland, and the National Institutes of Health (NIH) in Bethesda, Maryland. Other major federal research facilities assist in attracting funds.

A ranking of the top 10 American research universities appears in the table below. Of the top 25 American research universities, nine are located in California, five in New York State and three in Massachusetts. Therefore, 17 of the top 25 research universities in the nation, or a full 68 percent are located within the three states that employ the greatest number of R&D-related biopharmaceutical specialists.

Rank University State

1 Harvard Massachusetts

2 MIT Massachusetts

3 Stanford California

4 Columbia New York

5 Cornell New York

6 Johns Hopkins Maryland

7 U. of Pennsylvania Pennsylvania

8 Duke North Carolina

9 UC Berkeley California

10 Yale ConnecticutSource: Annual Report from the Lombardi Program on Measuring University Performance, Nov. 2003

Top American Research Universities2003

National Science Foundation (NSF) funding to the biopharmaceutical field accounted for $211 million in 2003. California’s share reached 12 percent of the national total, or $25.0 million. Other states that received considerable amounts of NSF funding to the biopharmaceutical field were New York ($15.5 million), Massachusetts ($11.2 million), Texas ($10.0 million), and North Carolina ($9.6 million). These states with their extensive university systems were awarded the lion’s share of NSF funding to biopharmaceutical research.


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Montana was the top-ranking state with NSF funding to biopharmaceutical research at $5.6 per $100,000 of GSP in 2003. Montana’s strength lay not in its volume of funding ($1.2 million, 35th among 50 states), but its relatively small GSP ($21.9 billion, 47th among 50 states). Nebraska, Iowa and Rhode Island were also among the top 10 states, benefiting from their smaller GSPs. Maryland ranked second with an indexed earning of $4.5 in 2003. Massachusetts’ indexed earning was $4.0, and Washington’s was $3.9, ranking those two states third and fourth, respectively. Nebraska ($3.8), Connecticut ($3.6), Missouri ($3.6), North Carolina ($3.5), Iowa ($3.5) and Rhode Island ($3.5) were also among the top 10 states in this category. Washington D.C. received a good score ($3.7) and would have ranked fifth were it included in the ranking structure.

Strong NSF funding to the biopharmaceutical field is a good indication of a state’s comparative strength in biopharmaceutical research beyond academic boundaries because NSF funding is released to universities, government institutions and business as well. Top-ranking states in this category host a variety of biopharmaceutical businesses and related institutes that carry out basic and applied research, and focus on commercialization of the outcomes.

Some $507 million in Small Business Innovation Research (SBIR) awards were granted to various life sciences businesses in the U.S. in 2003. Massachusetts ranked first for SBIR awards granted to the life sciences per $100,000 GSP for that year. Massachusetts’ indexed statistic was $24.8, followed by Maryland and New Hampshire at $19.8 and $14.3 per $100,000 GSP, respectively. Vermont ($12.1) and Washington ($10.7) were also among the top five states in this measure. In absolute terms, California’s was the biggest recipient of SBIR awards with $105.5 million or a 21 percent national share. Massachusetts ($69.2 million), Maryland ($37.2 million) and New York ($28.3 million) followed California in the amount of SBIR awards to life science businesses.

In the case of Small Business Technology Transfer (STTR) awards to biopharmaceutical firms per $100,000 GSP, Massachusetts ranked first in the nation for 2003. Statistically, Massachusetts received $1.87 STTR dollars to biopharmaceutical firms per $100,000 GSP. Vermont ranked second with an indexed statistic of $1.41 in 2003. North Carolina and Minnesota ranked third and fourth, respectively, with $0.76 and $0.73 in STTR awards per $100,000 GSP. Washington D.C.’s score in this relative measure was quite high ($0.83). In absolute terms, Massachusetts’ was still the largest with more than 17 percent of the national total or $5.2 million in STTR awards, double of second-place New York ($2.6 million) and third-place California ($2.4 million).

Massachusetts’ relative strength in SBIR and STTR awards to biopharmaceutical firms illustrates that its smaller-sized biopharmaceutical businesses were recognized for their scientific and innovative efforts. In addition, Massachusetts maintained the regional competitiveness to attract SBIR and STTR, which creates more opportunities for collaboration with R&D units of biopharmaceutical businesses, easy access to a talented labor pool and a highly entrepreneurial workforce.31


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Biopharmaceutical Risk Capital Funding

Background and RelevanceAccess to financial capital is a primary issue for small businesses and entrepreneurs. Risk capital funding is the financial engine for product commercialization. This kind of funding is especially pivotal for new firms or spin-offs, the best breeding grounds for new ideas. Venture capital is commonly considered the most influential risk capital funding because it targets new technologies and dynamic entrepreneurs. Thus, venture capital location is a key indicator of commercialization activity for some new biopharmaceutical technologies and business concept innovation.32

Venture capital is often invested in young and fast-growing businesses that demonstrate potential for a high return on investment. This important source of equity funding has a history of funding new technologies and innovations. They are among the most risky of investments, but can offer high returns. Venture capitalists supported fledgling semiconductor firms and personal computers, followed by the disk-drive industry and biotechnology in the early 1990s, software in the mid-1990s and dot-coms at the end of the decade.33 Leading biotech and biopharmaceutical firms such as Genentech and Amgen are among those who benefited from early-stage venture capital investment. Some traditional pharmaceutical firms have their own venture capital funds that also invest in biotech companies.

Venture capital funding in the biopharmaceutical industry shows steady growth for the last few years. Although total U.S. venture capital decreased around 30 percent in the 2001-2003 period, venture capital funding in biotech and the biopharmaceutical industry increased more than 17 percent during that same period.

The Index’s Biopharmaceutical Risk Capital Funding component deals with venture capital investment in the biotech sector, which is an indication of the business climate for biopharmaceutical start-ups and biotech entrepreneurial activities. The risk capital funding component evaluates the 50 states’ biopharmaceutical entrepreneurial culture by numerical analysis of risk capital measures like biotech venture capital investment growth and biotech venture capital per $100,000 GSP.

Venture capital investment in biopharmaceutical research is evaluated on three features: biotech venture capital investment growth (2001-2003), growth of biotech companies receiving venture capital, and biotech venture capital dollars per $100,000 GSP. All these venture-capital components are important indicators for measuring current biopharmaceutical venture activities in each state. Although venture capital funding has been in a slump since the technology-stock-driven market bubble in 2000, it remains a pivotal force for investing in new businesses, especially those that operate knowledge-intensive industries like biopharmaceuticals, biotech and other life sciences.

State FindingsOn the biopharmaceutical risk capital composite index, Massachusetts earned a score of 90.1 out of 100, which placed it first among the 50 U.S. states. Massachusetts’ biotech venture capital muscle on the composite index comes from its strong achievement in biotech venture capital investment per $100,000 of GSP. Massachusetts’ relative biotech venture capital size per $100,000 GSP ($181.2) is more than six times greater than the national average ($28.2). Massachusetts’ relative growth rates also exceeded the national averages in both biotech venture capital dollars (MA:U.S. = 125:100) and biotech companies receiving venture capital (MA:US = 109: 100).


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New Jersey ranked second on the composite index with a score of 83.9. New Jersey’s score was powered by its biotech venture capital investment relative growth (5th) and biotech venture capital investment per $100,000 of GSP (3rd). New Jersey’s relative growth in companies receiving biotech venture capital was below the national average, which demonstrates that few biopharmaceutical and biotech companies received new investment for the 2001-2003 period.

California’s third-ranked position was aided by its place as the second largest recipient of biotech venture capital investment per $100,000 GSP. California’s biopharmaceutical industrial sector is a significant force in the state’s economy with a deep bench of companies playing a part in attracting biotech venture capital investment into the state. Pfizer Global Research & Development in La Jolla, Amgen in Thousand Oaks, Allergan Inc., headquartered in San Diego, Genentech Inc., Chiron Corporation, Abbott Laboratories, Bayer HealthCare Biological Products Division in Berkeley, and ALZA Corporation are part of the state’s vital source of biopharmaceuticals.

Colorado (4th), Rhode Island (5th), Washington (6th), North Carolina (7th), Maryland (8th), Connecticut (9th) and Maine (10th) make up the rest of top 10 states on the biopharmaceutical risk capital composite index.

MECTMDNCWARICOCANJMA

95

90

85

80

75

70

Level


Biopharmaceutical Risk Capital FundingTop 10 States, 2004


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State Rank Score State Rank Score Massachusetts MA 1 90.14 Virginia VA 26 33.84New Jersey NJ 2 83.88 Tennessee TN 27 31.44California CA 3 82.86 Nebraska NE 28 28.96Colorado CO 4 80.11 Hawaii HI 29 22.23Rhode Island RI 5 79.97 Florida FL 30 21.96Washington WA 6 79.48 Indiana IN 31 21.19North Carolina NC 7 79.24 Kentucky KY 32 14.96Maryland MD 8 79.17 Delaware DE 33 12.65Connecticut CT 9 75.71 Alaska AK 34 0.00Maine ME 10 75.22 Arkansas AR 34 0.00Ohio OH 11 74.03 Idaho ID 34 0.00Pennslyvania PA 12 73.41 Iowa IA 34 0.00Utah UT 13 70.44 Kansas KS 34 0.00Arizona AZ 14 65.35 Louisiana LA 34 0.00New York NY 15 64.79 Mississippi MS 34 0.00Texas TX 16 64.18 Montana MT 34 0.00Illinois IL 17 62.21 Nevada NV 34 0.00Minnesota MN 18 61.18 North Dakota ND 34 0.00Georgia GA 19 61.07 Oklahoma OK 34 0.00Michigan MI 20 58.45 Oregon OR 34 0.00New Mexico NM 21 58.33 South Carolina SC 34 0.00Alabama AL 22 47.48 South Dakota SD 34 0.00Wisconsin WI 23 41.03 Vermont VT 34 0.00New Hampshire NH 24 39.35 West Virginia WV 34 0.00Missouri MO 25 35.17 Wyoming WY 34 0.00

State Average 37.39

Biopharmaceutical Risk Capital FundingComposite Index, 2004

For 2001-2003, an average of $2.7 billion in venture capital was invested annually in life science firms in the U.S., including 249 biotech companies. Biotech’s share of venture capital investment was significant. Biotech firms received 10.1 percent of the total venture capital dollars and made up 7.2 percent of the companies that received venture capital investment from 2001 through 2003. Venture capital investment flowed into biopharmaceuticals, genetics and other life science companies that actively commercialized new ideas, products and services. Considering that biopharmaceutical-focused venture capital takes a significant share of total biotech venture capital investment, it is reasonable to adopt biotech venture capital statistics as a proxy for the biopharmaceutical venture investment index.

California was the largest recipient of biotech venture capital investment from 2001-2003, with an annual average $1.0 billion, or 38 percent of total biotech venture capital. California’s position was mainly the result of its strong biotech centers in San Jose, San Diego, San Francisco, Los Angeles and Orange County.34 Massachusetts ranked second ($497 million), followed by New Jersey ($270 million). Massachusetts’ venture capital investment targeted biopharmaceuticals and medical devices industries. New Jersey’s venture capital funding was powered by its biopharmaceutical industry. These top three states took up more than 66 percent of total biotech venture capital investment averaging $1.8 billion annually. North Carolina, Pennsylvania and Maryland attracted more than $100 million of annual average biotech venture capital.


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For 2001-2003, Ohio ranked first among 50 states in the relative growth of total biotech venture capital invested, with a relative figure 1,719.1 (U.S. average = 100.0). During that time, Ohio’s biotech venture capital investment grew 1,428.8 percent annually, most of which occurred in 2002 and 2003. In 2002, Ohio Gov. Bob Taft proposed the Third Frontier Project, which included substantial bioscience R&D funding programs. It played a pivotal role in attracting biotech venture capital investment into Ohio. The project included the Biomedical Research and Technology Transfer Trust Fund, three Bioscience Wright Centers of Innovation, Bioscience Research Parks, Ohio (Bioscience) Innovation Fund, and the (Bioscience) Business Technology Center.35 Maine ranked second in this component and its relative growth figure was 237.6 (U.S. average = 100.0). Maine’s annual average growth rate during 2001-2003 was 218.0 percent. Georgia (relative figure = 206.8) was ranked third, New Mexico (relative figure = 204.6) ranked fourth, and New Jersey (relative figure = 181.0) ranked fifth. Other top 10 states are Alabama, Minnesota, Washington, Arizona and Rhode Island.

The amount of venture capital investment is closely correlated with the number of companies that receive venture capital investment. As with the growth of venture capital investment, Ohio was ranked first in the relative growth of biotech companies receiving venture capital investment. Its relative growth figure was 237.2 (U.S. average = 100.0). In the absolute growth terms, Ohio grew 150.0 percent in the 2001-2003 time period. Arizona’s relative growth figure 198.7 (U.S. average = 100.0) ranked the state second in the nation, followed by Rhode Island (relative figure = 166.5), Illinois (157.8) and Washington (157.8). Maine, Colorado, Texas, New York and Maryland completed the top 10.

Massachusetts contains biotech, biopharmaceutical and life science venture capital investing communities that are passionate about making things happen and creative enough to continually innovate. With $181.20 in biotech venture capital investment per $100,000 GSP, Massachusetts ranked first among the 50 states. That amount is more than six times larger than the average for the U.S., the world’s biotech leader. The Boston metropolitan area is home to many venture-capital-nurtured biotech and biopharmaceutical companies that were significantly aided by VC funds in their initial growth phase.36 California, the largest recipient of total venture capital investment in biotech in the U.S., was second in this category with $77.50 per $100,000 GSP. In an earlier study of 12 U.S. metropolitan areas, the Milken Institute found that San Jose, America’s leading venture capital center, garnered more than 15 percent of total U.S. biotech venture capital for 2000-2003.37 San Diego, San Francisco and Los Angeles were also well-funded California metros in terms of biotech venture capital. New Jersey, which received about $76.70 per $100,000 GSP, ranked third. New Jersey’s strong ranking in this component is a clear illustration of how high-risk biotech and biopharmaceutical finance is supporting regional biotech entrepreneurship. Colorado and Maryland ranked fourth and fifth, respectively. In Colorado, several biopharmaceutical companies play a pivotal role in locating new venture capital investment. Colorado is home to a large number of dedicated pharmaceutical and biotech companies, including Array BioPharma, a drug discovery company headquartered in Boulder that creates a new small molecule drug, and Roche Colorado Corporation of Boulder. Among the state’s larger companies are Amgen, Inc., Sandoz, Inc., and Geneva Pharmaceuticals, one of the leading generic pharmaceutical manufacturers and marketers in the United States.


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Biopharmaceutical Human Capital & Workforce38

Background and RelevanceHuman capital is the most important intangible asset of America’s economy. A technology and science workforce is a necessary and natural extension of America’s human capital and intellectual capacity. Brainpower for innovation and the technical competence and sophistication for production are closely linked.

In today’s global economy, national greatness arises not only from the possession of or access to natural assets, but increasingly from created assets – people with new ideas and skills.39 In the current intangible economics of place, knowledge, skills, experience and innovation potential of talented individuals have greater value than capital equipment or even capital itself. A successful enterprise accesses, creates and utilizes knowledge to sustain competitive advantage. It provides the required training, information technology, direction and proper motivational systems to ensure that its employees build new knowledge and value. Regions with firms that understand and live by these dynamics are well-positioned to maximize human capital for economic development.

Knowledge workers who possess the most current skills are witnessing dramatically higher earning power than those with older skills. Differences in per capita income among states are most closely associated with the percent of the adult population that has at least a bachelor’s degree.40 Earnings in U.S. biopharmaceutical manufacturing are higher on average than all other manufacturing industry wages in the country. In 2002, production or nonsupervisory employees in biopharmaceutical manufacturing averaged $777.00 per week while those in all manufacturing industries averaged $619.00 per week. There is little seasonal fluctuation in drug production so wages remain steady.41

There are an estimated 2,500 manufacturers of pharmaceuticals and medicine in the U.S. These include companies that make pharmaceutical preparations or finished drugs; biological products, such as serums and vaccines; bulk chemicals and botanicals used in making finished drugs; and diagnostic substances such as pregnancy and blood glucose kits.42 Pharmaceutical and medicine manufacturing provided approximately 282,300 jobs in 2003, the majority of which are located in California, Illinois, Indiana, New Jersey, New York, North Carolina and Pennsylvania.43

The ongoing diffusion of information technology through the economy puts a premium on advanced technical skills. Human and intellectual capital that build a skilled workforce are the DNA of the knowledge-based biopharmaceutical industry. Pooling of specialized technology and science workforces is critical for the industry to expand and firms to grow.

Biotech industry requirements for a science and technology workforce are even more demanding than other technology-oriented industries such as information technology. Given bioscience’s long development cycle across multiple disciplinary fields, tight government regulation and larger capital investment up front, the requirement for a suitable workforce is crucial. Consider the example of Advance Tissue Sciences. The company was founded in 1988 specializing in tissue substitutes for burn victims. After 10 industrious years, the FDA approved the product in 1997.44


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The long research cycle, coupled with the complexity of coordination among multiple disciplinary fields throughout the development process can be a substantial burden to a small biotech startup. Regional science centers, backed by local research-oriented institutions (e.g., the University of California in San Diego) extend the benefit of external economies of scale. It is estimated that 95 percent of Ph.D.-holders from UCSD and San Diego State University went into private industry, whereas about 85 percent of Ph.D.s nationwide enter academia.45 It is clear that the Southern California region, both in industry and academic institutions, has formed a new culture, placing a high value on human capital and entrepreneurial spirit.

Life scientists are among the largest scientific occupations in the biopharmaceutical industry. Most of these scientists are biological and medical scientists who produce new drugs using biotechnology to recombine genetic material of, for example, animals and plants. Biological scientists study living organisms and their relationship to their environment. Biological scientists held about 75,000 jobs in the U.S. in 2002.46 Those who conduct research usually work in laboratories utilizing electron microscopes, computers, thermal cyclers and a variety of other sophisticated equipment. Biologists and bacteriologists, for example, study the effects of chemical agents on infected animals. Biochemists study the action of drugs on body processes by analyzing the chemical combination, actions and reactions involved in metabolism, reproduction, growth and heredity. Microbiologists grow strains of microorganisms that produce antibiotics. Physiologists investigate the effects of various drug compounds on body functions and vital processes. Pharmacologists and zoologists study the effects of drugs on different animals. Virologists most often grow viruses and develop vaccines. Botanists are experts in plant life; they contribute to the discovery of botanical ingredients for drugs. Other biological scientists include pathologists, who study normal and abnormal cells and tissues, and toxicologists, who specialize in the safety, dosage levels and the interactive compatibility of drugs. Medical scientists, who may also be physicians, conduct clinical research, test products and oversee human clinical trials.

Physical scientists, particularly chemists, are also important in the R&D cycle of new drug development. Organic chemists combine new compounds for biological testing. Physical chemists separate and identify substances, determine molecular structure, contribute to the creation of new compounds and make recommendations to improve manufacturing processes. Radiochemists map out the course of drugs through body organs and tissues. Pharmaceutical chemists set product and product storage condition standards and specifications; they also ensure that drug labeling and literature comply with established state and federal regulation. Analytical chemists test raw and intermediate materials and finished products to ensure quality.

Science technicians, such as biological and chemical technicians set up, operate and maintain laboratory equipment, monitor experiments, analyze resulting data and record and interpret results. Science technicians often support scientists and engineers. Chemical engineers are involved in the design of production equipment and may devise manufacturing processes. Bioprocess engineers, whose tasks are similar to chemical engineers, design fermentation vats and various bioreactors for microorganisms that will be used to produce a specific product. Industrial engineers plan the equipment layout and workflow to ensure the most efficient and effective use of plant facilities.


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The Department of Labor estimates that in 2002, about 28 percent of all jobs in pharmaceutical and medicine manufacturing were in professional and related occupations, mostly scientists and science technicians; 18 percent were in management occupations, 12 percent were employed in office and administrative support, and 3 percent in sales and related occupations. Approximately three out of every 10 jobs in the industry are in production occupations, including both low- and high-skilled jobs.47

Biopharmaceutical employment in the U.S. increased from 231,700 employees in 1983 to 406,700 in 2003. Total employment in the country also increased over the 20-year period from 90.7 million people in 1983 to 129.8 million employees in 2003. Growth in the biopharmaceutical industry workforce and total U.S. employment growth can be viewed together on the line graph below. In early 1990, biopharmaceutical employment grew at about the same rate as total employment in the country. After mid-1993, the industry’s employment growth slowed somewhat. Biopharmaceutical industry employment has grown rapidly since early 1997, outpacing total employment growth in the nation.

The Department of Labor expects the number of direct biopharmaceutical industry jobs in the U.S. to increase by more than 20 percent between 2002 and 2012, compared to 16 percent for all industries combined. Biopharmaceutical manufacturing ranks among the fastest-growing manufacturing industries in the nation. It is projected that demand for this industry’s products will remain strong, regardless of economic fluctuations.

State FindingsSeven individual inputs, measuring biopharmaceutical human capital and workforce capacity in the U.S., are analyzed in this research. These inputs calculate and benchmark the human capital stock, flow of specialists and general pools of human capital that support the industry’s scientific and technological-development activities. States that score well on this composite index have succeeded by nurturing and supporting a proportionally large base of highly trained people.

The number of employees in each state is taken into consideration in the data analysis of the majority of input measures. The top ranked states on each component input measure are all relatively small in terms of total employment. The composite score is a weighted aggregate of the seven input measures.

Delaware ranked first in the nation for biopharmaceutical human capital and workforce capacity with an average composite score of 89.21. Connecticut, with an average score of 78.96, and Maryland at 77.62, ranked second and third, respectively. Each of these states outranked biopharmaceutical heavyweights such as Massachusetts (fourth with an average score of 72.65) and New Jersey (fifth with an average score of 71.24). Those states that make up the remaining top 10 are Colorado (68.91), Montana (65.30), California (64.96), Wisconsin (63.60) and Alaska (63.33).


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Three individual input measures contributed substantially to Delaware’s overall top-ranked composite index position. It ranked first in the nation on each of these indicators, scoring well above its competition:

• intensity of biological scientists per 100,000 workers in the state in 2003 (263.09);

• intensity of biochemists and biophysicists per 100,000 workers in the state in 2003 (208.48); and

• intensity of microbiologists per 100,000 workers in the state in 2003 (54.60).

Connecticut, Maryland, Massachusetts and New Jersey score among the top 10 positions in each of the three indicators above. Wyoming and South Dakota employed no biological scientists, biochemists, biophysicists or microbiologists in 2003.

Each of the 50 states ranked by their average score on the Biopharmaceutical Human Capital & Workforce Composite Index, is shown in the table below. Bachelor’s-level education represents the first rung on the ladder of advanced learning required for much of the high-end work in any knowledge-based economy. The indicator for the percentage of bachelor’s degrees granted in biopharmaceutical studies measures the prevalence of related majors among a state’s bachelor’s degree recipients. The share of bachelor’s degrees granted in biopharmaceutical-related fields is significant because it demonstrates where professional interest lies among the college student population and the popularity of biological and medical science majors among a state’s college students. The indicator is calculated by taking the number of bachelor’s degrees granted in a state for biopharmaceutical-related fields and dividing it by the total number of bachelor’s degrees granted in all disciplines.


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State Rank Score State Rank Score Delaware DE 1 89.21 Illinois IL 26 55.50Connecticut CT 2 78.96 Louisiana LA 27 55.27Maryland MD 3 77.62 Vermont VT 28 54.90Massachusetts MA 4 72.65 Missouri MO 29 54.84New Jersey NJ 5 71.24 North Dakota ND 30 54.44Colorado CO 6 68.91 Arkansas AR 31 54.16Montana MT 7 65.30 Washington WA 32 51.70California CA 8 64.96 Ohio OH 33 51.60Wisconsin WI 9 63.60 New Mexico NM 34 51.33Alaska AK 10 63.33 Michigan MI 35 50.52North Carolina NC 11 62.61 Hawaii HI 36 50.13Pennsylvania PA 12 62.48 Tennessee TN 37 49.74Utah UT 13 62.38 Rhode Island RI 38 49.35Oregon OR 14 61.88 Mississippi MS 39 48.89New York NY 15 61.10 Alabama AL 40 47.90Idaho ID 16 60.90 Texas TX 41 46.59Maine ME 17 60.83 New Hampshire NH 42 46.45Indiana IN 18 60.60 South Carolina SC 43 44.03Minnesota MN 19 59.48 Kentucky KY 44 41.31Iowa IA 20 59.34 Arizona AZ 45 38.54Kansas KS 21 58.87 Florida FL 46 37.61West Virginia WV 22 58.39 Oklahoma OK 47 34.92Nebraska NE 23 58.05 Wyoming WY 48 30.33Virginia VA 24 55.86 Nevada NV 49 29.48Georgia GA 25 55.72 South Dakota SD 50 29.00

State Average 55.46

Biopharmaceutical Human Capital & WorkforceComposite Index, 2004

A total of 65,148 students were enrolled in bachelor’s degree programs specific to biological and medical sciences in the U.S. in 2001. This represents 5.3 percent of the total 1.2 million students enrolled in bachelor’s degree programs in the country as a whole. The top five states having the most students enrolled in biopharmaceutical-related bachelor’s degree programs are California (7,863 students), New York (4,242), Texas (3,753), Pennsylvania (3,397) and Illinois (2,986).

Those states that ranked highest for the number of students enrolled in bachelor’s degree programs related to biopharmaceuticals as a percentage of all bachelor’s degree-seeking students are Montana (1st, 7.20), South Carolina (2nd, 7.01), New Jersey (3rd, 6.85), Maine (4th, 6.65) and California (5th, 6.63). The states that made up the balance of the top 10 in the country are Louisiana (6th, 6.52), Colorado (7th, 6.35), North Carolina (8th, 6.30), Mississippi (9th, 6.24) and Maryland (10th, 6.21). The average percentage of biopharmaceutical-related bachelor’s degree program students in the U.S. is 5.28.

The percentage of people with advanced degrees is a reliable indicator of a state’s capacity to support a knowledge-based economy. States with a large portion of their populations holding advanced degrees, such as Massachusetts, Connecticut and Maryland, have economies that are well known for their knowledge intensity. Although degrees at the master’s level and higher are hardly required by all sectors


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of an economy, they are often an important qualifier for upper management positions, especially in high-tech and science fields.

The input measure is calculated by summing up the number of graduate students aged 25 to 34 enrolled in biopharmaceutical-related graduate-degree programs in each state and then normalizing it per 10,000 people of each state’s total population in that age group. The 25-to-34 age cohort was selected because current trends show that people are taking longer than the traditional four years to complete a bachelor’s degree and are taking longer breaks between completing bachelor’s and advanced degrees.

A state’s level of graduate students enrolled in biological and medical sciences provides one of the more direct indicators as to how well that state is preparing its population for the work that lies at the core of a biotech and pharmaceutical economy. A total of 79,940 students aged 25 to 34 were enrolled in biological and medical science graduate degree programs in 2001 in the 50 states. This represents 16.1 percent of the total 496,910 graduate students aged 25 to 34.

Those states having the highest biopharmaceutical-related graduate student enrollment are California (1st with 8,741 biopharmaceutical graduate students ages 25 to 34), New York (2nd with 6,274), Texas (3rd with 5,484), Massachusetts (4th with 4,795), Pennsylvania (5th with 3,973) and Illinois (6th with 3,825). This ranking, with the exception of Massachusetts, very closely mirrors the data related to bachelor’s degree student enrollment discussed earlier. Just 13.9 percent of California graduate students are enrolled in biological and medical sciences programs, less than the 16.1 percent national average. The biopharmaceutical share in the remaining states is New York (14.2 percent), Texas (16.2), Massachusetts (19.7), Pennsylvania (17.4) and Illinois (13.7).

Massachusetts ranked first among the 50 states on the number of graduate students aged 25 to 34 enrolled in biological and medical sciences programs per 10,000 people in the population (52.31), followed by Connecticut (40.61), New Mexico (34.06), Louisiana (33.78), Maryland (32.78), Iowa (30.14), Minnesota (28.84), Kansas (26.19), Pennsylvania (26.15) and Wisconsin (25.71).

Another measure included is the intensity of biological technicians. Intensity is defined as the percentage share of biological technician workers per 100,000 employees in each state. The intensity of biological technicians is a sign of a state’s attractiveness for biotech and pharmaceutical employers who want to locate in areas with large talent pools.

Alaska ranked first in the nation for the intensity of biological technicians in the state per 100,000 employees in 2003 with 307.92. Delaware ranked a distant second with 206.00, followed by Washington (3rd, 143.66), Montana (4th, 123.94), Idaho (5th, 107.91), Oregon (6th, 107.04), Wyoming (7th, 99.63), Maryland (8th, 97.39), North Dakota (9th, 85.95) and Maine (10th, 76.38).


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Biopharmaceutical Innovation Output

Background and RelevanceThe discovery of biopharmaceuticals is a very lengthy and costly, multi-stage process of testing and development, including clinical trials before they are authorized for individual use. The approving agency in the United States is the Food and Drug Administration (FDA), a division of the Department of Health and Human Services. The number of medical products (drugs and devices) that the FDA regulates exceeds 150,000 – far more than ever before. There are approximately 3,000 new drugs under development. In addition, there are greater numbers of and more diverse dietary supplements on the market than ever before. U.S. residents also have a much broader range of food choices, including more than six million food imports in 2003, with import numbers increasing rapidly.48

Clinical testing typically proceeds through three successive trial phases.49

• In Phase I trials, researchers test a new drug or treatment on a small number (20 to 80) of healthy volunteers to establish safe dosages and gather information on the absorption, distribution, metabolic effects, excretion and toxicity of the compound. To conduct clinical testing in the United States, an investigational new drug application must be filed with the FDA. Initiation of human testing often occurs outside the U.S.

• In Phase II trials, the study drug or treatment is given to a larger group of people (100-300) who have the disease or condition it is intended to treat. Phase II clinical trials are designed to see if the drug or treatment is effective and to further evaluate its safety. To provide evidence of the drug’s therapeutic benefit, it is necessary to compare its effectiveness with that of standard, medically accepted treatments (which may include a placebo).50

• In Phase III trials, the study drug or treatment is typically given to large groups of people (1,000-3,000) to firmly establish its effectiveness, uncover side effects that occur, compare it to commonly used treatments and collect information that will allow the drug or treatment to be used safely.

When developers believe they have sufficient evidence of safety and effectiveness, test results are compiled in detail and a new drug application or biological license application is submitted to the FDA. Priority review is based upon therapeutic significance at the time of application submission.

New drug development is a risky process, with many more compounds failing for every one that makes it to market. Each year, thousands of new pharmaceutical substances are tested, eventually yielding only 10 to 20 new prescription medicines.51 It is a very lengthy process. Development costs vary across drugs and treatments. Relatively new biotechnologies that are not well understood, may increase the expenses related to bringing new products and treatments to the marketplace.

State FindingsData on 14 individual indicators comprise the overall biopharmaceutical Innovation Output Composite Index. Each indicator measures and describes the key components of a state’s capacity for innovation in the biopharmaceutical industry. These indicators calculate and benchmark the determinants of


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innovation output. Various individual indicator measures, related to state findings, are discussed in detail below.

Massachusetts ranked as the top state on the 2004 Biopharmaceutical Innovation Output Component Index. To earn an index score of 100, a state would have to place first in each of the innovation output’s 14 indicators. Massachusetts’ score at 83.47 shows a very strong competitive ranking. Massachusetts’ number-one ranking is generally attributable to its position among the top five states in eight individual input measures and its above-average position in all but two. The top 10 states in the nation are shown in the vertical bar chart below. The table following this chart shows the average scores for each of the 50 states in the country.

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A number of individual indicators that comprise the overall Biopharmaceutical Innovation Output Composite Index are measured, analyzed and discussed below. We offer a brief description of the indicator, why it is important and a summary of some of the states’ positions relative to others in the nation.

The number of clinical trials in each Phase I, II and III stage is a measure of hope or anticipation for the future commercialization of a state’s innovative activity. Generally, innovative success is achieved by taking a compound through all phases of clinical trials to completion. Early detection and termination of the compounds and treatments that ultimately fail to reach the FDA or attain FDA approval will help lower costs and, by implication, improve return on investment. Product failures in the late stages of and after clinical trials seriously threaten corporate profits.

Funding for clinical research generally comes from both the federal government (through the National Institutes of Health) and private industry (pharmaceutical and biotech companies). The sponsor of the research hires physicians to conduct clinical trials. The medical care is typically provided free to patients, or they are paid a small fee to encourage participant volunteers.52


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State Rank Score State Rank Score Massachusetts MA 1 83.47 Georgia GA 26 52.12New Jersey NJ 2 81.58 Ohio OH 27 51.08Maryland MD 3 81.54 Virginia VA 28 50.71Connecticut CT 4 77.81 New Hampshire NH 29 50.55Delaware DE 5 77.06 Nebraska NE 30 49.29Pennslyvania PA 6 75.44 West Virginia WV 31 49.05North Carolina NC 7 73.72 Tennessee TN 32 48.88California CA 8 73.08 Vermont VT 33 48.68Washington WA 9 67.17 Oregon OR 34 46.40Colorado CO 10 66.39 New Mexico NM 35 45.77Minnesota MN 11 64.05 Hawaii HI 36 43.97Michigan MI 12 62.87 Montana MT 37 43.96Missouri MO 13 62.34 Oklahoma OK 38 43.78Utah UT 14 62.30 Maine ME 39 43.34Illinois IL 15 61.90 Kentucky KY 40 42.66Indiana IN 16 61.37 Arkansas AR 41 41.46Wisconsin WI 17 61.25 Louisiana LA 42 40.97New York NY 18 61.04 Mississippi MS 43 40.01Texas TX 19 58.15 Idaho ID 44 39.30Iowa IA 20 55.87 South Carolina SC 45 38.82Kansas KS 21 55.08 Nevada NV 46 38.62Alabama AL 22 54.74 South Dakota SD 47 34.88Rhode Island RI 23 53.60 North Dakota ND 48 33.38Arizona AZ 24 52.89 Wyoming WY 49 33.15Florida FL 25 52.32 Alaska AK 50 20.90

State Average 54.18

Biopharmaceutical Innovation OutputComposite Index, 2004

“The lack of patient volunteers remains the single largest obstacle to bringing new therapies to market.”53 Central and Eastern European countries are becoming increasingly popular locations for clinical research due to lower costs, access to motivated investigators and a high concentration of patients in large public hospitals.54

It is estimated that as much as 36 percent of all clinical trials now involve a genetic testing component.55 Pharmacogenomic information is being used to refine study design, improve volunteer safety and data quality, and better target patient recruitment. The FDA guidance detailing the use of pharmacogenomic data in clinical trials is expected to accelerate the development of personalized medicine.

When we calculate the sum of all three phases of currently recruiting clinical trials, California and New York tie for the top position with 1,043 in 2003. Texas is third with 990.

Our data collection and analysis also measured the clinical trials currently recruiting per 100,000 employees in each state in 2003. The top-ranked states in each clinical trial stage are all relatively small in terms of total employment.


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In Phase I clinical trials, Maryland ranked first with 9.67. Rhode Island ranked a distant second (3.31) followed closely by Massachusetts (3rd, 3.23), Delaware (4th, 3.14) and Washington (5th, 2.90). Analysis of the first phase raw data (i.e., without taking state employment into consideration) placed Maryland first with 240 currently recruiting clinical trials followed by Texas (176), New York (170), California (158), Pennsylvania (137), Ohio (106) and Massachusetts (103). Alaska and Wyoming tied for the lowest-ranked states each having two Phase I currently recruiting clinical trials in 2003.

Vermont ranked first in the nation for the number of Phase II clinical trials currently recruiting per 100,000 persons employed in the state in 2003 (27.8), followed by Delaware (24.2), North Dakota (20.7), South Dakota (19.8) and Rhode Island (19.2). California ranked first in the nation with a total of 501 Phase II clinical trials in 2003. New York ranked second (500), followed by Texas (477), Maryland (463) and Illinois (365).

Vermont ranked first in the nation again for the number of Phase III clinical trials currently recruiting per 100,000 employees in the state in 2003 (31.5). North Dakota ranked second with 29.8, followed by Delaware (23.9), Rhode Island (23.0) and South Dakota (22.5).

In 2003, our data revealed that every state in the U.S. had at least one current value in each of the three phases of clinical trials. In total, there were 9,458 Phase III clinical trials in the nation in 2003, slightly more than the 9,321 figure for Phase II clinical trials and more than four times the 2,274 Phase I clinical trials.

Following the completion of all three phases of clinical trials, a new-drug application is filed with the FDA. New-drug applications typically run 100,000 pages or more.56 For some medicines, the FDA requires additional studies (Phase IV clinical trials) to evaluate longer-term effects. The number of new drugs approved (NDAs) by the FDA is an indication of each state’s capability to build innovative capacity. This study analyzed the number of such drug approvals in each state per 100,000 employees over the four-year period 2000-2003. When scaled for a state’s employment57, the number of new drugs receiving FDA approval serves as a measure of commercial viability.

There were 311 new drugs approved by the FDA from 2000 to 2003 in the U.S., including five NDAs in the District of Columbia. New Jersey, with 81, received the most, followed by California (32), Pennsylvania (31) and Illinois (22). Connecticut and North Carolina tie for fifth with 16 new drug approvals each. While the statistics for the top-ranked states appear impressive, 22 states in the U.S. did not receive NDAs in that same time period. In addition, 13 more states earned three or less NDAs over this same period. This further supports our finding that biopharmaceutical activity chiefly occurs in a few, often the same, states.

A good indicator of the strength of a state’s innovation pipeline comes from data on biotechnology and pharmaceutical patents. The most basic measure in this regard concerns the number of biopharmaceutical patents issued in a state.

Patents are granted by the Patent and Trademark Office (PTO), a division of the U.S. Department of Commerce. The issuance of a patent aims to preserve and protect various forms of individual and corporate property. The term of a new patent is 20 years from the time the application was filed in the


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PTO. Patents are generally registered in the state of residence of their inventors. The number of patents issued serves as a measure of a state’s technological, innovative and commercial capabilities. In the U.S., including the District of Columbia, 6,595 biotech and pharmaceutical patents were issued in 2003 – about two-and-a-half times more than the 2,706 patents issued a decade earlier.

California ranked first with an average of 1,081 patents issued per year from 1993 to 2003, followed by Massachusetts (449), New Jersey (443), Pennsylvania (442) and New York (356). States that have top American research universities located within their borders are likely to generate more patents.58

With an average of slightly more than 59 patents issued from 1993 to 2003, Delaware ranked first among the 50 states for the number of biopharmaceutical patents issued per 100,000 people, with 7.67. It was followed by Massachusetts (7.12), Maryland (5.86), New Jersey (5.32), Connecticut (5.24), Pennsylvania (3.60), California (3.21), New Hampshire (2.58), Indiana (2.46) and Washington (2.24).

A patent citation is the reference to a patent by subsequent patents. The number of patent citations indicates the technological impact and knowledge spillovers from the original discovery, as well as the “science linkages” of biopharmaceutical patents.59 High citation counts are often linked with significant discoveries, ones that are fundamental to future inventions. Companies, institutions or individuals with highly cited patents may be more advanced than their competitors, with more valuable patent portfolios.

Patent citations data are dynamic, accumulating over time. Our data ranks the average number of patent citations per biopharmaceutical patent issued by each state from 1993 to 2003. This serves as a measure for how innovative and commercially viable the state is.

California ranked first in the nation with an annual average of 4,065 biopharmaceutical patent citations issued from 1993 to 2003. Massachusetts ranked a distant second with an average of 1,442 patent citations over this same period. The remaining top five states are New Jersey (3rd with 1,336), Pennsylvania (4th with 1,234) and New York (5th with 1,181).

Calculation of the average number of patent citations per patent is an indicator of the significance of a state’s research and development outputs. Arizona, with a statistic of 6.22, is the state with the highest average number of biopharmaceutical patent citations per patent issued over the period 1993 to 2003. The remaining top five states are Nevada (2nd, 6.01), Rhode Island (3rd, 5.92), California (4th, 5.76) and Maine (5th, 5.43).

The patent technology cycle time is generally defined as the median age in years of the U.S. patent references. It measures the approximate time between the previous patents upon which the current patent is improving, and the current patent. Fast-moving technologies have cycle times as short as three to four years. Slower-moving technologies may realize innovation over 15 years or more.

The state of New Mexico (7.31) had the shortest average biopharmaceutical cycle time in the nation from 1993 to 2003. Oklahoma (2nd, 7.63), Kentucky (3rd, 7.70), Arizona (4th, 7.76) and Maryland (5th, 7.82) make up the remaining top states in the U.S. This data may be interpreted as indicating that these five states are innovating the most rapidly, possibly making incremental, but rapid changes in their technology and products. The remaining top-ranked states with relatively short average cycle times are


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Kansas (6th, 7.89), California (7th, 7.93), Washington (8th, 8.00) followed by and Pennsylvania and New Jersey which tied (8.01). The number of patents issued in the United States increased year-over-year from 109,746 in 1993 to 187,147 patents in 2003.60 The significance of the contribution of the biopharmaceutical industry in each state is measured by calculating the share of biopharmaceutical patents as a percentage of the total number of patents issued in each state, averaged over the period 1993 to 2003. In 1993, biopharmaceutical patents represented 4.55 percent of all patents registered in the country. The biopharmaceutical industry’s contribution increased significantly to peak at 7.88 percent in 1997. However, subsequent to 1997, the industry’s contribution gradually, but continually declined to a low of 6.19 percent in 2003.

Washington, D.C. had the highest percentage of biopharmaceutical patents with an average more than 19 percent of all patents issued in the nation during the period 1993 to 2003. Maryland was the top-ranked state with an average of 18.06 percent biopharmaceutical patents as a share of the total number of patents issued in the state from 1993 to 2003, followed by Massachusetts (2nd, 11.57 percent), Missouri(3rd, 11.19), which had an abundance of agricultural biotech activities, Pennsylvania (4th, 10.87), Delaware (5th, 10.52), New Jersey (6th, 10.13), Indiana (7th, 9.63), Hawaii (8th, 9.14) and Nebraska (9th, 8.75). The number of Technology Fast 500 Companies in a state assesses its high-technology-sector success. Since technology has been a primary driver of economic growth, an indicator that gauges the number of biotechnology and pharmaceutical companies in terms of growth and expansion is crucial when assessing a state’s biopharmaceutical industry. The presence of Fast 500 companies in any given state is important because it shows where the fastest-growing privately held companies are located.

The Deloitte list of North America’s fastest-growing technology 500 companies in biotech and pharmaceuticals61 relies on a combination of quantitative and qualitative data to identify innovative, rapidly expanding firms that demonstrate strong promise for long-term technological and economic contribution.

A total of 54 biopharmaceutical companies made the Fast 500 list in the U.S. in 2003. Only 16 states are home to these firms, an indication of the relatively exclusive nature of the list. California, with 18, is the state with the greatest number of biopharmaceutical Fast 500 companies. Taking into account each state’s employment data, Massachusetts ranked first in the nation. The top 10 states, ranked by the number of biopharmaceutical Fast 500 firms per 100,000 state employees in 2003, were Massachusetts (1st at 0.220, with seven firms), New Jersey (2nd – 0.126 with five firms); California (3rd – 0.125 and 18 firms), Maryland (4th – 0.121 and three firms), Washington (5th – 0.113 and three firms), North Carolina (6th – 0.079 and three firms), Pennsylvania (7th – 0.071 and four firms) and Connecticut, Colorado and Minnesota with one firm each and statistics of 0.061, 0.047 and 0.038, respectively. In 2003, there were 34 states that had no Fast 500 biopharmaceutical firms.


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Biopharmaceutical Innovation Pipeline Index and FindingsBiopharmaceutical research occupies a unique space in the history of scientific innovation in America. It is difficult to overemphasize the significance of the enormous economic demands required to maintain a vibrant and fruitful biopharmaceutical innovation pipeline today. As states seek to diversify their industrial bases and shift their workforces away from labor-intensive to knowledge-intensive jobs, a state’s ability to attract and retain biopharmaceutical enterprises will depend in large measure on its success in supporting innovation pipelines that are, in fact, their organizational lifeblood.

The Institute’s Biopharmaceutical Innovation Pipeline Index indicates that at the highest end of the spectrum, Eastern states clearly dominate. Of the top 10 states on the index, seven hail from that region, and among those, six are either in or bordering the highly clustered New England and Mid-Atlantic regions. The only other regional grouping identifiable within the top 10 from the West with three states – two from the Pacific region and one from the Mountain region.

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The New England states of Massachusetts and Connecticut (with index scores of 85.8 and 82.3) along with Maryland (with an index score of 81.2) are the only states to score above 80 on our overall index. Almost all the remaining Eastern states in the top 10 scored above 70: New Jersey (79.8), Pennsylvania (75.4) and North Carolina (75.0). Tenth-ranked New York scored 66.5. The smaller grouping of Western states is led by sixth-ranked California (75.3), followed by Washington (70.9) and Colorado (70.5).

Top-ranked Massachusetts is noteworthy not only for its score, but its large and tightly knit biotechnology cluster. Although lacking what could be considered a sizable pharmaceutical manufacturing base, the importance of the state’s innovation pipeline to the American biopharmaceutical industry is unmistakable. Apart from the enormous intellectual assets contributed by universities like Harvard and MIT, independent and hospital-affiliated research labs also serve a vital role in generating and attracting biopharmaceutical enterprises.

The index can be interpreted in various ways using criteria such as a state’s regional location, industrial base or population. One particularly useful means of analysis involves observing where scores


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incrementally congregate. This shows how states cluster according to their various levels of innovation capacity. In addition to the three states that scored above 80 index points, three additional index groups can be observed: those in the 61-80 index score range, the 41-80 range and the 25-40 range.

The 61-80 index score range is led by New Jersey (79.8 index points). There are a total of 15 states in this category: New Jersey, Pennsylvania, California, North Carolina, Washington, Colorado, New York, Utah, Illinois, Delaware, Minnesota, Missouri, Rhode Island, Wisconsin, and Michigan. Although they are, technically speaking, second-tier ranking states, those in this group are not necessarily below-par in their innovative biopharmaceutical output. Indeed, apart from New Jersey, states with world-beating biopharmaceutical innovation capabilities include Pennsylvania, New York, North Carolina, Illinois, Minnesota, California and Utah. Although not in the very highest of categories, these states still perform well. In the context of ongoing university and private-sector research initiatives, these states have good prospects for continued high-level performance in biopharmaceutical innovation.

State Rank Score State Rank Score Massachusetts MA 1 85.83 New Hampshire NH 26 53.46Maryland MD 2 82.29 Maine ME 27 52.74Connecticut CT 3 81.15 Iowa IA 28 52.10New Jersey NJ 4 79.78 Nebraska NE 29 51.22Pennslyvania PA 5 75.44 New Mexico NM 30 51.17California CA 6 75.32 Vermont VT 31 50.95North Carolina NC 7 74.95 Kansas KS 32 50.05Washington WA 8 70.90 Tennessee TN 33 48.92Colorado CO 9 70.48 Oregon OR 34 47.49New York NY 10 66.48 Florida FL 35 46.76Utah UT 11 65.93 Montana MT 36 46.46Illinois IL 12 65.00 Hawaii HI 37 43.54Delaware DE 13 64.95 Kentucky KY 38 42.35Minnesota MN 14 63.71 South Carolina SC 39 39.75Missouri MO 15 62.05 Louisiana LA 40 39.60Rhode Island RI 16 60.88 West Virginia WV 41 38.93Wisconsin WI 17 60.80 Arkansas AR 42 38.21Michigan MI 18 60.71 Oklahoma OK 43 37.64Ohio OH 19 59.88 Mississippi MS 44 37.48Texas TX 20 59.54 Idaho ID 45 37.10Indiana IN 21 58.19 North Dakota ND 46 32.26Georgia GA 22 56.41 Nevada NV 47 31.96Alabama AL 23 55.90 Wyoming WY 48 28.69Virginia VA 24 53.97 South Dakota SD 49 26.84Arizona AZ 25 53.61 Alaska AK 50 25.37

State Average 54.30

State Biopharmaceutical IndexOverall Index, 2004


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The 41-60 index score range is led by Ohio, Texas and Indiana, which at 59.9, 59.5 and 58.2 points, respectively, score nearly into the second tier. The other states in this category (20 in total) are Georgia, Alabama, Virginia, Arizona, New Hampshire, Maine, Iowa, Nebraska, New Mexico, Vermont, Kansas, Tennessee, Oregon, Florida, Montana, Hawaii and Kentucky. These states congregate around the mid-point index score of 50. Although not characterized by stellar performance in pipeline measures captured by the index, many – Texas, Georgia, Virginia, Arizona, Nebraska, Florida, and Kentucky, for example – are pursuing strategies to bring in additional knowledge-intensive industries and funding.

Lower-grouped states fall below the level of 40 index points. They are South Carolina, Louisiana, West Virginia, Arkansas, Oklahoma, Mississippi, Idaho, North Dakota, Nevada, Wyoming, South Dakota and Alaska. At the top of this group are South Carolina and Louisiana, which with 39.8 and 39.6 index points nearly make it into the 41-60 category. For this grouping of states, more efforts at attracting research-intensive enterprise, specially trained workers and financial support mechanisms are in order, to improve their standing. Initiatives such as Accelerate Arkansas and general economic trends witnessed in Nevada, which is experiencing rapid growth and an expanding presence of knowledge-intensive industry, bode well for certain states.


141144

Biopharmaceutical Innovation Pipeline Index

I. Biopharmaceutical Research Funding

1 2 3

Rank Statistic Score Rank Statistic Score Rank Statistic ScoreNew Jersey NJ 1 518.72 100.0 Massachusetts MA 1 343.21 100.0 Maryland MD 1 86.91 100.0Connecticut CT 2 322.10 94.4 Maryland MD 2 235.54 93.6 Massachusetts MA 2 76.13 98.0Massachusetts MA 3 176.87 87.4 Washington WA 3 125.22 82.7 Vermont VT 3 66.12 96.0Pennsylvania PA 4 127.65 83.6 Rhode Island RI 4 122.06 82.3 Connecticut CT 4 56.63 93.7Illinois IL 5 94.47 80.1 Connecticut CT 5 120.21 82.0 North Carolina NC 5 54.09 93.0California CA 6 89.37 79.4 Vermont VT 6 112.87 81.0 Missouri MO 6 52.60 92.6Indiana IN 7 71.42 76.8 North Carolina NC 7 111.69 80.8 Pennsylvania PA 7 48.89 91.5Washington WA 8 63.22 75.4 Pennsylvania PA 8 108.98 80.4 New Hampshire NH 8 45.59 90.5Maryland MD 9 57.89 74.4 New York NY 9 98.29 78.6 New York NY 9 44.72 90.2Missouri MO 10 56.07 74.0 California CA 10 95.41 78.1 Washington WA 10 43.70 89.8New York NY 11 46.70 71.9 Missouri MO 11 91.00 77.3 Alabama AL 11 41.68 89.1North Carolina NC 12 46.02 71.7 Minnesota MN 12 80.12 75.1 Utah UT 12 41.56 89.1Delaware DE 13 32.15 67.5 New Hampshire NH 13 76.73 74.3 Iowa IA 13 39.35 88.3Ohio OH 14 22.00 63.1 Alabama AL 14 72.20 73.3 Tennessee TN 14 38.98 88.2Colorado CO 15 21.18 62.6 Colorado CO 15 70.88 73.0 Rhode Island RI 15 38.95 88.1Maine ME 16 20.54 62.2 Iowa IA 16 69.31 72.6 Colorado CO 16 35.65 86.8Vermont VT 17 16.67 59.8 Oregon OR 17 69.05 72.5 California CA 17 35.63 86.8Utah UT 18 14.66 58.3 Tennessee TN 18 68.89 72.5 Wisconsin WI 18 31.88 85.2Kansas KS 19 14.21 57.9 Wisconsin WI 19 68.52 72.4 Minnesota MN 19 30.08 84.3Virginia VA 20 13.68 57.5 Utah UT 20 65.80 71.7 Michigan MI 20 29.79 84.2Iowa IA 21 10.36 54.2 Ohio OH 21 57.83 69.5 Texas TX 21 29.22 83.9Florida FL 22 8.93 52.5 Illinois IL 22 55.84 68.9 Illinois IL 22 25.87 82.1New Hampshire NH 23 8.84 52.4 Texas TX 23 54.93 68.6 New Mexico NM 23 23.79 80.9Rhode Island RI 24 8.75 52.3 Maine ME 24 54.27 68.4 Ohio OH 24 22.81 80.2Texas TX 25 8.30 51.7 Michigan MI 25 53.91 68.3 Virginia VA 25 21.84 79.6South Carolina SC 26 7.67 50.7 Virginia VA 26 53.50 68.2 Georgia GA 26 21.48 79.3Minnesota MN 27 7.36 50.2 New Mexico NM 27 49.79 66.9 Oregon OR 27 21.03 79.0Wisconsin WI 28 7.09 49.8 Hawaii HI 28 44.57 65.0 Kansas KS 28 19.61 78.0Alabama AL 29 6.91 49.5 Georgia GA 29 39.19 62.8 Indiana IN 29 17.58 76.4Montana MT 30 6.19 48.2 Nebraska NE 30 38.33 62.5 North Dakota ND 30 17.48 76.3Oregon OR 31 5.88 47.6 Montana MT 31 36.34 61.5 Nebraska NE 31 17.43 76.3Michigan MI 32 5.51 46.9 Louisiana LA 32 35.10 60.9 Montana MT 32 16.29 75.3Nebraska NE 33 4.19 43.7 Delaware DE 33 34.56 60.7 South Carolina SC 33 15.95 74.9Georgia GA 34 3.83 42.6 New Jersey NJ 34 30.72 58.7 Kentucky KY 34 15.87 74.9Hawaii HI 35 3.09 40.1 South Carolina SC 35 30.28 58.4 Louisiana LA 35 14.44 73.5Kentucky KY 36 2.92 39.4 Indiana IN 36 29.92 58.2 New Jersey NJ 36 14.20 73.2Mississippi MS 37 2.25 36.4 Kentucky KY 37 29.73 58.1 Delaware DE 37 11.79 70.5Arizona AZ 38 2.22 36.2 Kansas KS 38 28.98 57.7 Arizona AZ 38 9.24 66.9New Mexico NM 39 2.14 35.8 Arizona AZ 39 27.32 56.7 Oklahoma OK 39 8.18 65.1Tennessee TN 40 1.65 32.8 North Dakota ND 40 23.77 54.3 Arkansas AR 40 8.17 65.1Idaho ID 41 1.50 31.7 Oklahoma OK 41 22.66 53.5 Hawaii HI 41 7.69 64.2Oklahoma OK 42 1.35 30.4 South Dakota SD 42 19.73 51.1 Idaho ID 42 7.34 63.5West Virginia WV 43 1.21 29.2 Arkansas AR 43 18.82 50.3 Florida FL 43 7.26 63.3Nevada NV 44 1.17 28.7 Florida FL 44 18.71 50.2 Mississippi MS 44 6.10 60.7Arkansas AR 45 0.97 26.6 Alaska AK 45 16.02 47.5 Wyoming WY 45 4.84 57.3Louisiana LA 46 0.88 25.4 Wyoming WY 46 15.18 46.6 Nevada NV 46 4.42 56.0Alaska AK 47 0.19 7.8 Mississippi MS 47 12.20 42.8 West Virginia WV 47 4.00 54.5South Dakota SD 48 0.04 1.5 Nevada NV 48 9.38 38.3 South Dakota SD 48 3.13 50.9North Dakota ND 49 0.00 0.0 West Virginia WV 49 8.09 35.8 Alaska AK 49 0.54 25.1Wyoming WY 49 0.00 0.0 Idaho ID 50 7.84 35.3 Maine ME 50 0.21 11.0

Average 54.12 Average 73.67 Average 31.05Total NSF $15.6 billion Total $ 21.4 billion Total $9.0 billionD.C. 33.96 D.C. 389.23 D.C 138.99

Industrial R&D to BiopharmaceuticalsDollars per Capita, 2002

National Institutes of Health FundingTotal Dollars per Capita, 2003

NIH Funding to BiopharmaceuticalsDollars per Capita, 2003


142

145



4 5 6

Rank Statistic Score Rank Statistic Score Rank Statistic ScoreMaryland MD 1 143.43 100.0 Montana MT 1 5.60 100.0 Massachusetts MA 1 24.84 100.0Connecticut CT 2 119.35 96.3 Maryland MD 2 4.50 94.6 Maryland MD 2 19.81 95.9Massachusetts MA 3 116.59 95.8 Massachusetts MA 3 4.01 91.7 New Hampshire NH 3 14.28 90.0Vermont VT 4 109.34 94.5 Washington WA 4 3.96 91.4 Vermont VT 4 12.11 87.0North Carolina NC 5 98.16 92.4 Nebraska NE 5 3.79 90.3 Washington WA 5 10.67 84.7New York NY 6 90.22 90.7 Connecticut CT 6 3.62 89.2 Rhode Island RI 6 9.77 83.1Missouri MO 7 86.48 89.8 Missouri MO 7 3.61 89.1 Oregon OR 7 8.17 79.8Wisconsin WI 8 85.71 89.6 North Carolina NC 8 3.54 88.6 California CA 8 7.91 79.2Iowa IA 9 85.70 89.6 Iowa IA 9 3.50 88.3 Utah UT 9 7.43 78.1Pennsylvania PA 10 83.34 89.1 Rhode Island RI 10 3.48 88.2 Virginia VA 10 7.01 77.1New Hampshire NH 11 76.35 87.3 Georgia GA 11 3.22 86.3 Wisconsin WI 11 6.72 76.3California CA 12 73.10 86.4 Arizona AZ 12 3.02 84.6 Colorado CO 12 6.43 75.5Washington WA 13 72.99 86.4 Wisconsin WI 13 2.85 83.2 Ohio OH 13 5.46 72.5Texas TX 14 71.92 86.1 Oregon OR 14 2.76 82.5 Pennsylvania PA 14 5.44 72.5Nebraska NE 15 71.63 86.0 North Dakota ND 15 2.74 82.2 Arizona AZ 15 5.32 72.1Alabama AL 16 62.56 83.3 Indiana IN 16 2.67 81.6 New Mexico NM 16 5.12 71.3Illinois IL 17 59.27 82.2 New Hampshire NH 17 2.64 81.3 Minnesota MN 17 4.97 70.8Minnesota MN 18 59.10 82.1 Michigan MI 18 2.43 79.2 Wyoming WY 18 4.81 70.2Michigan MI 19 56.78 81.3 Colorado CO 19 2.36 78.6 North Carolina NC 19 4.80 70.2Oregon OR 20 55.45 80.9 Oklahoma OK 20 2.35 78.4 Delaware DE 20 3.87 66.3Colorado CO 21 54.14 80.4 Idaho ID 21 2.27 77.6 South Carolina SC 21 3.86 66.3Utah UT 22 54.05 80.3 Kentucky KY 22 2.13 75.9 Montana MT 22 3.57 64.8Georgia GA 23 50.23 78.9 Vermont VT 23 2.06 75.1 Connecticut CT 23 3.53 64.6Ohio OH 24 48.87 78.3 Pennsylvania PA 24 2.06 75.1 New York NY 24 3.42 64.1Rhode Island RI 25 46.43 77.3 Wyoming WY 25 1.97 74.0 New Jersey NJ 25 3.39 63.9Tennessee TN 26 46.41 77.3 Nevada NV 26 1.95 73.8 Michigan MI 26 3.25 63.1Kansas KS 27 44.68 76.5 Maine ME 27 1.93 73.6 Iowa IA 27 3.11 62.3Louisiana LA 28 44.24 76.3 California CA 28 1.87 72.8 Maine ME 28 2.96 61.4Kentucky KY 29 42.85 75.7 New York NY 29 1.87 72.8 Texas TX 29 2.65 59.4Indiana IN 30 41.60 75.1 Illinois IL 30 1.86 72.6 Alabama AL 30 2.53 58.6South Carolina SC 31 37.98 73.2 Utah UT 31 1.86 72.6 Illinois IL 31 2.07 55.0Virginia VA 32 37.80 73.1 Ohio OH 32 1.85 72.5 Missouri MO 32 2.00 54.3New Mexico NM 33 37.11 72.8 South Carolina SC 33 1.80 71.8 Kansas KS 33 1.98 54.2Arizona AZ 34 34.41 71.3 Hawaii HI 34 1.80 71.8 Indiana IN 34 1.95 53.9New Jersey NJ 35 32.14 69.9 Virginia VA 35 1.74 71.0 Nebraska NE 35 1.81 52.5Montana MT 36 31.86 69.7 New Mexico NM 36 1.69 70.3 North Dakota ND 36 1.65 50.9Oklahoma OK 37 27.17 66.5 Delaware DE 37 1.56 68.2 Tennessee TN 37 1.63 50.6Florida FL 38 25.78 65.4 Louisiana LA 38 1.51 67.4 Mississippi MS 38 1.49 49.0Hawaii HI 39 24.55 64.5 Arkansas AR 39 1.49 67.1 Oklahoma OK 39 1.47 48.8West Virginia WV 40 23.70 63.7 Texas TX 40 1.38 65.3 South Dakota SD 40 1.46 48.7Alaska AK 41 20.47 60.8 Kansas KS 41 1.37 64.9 Nevada NV 41 1.42 48.1North Dakota ND 42 19.43 59.7 New Jersey NJ 42 1.26 62.9 Florida FL 42 1.40 47.8Mississippi MS 43 18.95 59.2 Tennessee TN 43 1.23 62.2 Georgia GA 43 1.26 45.9Arkansas AR 44 17.63 57.8 Minnesota MN 44 1.22 62.1 Arkansas AR 44 1.13 44.0Wyoming WY 45 15.98 55.8 Florida FL 45 1.18 61.3 Louisiana LA 45 1.04 42.5Idaho ID 46 14.00 53.1 South Dakota SD 46 1.07 58.9 Hawaii HI 46 0.98 41.3Nevada NV 47 11.76 49.6 Alabama AL 47 1.01 57.6 Alaska AK 47 0.95 40.8South Dakota SD 48 10.30 47.0 Mississippi MS 48 0.86 53.4 Kentucky KY 48 0.57 31.7Maine ME 49 8.54 43.2 West Virginia WV 49 0.32 29.2 Idaho ID 49 0.26 17.5Delaware DE 50 7.04 39.3 Alaska AK 50 0.20 16.9 West Virginia WV 50 0.00 0.0

Average 62.22 Average 2.16 Average 5.19Total $17.9 billion Total $210.8 million Total $506.5 millionD.C. 271.10 D.C. 3.69 D.C. 7.24

Academic R&D to BiopharmaceuticalsDollars per Capita, 2002

NSF Funding to BiopharmaceuticalsPer $100,000 GSP, 2003

SBIR Awards to Life SciencePer $100,000 GSP, 2003


143146



7 8

Rank Statistic Score Rank Average ScoreMassachusetts MA 1 1.87 100.0 Massachusetts MA 1 93.43Vermont VT 2 1.41 94.6 Connecticut CT 2 89.41North Carolina NC 3 0.76 82.7 Maryland MD 3 87.18Minnesota MN 4 0.73 81.9 Pennsylvania PA 4 82.94Montana MT 5 0.68 80.8 Washington WA 5 81.17Alabama AL 6 0.61 78.6 North Carolina NC 6 80.60Kentucky KY 7 0.59 78.0 California CA 7 79.73Wyoming WY 8 0.56 76.8 New Jersey NJ 8 79.60Maryland MD 9 0.53 76.0 Missouri MO 9 78.71Tennessee TN 10 0.46 73.4 Vermont VT 10 77.48Arizona AZ 11 0.44 72.5 New York NY 11 77.27Virginia VA 12 0.43 72.0 Illinois IL 12 75.27Connecticut CT 13 0.35 68.1 Colorado CO 13 71.91Wisconsin WI 14 0.33 66.8 Indiana IN 14 71.24Pennsylvania PA 15 0.32 66.1 Utah UT 15 70.27New York NY 16 0.31 65.6 Iowa IA 16 69.52Missouri MO 17 0.31 65.4 Wisconsin WI 17 68.69Delaware DE 18 0.28 63.8 Ohio OH 18 68.68Georgia GA 19 0.28 63.6 New Hampshire NH 19 67.90Texas TX 20 0.28 63.5 Virginia VA 20 67.43Washington WA 21 0.26 62.1 Rhode Island RI 21 66.80Utah UT 22 0.25 61.2 Minnesota MN 22 66.64Oregon OR 23 0.24 60.6 Alabama AL 23 65.64Michigan MI 24 0.23 59.6 Texas TX 24 65.55Colorado CO 25 0.22 58.7 Oregon OR 25 65.49Kansas KS 26 0.21 58.0 Michigan MI 26 64.06Oklahoma OK 27 0.20 56.8 Kansas KS 27 63.95Florida FL 28 0.19 56.5 Montana MT 28 63.59Louisiana LA 29 0.18 55.5 Delaware DE 29 62.81New Jersey NJ 30 0.18 55.2 Nebraska NE 30 61.52Nebraska NE 31 0.18 55.1 Georgia GA 31 60.16California CA 32 0.18 55.1 South Carolina SC 32 58.72Mississippi MS 33 0.15 52.4 Tennessee TN 33 57.30Arkansas AR 34 0.15 51.5 Florida FL 34 56.34Iowa IA 35 0.15 51.5 Arizona AZ 35 56.25Illinois IL 36 0.09 42.6 Kentucky KY 36 56.14Ohio OH 37 0.07 37.0 New Mexico NM 37 54.69Indiana IN 38 0.07 36.2 Hawaii HI 38 50.31Alaska AK 39 0.00 0.0 Maine ME 39 49.99Hawaii HI 39 0.00 0.0 Louisiana LA 40 49.73Idaho ID 39 0.00 0.0 Oklahoma OK 41 49.62Maine ME 39 0.00 0.0 Mississippi MS 42 47.14Nevada NV 39 0.00 0.0 Arkansas AR 43 44.99New Hampshire NH 39 0.00 0.0 Idaho ID 44 40.81New Mexico NM 39 0.00 0.0 Nevada NV 45 40.31North Dakota ND 39 0.00 0.0 Wyoming WY 46 36.29Rhode Island RI 39 0.00 0.0 North Dakota ND 47 35.82South Carolina SC 39 0.00 0.0 West Virginia WV 48 35.18South Dakota SD 39 0.00 0.0 South Dakota SD 49 28.47West Virginia WV 39 0.00 0.0 Alaska AK 50 25.05

Average 0.31 Average 62.36Total $30.3 millionD.C. 0.83

STTR Awards to Life SciencePer $100,000 GSP, 2003

Biopharmaceutical Research FundingComposite Index, 2004


144147


II. Biopharmaceutical Risk Capital Funding

1 2 3

Rank Statistic Score Rank Statistic Score Rank Statistic ScoreOhio OH 1 1719.13 100.00 Ohio OH 1 237.17 100.00 Massachusetts MA 1 181.23 100.00Maine ME 2 237.62 73.44 Arizona AZ 2 198.67 96.76 California CA 2 77.51 88.68Georgia GA 3 206.83 71.57 Rhode Island RI 3 166.52 93.53 New Jersey NJ 3 76.74 88.55New Mexico NM 4 204.61 71.43 Illinois IL 4 157.81 92.55 Colorado CO 4 59.17 85.08New Jersey NJ 5 181.02 69.78 Washington WA 5 133.04 89.43 Maryland MD 5 58.08 84.83Alabama AL 6 161.83 68.28 Maine ME 6 124.11 88.16 North Carolina NC 6 48.74 82.50Minnesota MN 7 135.33 65.88 Colorado CO 7 122.98 87.99 Washington WA 7 42.95 80.81Washington WA 8 132.08 65.55 Texas TX 8 116.98 87.08 Rhode Island RI 8 41.88 80.47Arizona AZ 9 129.90 65.33 New York NY 9 113.40 86.51 Connecticut CT 9 36.01 78.46Rhode Island RI 10 125.97 64.92 Maryland MD 10 113.17 86.47 Pennslyvania PA 10 27.94 75.08Massachusetts MA 11 125.40 64.86 Massachusetts MA 11 109.40 85.85 Utah UT 11 23.02 72.50North Carolina NC 12 120.66 64.34 California CA 12 107.73 85.57 Maine ME 12 21.36 71.50Connecticut CT 13 110.39 63.15 North Carolina NC 13 101.02 84.39 New Hampshire NH 13 13.71 65.59California CA 14 106.67 62.68 Minnesota MN 14 99.56 84.13 New York NY 14 10.65 62.22Illinois IL 15 105.21 62.50 New Mexico NM 14 99.56 84.13 Missouri MO 15 8.12 58.61Texas TX 16 98.95 61.68 New Jersey NJ 16 98.71 83.97 Texas TX 16 7.41 57.38Pennslyvania PA 17 82.77 59.28 Pennslyvania PA 17 91.24 82.53 Ohio OH 17 7.05 56.72Utah UT 18 77.69 58.43 Michigan MI 18 83.26 80.86 Virginia VA 18 6.88 56.40Colorado CO 19 71.49 57.31 Connecticut CT 19 79.57 80.03 Arizona AZ 19 6.14 54.89Michigan MI 20 60.26 55.02 Georgia GA 20 74.78 78.89 Tennessee TN 20 5.10 52.41Maryland MD 21 59.57 54.86 Utah UT 21 64.78 76.27 Michigan MI 21 4.99 52.12New York NY 22 43.97 50.79 Alabama AL 22 62.06 75.48 Illinois IL 22 4.95 52.00Wisconsin WI 23 13.07 34.50 Wisconsin WI 23 10.00 42.10 Minnesota MN 23 4.93 51.96Alaska AK 24 0.00 0.00 Alaska AK 24 0.00 0.00 Georgia GA 24 4.81 51.62Arkansas AR 24 0.00 0.00 Arkansas AR 24 0.00 0.00 Nebraska NE 25 3.74 48.27Delaware DE 24 0.00 0.00 Delaware DE 24 0.00 0.00 New Mexico NM 26 3.01 45.37Florida FL 24 0.00 0.00 Florida FL 24 0.00 0.00 Wisconsin WI 27 2.49 42.85Hawaii HI 24 0.00 0.00 Hawaii HI 24 0.00 0.00 Hawaii HI 28 1.61 37.05Idaho ID 24 0.00 0.00 Idaho ID 24 0.00 0.00 Florida FL 29 1.56 36.60Indiana IN 24 0.00 0.00 Indiana IN 24 0.00 0.00 Indiana IN 30 1.42 35.32Iowa IA 24 0.00 0.00 Iowa IA 24 0.00 0.00 Alabama AL 31 1.04 31.21Kansas KS 24 0.00 0.00 Kansas KS 24 0.00 0.00 Kentucky KY 32 0.65 24.94Kentucky KY 24 0.00 0.00 Kentucky KY 24 0.00 0.00 Delaware DE 33 0.49 21.09Louisiana LA 24 0.00 0.00 Louisiana LA 24 0.00 0.00 Alaska AK 34 0.00 0.00Mississippi MS 24 0.00 0.00 Mississippi MS 24 0.00 0.00 Arkansas AR 34 0.00 0.00Missouri MO 24 0.00 0.00 Missouri MO 24 0.00 0.00 Idaho ID 34 0.00 0.00Montana MT 24 0.00 0.00 Montana MT 24 0.00 0.00 Iowa IA 34 0.00 0.00Nebraska NE 24 0.00 0.00 Nebraska NE 24 0.00 0.00 Kansas KS 34 0.00 0.00Nevada NV 24 0.00 0.00 Nevada NV 24 0.00 0.00 Louisiana LA 34 0.00 0.00New Hampshire NH 24 0.00 0.00 New Hampshire NH 24 0.00 0.00 Mississippi MS 34 0.00 0.00North Dakota ND 24 0.00 0.00 North Dakota ND 24 0.00 0.00 Montana MT 34 0.00 0.00Oklahoma OK 24 0.00 0.00 Oklahoma OK 24 0.00 0.00 Nevada NV 34 0.00 0.00Oregon OR 24 0.00 0.00 Oregon OR 24 0.00 0.00 North Dakota ND 34 0.00 0.00South Carolina SC 24 0.00 0.00 South Carolina SC 24 0.00 0.00 Oklahoma OK 34 0.00 0.00South Dakota SD 24 0.00 0.00 South Dakota SD 24 0.00 0.00 Oregon OR 34 0.00 0.00Tennessee TN 24 0.00 0.00 Tennessee TN 24 0.00 0.00 South Carolina SC 34 0.00 0.00Vermont VT 24 0.00 0.00 Vermont VT 24 0.00 0.00 South Dakota SD 34 0.00 0.00Virginia VA 24 0.00 0.00 Virginia VA 24 0.00 0.00 Vermont VT 34 0.00 0.00West Virginia WV 24 0.00 0.00 West Virginia WV 24 0.00 0.00 West Virginia WV 34 0.00 0.00Wyoming WY 24 0.00 0.00 Wyoming WY 24 0.00 0.00 Wyoming WY 34 0.00 0.00

Average 100.00 Average 100.00 Average 28.18Annual Total (2001-2003) $2.7 billion Annual Total (2001-2003) 249 Annual Total (2001-2003) $2.7 billionD.C 121.98 D.C. 126.06 D.C. 134.85

Total Venture Capital Investment to Biotech Relative Growth (US=100), Avg. 2001 - 2003

Biotech Companies Receiving VC InvestmentRelative Growth (US=100), Avg. 2001 - 2003

Biotech Venture Capital InvestmentPer $100,000 GSP, Avg. 2001-2003


145148


II. Biopharmaceutical Risk Capital Funding

4

Rank Average ScoreMassachusetts MA 1 90.14New Jersey NJ 2 83.88California CA 3 82.86Colorado CO 4 80.11Rhode Island RI 5 79.97Washington WA 6 79.48North Carolina NC 7 79.24Maryland MD 8 79.17Connecticut CT 9 75.71Maine ME 10 75.22Ohio OH 11 74.03Pennslyvania PA 12 73.41Utah UT 13 70.44Arizona AZ 14 65.35New York NY 15 64.79Texas TX 16 64.18Illinois IL 17 62.21Minnesota MN 18 61.18Georgia GA 19 61.07Michigan MI 20 58.45New Mexico NM 21 58.33Alabama AL 22 47.48Wisconsin WI 23 41.03New Hampshire NH 24 39.35Missouri MO 25 35.17Virginia VA 26 33.84Tennessee TN 27 31.44Nebraska NE 28 28.96Hawaii HI 29 22.23Florida FL 30 21.96Indiana IN 31 21.19Kentucky KY 32 14.96Delaware DE 33 12.65Alaska AK 34 0.00Arkansas AR 34 0.00Idaho ID 34 0.00Iowa IA 34 0.00Kansas KS 34 0.00Louisiana LA 34 0.00Mississippi MS 34 0.00Montana MT 34 0.00Nevada NV 34 0.00North Dakota ND 34 0.00Oklahoma OK 34 0.00Oregon OR 34 0.00South Carolina SC 34 0.00South Dakota SD 34 0.00Vermont VT 34 0.00West Virginia WV 34 0.00Wyoming WY 34 0.00

Average 37.39

Biopharmaceutical Risk Capital FundingComposite Index, 2004


146149


III. Biopharmaceutical Human Capital and Workforce

1 2 3

Rank Statistic Score Rank Statistic Score Rank Statistic ScoreMassachusetts MA 1 52.31 100.00 Montana MT 1 7.20 100.00 Wyoming WY 1 13.52 100.00Connecticut CT 2 40.61 93.60 South Carolina SC 2 7.01 98.67 Kansas KS 2 10.91 91.77New Mexico NM 3 34.06 89.16 New Jersey NJ 3 6.85 97.50 North Dakota ND 3 10.44 90.07Louisiana LA 4 33.78 88.95 Maine ME 4 6.65 95.99 South Dakota SD 4 9.95 88.23Maryland MD 5 32.78 88.19 California CA 5 6.63 95.86 Vermont VT 5 9.58 86.79Iowa IA 6 30.14 86.07 Louisiana LA 6 6.52 95.02 Nebraska NE 6 8.50 82.18Minnesota MN 7 28.84 84.96 Colorado CO 7 6.35 93.66 Maine ME 7 8.39 81.70Kansas KS 8 26.19 82.52 North Carolina NC 8 6.30 93.25 Iowa IA 8 8.31 81.31Pennsylvania PA 9 26.15 82.48 Mississippi MS 9 6.24 92.78 Montana MT 9 7.77 78.74Wisconsin WI 10 25.71 82.05 Maryland MD 10 6.21 92.51 West Virginia WV 10 7.57 77.75Nebraska NE 11 25.10 81.44 Idaho ID 11 6.13 91.91 Oklahoma OK 11 7.06 75.06Alabama AL 12 24.20 80.52 Oregon OR 12 6.10 91.59 New Hampshire NH 12 6.96 74.51Montana MT 13 23.22 79.47 South Dakota SD 13 5.96 90.44 Pennsylvania PA 13 6.58 72.35New York NY 14 23.05 79.29 Minnesota MN 14 5.80 89.05 Mississippi MS 14 6.04 69.09North Carolina NC 15 21.73 77.80 Massachusetts MA 15 5.79 88.97 Massachusetts MA 15 5.89 68.10North Dakota ND 16 21.66 77.72 Alaska AK 16 5.73 88.48 South Carolina SC 16 5.34 64.33Illinois IL 17 21.16 77.13 New Hampshire NH 17 5.63 87.55 Missouri MO 17 5.29 63.96Ohio OH 18 20.87 76.78 Wisconsin WI 18 5.47 86.12 New Mexico NM 18 5.19 63.25Vermont VT 19 20.81 76.71 Washington WA 19 5.47 86.06 Arkansas AR 19 5.12 62.71Missouri MO 20 20.44 76.25 Rhode Island RI 20 5.36 85.08 Rhode Island RI 20 5.05 62.21Colorado CO 21 20.27 76.04 Illinois IL 21 5.34 84.86 Tennessee TN 21 5.04 62.12Rhode Island RI 22 19.93 75.61 New Mexico NM 22 5.34 84.85 Indiana IN 22 5.00 61.79Oregon OR 23 19.78 75.42 Vermont VT 23 5.29 84.38 Alabama AL 23 4.68 59.23Utah UT 24 19.32 74.83 Utah UT 24 5.22 83.69 Idaho ID 24 4.66 59.14Michigan MI 25 19.21 74.68 North Dakota ND 25 5.20 83.58 Wisconsin WI 25 4.61 58.72New Hampshire NH 26 19.05 74.47 Virginia VA 26 5.16 83.16 Kentucky KY 26 4.39 56.82Hawaii HI 27 18.49 73.72 Hawaii HI 27 5.13 82.89 Minnesota MN 27 4.31 56.10Tennessee TN 28 17.98 73.01 Georgia GA 28 5.13 82.81 North Carolina NC 28 4.21 55.24South Dakota SD 29 17.91 72.92 Connecticut CT 29 5.07 82.29 Oregon OR 29 4.18 54.93Indiana IN 30 17.48 72.30 Oklahoma OK 30 5.07 82.28 New York NY 30 3.97 52.92Texas TX 31 17.15 71.82 Pennsylvania PA 31 5.07 82.22 Connecticut CT 31 3.93 52.59Wyoming WY 32 16.73 71.19 Ohio OH 32 5.03 81.86 Ohio OH 32 3.88 52.09Washington WA 33 16.73 71.19 Arkansas AR 33 5.01 81.61 Virginia VA 33 3.78 51.10Virginia VA 34 16.70 71.15 Michigan MI 34 4.98 81.31 Louisiana LA 34 3.72 50.48New Jersey NJ 35 16.69 71.13 Delaware DE 35 4.97 81.25 Alaska AK 35 3.47 47.82California CA 36 16.48 70.81 Texas TX 36 4.94 80.89 Texas TX 36 3.28 45.66Kentucky KY 37 16.32 70.57 Iowa IA 37 4.89 80.40 Illinois IL 37 3.15 44.10Florida FL 38 15.01 68.45 Kansas KS 38 4.86 80.13 Michigan MI 38 2.98 41.91West Virginia WV 39 14.61 67.77 Nebraska NE 39 4.84 79.88 Maryland MD 39 2.98 41.88Alaska AK 40 12.86 64.54 Alabama AL 40 4.68 78.22 Hawaii HI 40 2.97 41.84Mississippi MS 41 12.83 64.48 Missouri MO 41 4.65 77.87 Georgia GA 41 2.89 40.75South Carolina SC 42 12.35 63.53 Kentucky KY 42 4.58 77.10 Utah UT 42 2.87 40.44Oklahoma OK 43 11.94 62.66 Tennessee TN 43 4.58 77.09 Delaware DE 43 2.76 38.93Idaho ID 44 11.90 62.57 Indiana IN 44 4.49 76.09 New Jersey NJ 44 2.59 36.57Georgia GA 45 11.85 62.47 Nevada NV 45 4.32 74.09 Colorado CO 45 2.52 35.50Arizona AZ 46 11.69 62.14 New York NY 46 4.24 73.21 California CA 46 2.30 31.98Maine ME 47 10.40 59.17 West Virginia WV 47 4.16 72.21 Washington WA 47 1.89 24.35Delaware DE 48 9.83 57.75 Wyoming WY 48 3.82 67.86 Arizona AZ 48 1.45 14.36Arkansas AR 49 9.22 56.12 Florida FL 49 3.71 66.46 Florida FL 49 1.30 10.10Nevada NV 50 6.70 48.07 Arizona AZ 50 3.60 64.88 Nevada NV 50 1.26 8.82

Average 20.13 Average 5.28 Average 3.81Total 79,940 Total 65,148 Total 1,512D.C. 127.98 D.C. 3.66 D.C. 7.59

# of Graduate Students in Biopharmaceuticals % of Bachelor's Degrees in Biopharmaceuticals # of Institutions Offering BiopharmaceuticalsPer 10,000 People (25 - 34 Age Cohort), 2001 Percent of Total Bachelor's Degrees, 2001 Per 100,000 People (25 - 34 Age Cohort), 2001


147150



4 5 6

Rank Statistic Score Rank Statistic Score Rank Statistic ScoreDelaware DE 1 263.09 100.00 Delaware DE 1 208.48 100.00 Delaware DE 1 54.60 100.00Connecticut CT 2 104.86 83.49 Connecticut CT 2 88.40 83.93 Maryland MD 2 43.78 94.48Maryland MD 3 63.01 74.35 Colorado CO 3 35.03 66.60 Montana MT 3 32.88 87.32Colorado CO 4 45.91 68.67 New Jersey NJ 4 24.54 59.94 Idaho ID 4 31.84 86.52New Jersey NJ 5 45.21 68.40 Massachusetts MA 5 21.11 57.11 New Jersey NJ 5 20.67 75.71Massachusetts MA 6 37.49 65.04 Maryland MD 6 19.23 55.37 Vermont VT 6 17.22 71.14Montana MT 7 32.88 62.68 California CA 7 19.09 55.23 Connecticut CT 7 16.46 70.02Idaho ID 8 31.84 62.11 Pennsylvania PA 8 17.75 53.87 Massachusetts MA 8 16.38 69.90California CA 9 30.46 61.31 Utah UT 9 16.30 52.27 Georgia GA 9 16.38 69.89Indiana IN 10 25.93 58.42 New York NY 10 15.25 51.03 West Virginia WV 10 14.68 67.15Utah UT 11 25.89 58.39 North Carolina NC 11 14.57 50.17 Michigan MI 11 14.52 66.90New York NY 12 25.18 57.89 Indiana IN 12 14.37 49.90 Arkansas AR 12 14.31 66.52Pennsylvania PA 13 24.28 57.24 Louisiana LA 13 13.53 48.78 Wisconsin WI 13 13.75 65.52Wisconsin WI 14 23.78 56.87 Virginia VA 14 10.31 43.68 North Dakota ND 14 12.73 63.61North Carolina NC 15 21.59 55.13 Alaska AK 15 10.26 43.61 Iowa IA 15 12.73 63.60West Virginia WV 16 20.55 54.24 Wisconsin WI 16 10.03 43.18 Hawaii HI 16 12.66 63.45Alaska AK 17 20.53 54.23 Missouri MO 17 9.14 41.43 Rhode Island RI 17 12.66 63.45Georgia GA 18 19.81 53.59 Nebraska NE 18 9.12 41.40 Illinois IL 18 12.14 62.41Oregon OR 19 18.16 52.03 Oregon OR 19 9.08 41.32 Indiana IN 19 11.56 61.19Arkansas AR 20 17.88 51.75 Maine ME 20 8.49 40.05 California CA 20 11.37 60.77Vermont VT 21 17.22 51.07 Kansas KS 21 8.48 40.03 New Mexico NM 21 10.89 59.70Illinois IL 22 17.17 51.02 Minnesota MN 22 7.69 38.21 Colorado CO 22 10.89 59.69Virginia VA 23 17.08 50.92 West Virginia WV 23 5.87 33.15 Alaska AK 23 10.26 58.22Maine ME 24 16.97 50.82 Illinois IL 24 5.03 30.25 New York NY 24 9.93 57.38Missouri MO 25 16.75 50.58 Arkansas AR 25 3.58 23.87 Alabama AL 25 9.89 57.28Iowa IA 26 16.27 50.05 Iowa IA 26 3.54 23.66 Utah UT 26 9.59 56.51Louisiana LA 27 16.23 50.01 Georgia GA 27 3.43 23.10 Oregon OR 27 9.08 55.16Kansas KS 28 16.18 49.96 Ohio OH 28 3.19 21.69 Maine ME 28 8.49 53.46Minnesota MN 29 16.15 49.93 Tennessee TN 29 3.06 20.95 Minnesota MN 29 8.46 53.39Nebraska NE 30 15.96 49.71 Mississippi MS 30 2.76 19.03 New Hampshire NH 30 8.27 52.81Michigan MI 31 14.52 48.02 Florida FL 31 2.50 17.18 Ohio OH 31 8.06 52.16North Dakota ND 32 12.73 45.66 Washington WA 32 2.34 15.94 Washington WA 32 7.81 51.38Hawaii HI 33 12.66 45.55 Arizona AZ 33 2.21 14.86 Kansas KS 33 7.71 51.05Rhode Island RI 34 12.66 45.55 Texas TX 34 2.07 13.59 Missouri MO 34 7.61 50.75Ohio OH 35 11.24 43.42 Alabama AL 35 0.00 0.00 Tennessee TN 35 7.27 49.59New Mexico NM 36 10.89 42.85 Hawaii HI 35 0.00 0.00 North Carolina NC 36 7.02 48.70Tennessee TN 37 10.33 41.90 Idaho ID 35 0.00 0.00 Nebraska NE 37 6.84 48.07Washington WA 38 10.15 41.59 Kentucky KY 35 0.00 0.00 Virginia VA 38 6.77 47.82Alabama AL 39 9.89 41.12 Michigan MI 35 0.00 0.00 Pennsylvania PA 39 6.52 46.88Texas TX 40 8.48 38.36 Montana MT 35 0.00 0.00 Texas TX 40 6.42 46.47New Hampshire NH 41 8.27 37.91 Nevada NV 35 0.00 0.00 Kentucky KY 41 5.81 43.98Mississippi MS 42 7.37 35.84 New Hampshire NH 35 0.00 0.00 South Carolina SC 42 5.67 43.37Arizona AZ 43 6.63 33.96 New Mexico NM 35 0.00 0.00 Mississippi MS 43 4.61 38.18Kentucky KY 44 5.81 31.57 North Dakota ND 35 0.00 0.00 Arizona AZ 44 4.42 37.17South Carolina SC 45 5.67 31.13 Oklahoma OK 35 0.00 0.00 Florida FL 45 2.92 26.79Florida FL 46 5.42 30.34 Rhode Island RI 35 0.00 0.00 Nevada NV 46 2.82 25.89Nevada NV 47 2.82 18.58 South Carolina SC 35 0.00 0.00 Louisiana LA 47 2.71 24.88Oklahoma OK 48 2.11 13.40 South Dakota SD 35 0.00 0.00 Oklahoma OK 48 2.11 18.67South Dakota SD 49 0.00 0.00 Vermont VT 35 0.00 0.00 South Dakota SD 49 0.00 0.00Wyoming WY 49 0.00 0.00 Wyoming WY 35 0.00 0.00 Wyoming WY 49 0.00 0.00

Average 21.75 Average 11.25 Average 10.51Total 27,620 Total 14,280 Total 13,340D.C. 28.59 D.C. 5.05 D.C. 23.55

Per 100,000 Workers, 2003 Per 100,000 Workers, 2003Per 100,000 Workers, 2003Intensity of MicrobiologistsIntensity of Biological Scientists Intensity of Biochemists & Biophysicists


148151



7 8

Rank Statistic Score Rank Average ScoreAlaska AK 1 307.92 100.00 Delaware DE 1 89.21Delaware DE 2 206.00 92.98 Connecticut CT 2 78.96Washington WA 3 143.66 86.69 Maryland MD 3 77.62Montana MT 4 123.94 84.12 Massachusetts MA 4 72.65Idaho ID 5 107.91 81.70 New Jersey NJ 5 71.24Oregon OR 6 107.04 81.56 Colorado CO 6 68.91Wyoming WY 7 99.63 80.31 Montana MT 7 65.30Maryland MD 8 97.39 79.91 California CA 8 64.96North Dakota ND 9 85.95 77.73 Wisconsin WI 9 63.60Maine ME 10 76.38 75.67 Alaska AK 10 63.33Massachusetts MA 11 73.09 74.90 North Carolina NC 11 62.61North Carolina NC 12 64.76 72.79 Pennsylvania PA 12 62.48Iowa IA 13 60.12 71.49 Utah UT 13 62.38Connecticut CT 14 59.75 71.38 Oregon OR 14 61.88Utah UT 15 51.77 68.88 New York NY 15 61.10New Jersey NJ 16 51.16 68.67 Idaho ID 16 60.90Pennsylvania PA 17 46.02 66.83 Maine ME 17 60.83Minnesota MN 18 41.92 65.20 Indiana IN 18 60.60Colorado CO 19 41.18 64.89 Minnesota MN 19 59.48Mississippi MS 20 40.53 64.61 Iowa IA 20 59.34California CA 21 40.03 64.39 Kansas KS 21 58.87Hawaii HI 22 39.78 64.28 West Virginia WV 22 58.39Wisconsin WI 23 39.76 64.27 Nebraska NE 23 58.05New York NY 24 36.56 62.81 Virginia VA 24 55.86Oklahoma OK 25 33.76 61.42 Georgia GA 25 55.72New Mexico NM 26 31.31 60.11 Illinois IL 26 55.50West Virginia WV 27 30.82 59.83 Louisiana LA 27 55.27Nebraska NE 28 30.78 59.81 Vermont VT 28 54.90Kansas KS 29 27.74 57.99 Missouri MO 29 54.84Vermont VT 30 27.54 57.87 North Dakota ND 30 54.44Michigan MI 31 27.44 57.80 Arkansas AR 31 54.16Georgia GA 32 26.15 56.96 Washington WA 32 51.70Ohio OH 33 24.54 55.86 Ohio OH 33 51.60Alabama AL 34 23.07 54.78 New Mexico NM 34 51.33Florida FL 35 22.39 54.25 Michigan MI 35 50.52Texas TX 36 20.88 53.03 Hawaii HI 36 50.13Tennessee TN 37 20.66 52.85 Tennessee TN 37 49.74Virginia VA 38 20.02 52.30 Rhode Island RI 38 49.35Indiana IN 39 17.17 49.62 Mississippi MS 39 48.89Louisiana LA 40 16.23 48.64 Alabama AL 40 47.90South Carolina SC 41 15.31 47.61 Texas TX 41 46.59Arkansas AR 42 15.20 47.49 New Hampshire NH 42 46.45Kentucky KY 43 15.10 47.38 South Carolina SC 43 44.03Arizona AZ 44 14.60 46.79 Kentucky KY 44 41.31Nevada NV 45 11.27 42.27 Arizona AZ 45 38.54Illinois IL 46 10.58 41.17 Florida FL 46 37.61Rhode Island RI 47 10.55 41.12 Oklahoma OK 47 34.92New Hampshire NH 48 9.92 40.05 Wyoming WY 48 30.33Missouri MO 49 8.76 37.87 Nevada NV 49 29.48South Dakota SD 50 8.46 37.27 South Dakota SD 50 29.00

Average 38.47 Average 55.46Total 48,840D.C. 18.50

Composite Index, 2004Biopharmaceutical Human Cap & Workforce

Per 100,000 Workers, 2003Intensity of Biological Technicians


149152


IV. Biopharmaceutical Innovation Output

1 2 3

Rank Statistic Score Rank Statistic Score Rank Statistic ScoreNew Jersey NJ 1 2.035 100.00 Maryland MD 1 9.67 100.00 Vermont VT 1 27.8 100.00Delaware DE 2 1.691 96.52 Rhode Island RI 2 3.31 76.54 Delaware DE 2 24.2 95.79Connecticut CT 3 0.974 86.13 Massachusetts MA 3 3.23 76.03 North Dakota ND 3 20.7 91.20Pennslyvania PA 4 0.553 75.50 Delaware DE 4 3.14 75.40 South Dakota SD 4 19.8 89.82Massachusetts MA 5 0.471 72.46 Washington WA 5 2.90 73.62 Rhode Island RI 5 19.2 88.92North Carolina NC 6 0.421 70.33 Pennslyvania PA 6 2.44 69.92 Maryland MD 6 18.7 88.01Illinois IL 7 0.378 68.33 Oregon OR 7 2.43 69.80 New Hampshire NH 7 18.0 86.90Maryland MD 8 0.363 67.55 Minnesota MN 8 2.34 68.93 Nebraska NE 8 16.5 84.27Michigan MI 9 0.294 63.63 Nebraska NE 9 2.32 68.80 Hawaii HI 9 16.0 83.44California CA 10 0.222 58.32 South Dakota SD 10 2.11 66.73 New Mexico NM 10 12.6 76.30Indiana IN 11 0.207 57.01 North Dakota ND 11 2.10 66.64 Alabama AL 11 12.4 75.66Missouri MO 12 0.187 55.07 Tennessee TN 12 2.06 66.20 Montana MT 12 12.3 75.38Utah UT 13 0.186 55.02 New York NY 13 2.02 65.77 Iowa IA 13 10.8 71.46New York NY 14 0.167 52.91 Vermont VT 14 2.01 65.63 West Virginia WV 14 10.5 70.62Kansas KS 15 0.152 51.24 Wisconsin WI 15 1.98 65.28 Oklahoma OK 15 10.0 69.25Colorado CO 16 0.140 49.58 Ohio OH 16 1.97 65.14 Kansas KS 16 10.0 69.20West Virginia WV 17 0.138 49.33 Alabama AL 17 1.92 64.64 Massachusetts MA 17 9.8 68.71Minnesota MN 18 0.113 45.62 Texas TX 18 1.88 64.15 Oregon OR 18 9.5 67.81Texas TX 19 0.107 44.53 North Carolina NC 19 1.84 63.70 Nevada NV 19 9.4 67.32Georgia GA 20 0.078 38.56 New Hampshire NH 20 1.78 63.01 Utah UT 20 9.2 66.81Washington WA 21 0.075 37.96 Mississippi MS 21 1.70 61.99 Colorado CO 21 8.7 65.05Wisconsin WI 22 0.072 37.11 Indiana IN 22 1.59 60.48 Arkansas AR 22 8.7 64.92Iowa IA 23 0.069 36.45 Missouri MO 23 1.57 60.22 Missouri MO 23 8.6 64.68Virginia VA 24 0.057 32.79 Iowa IA 24 1.53 59.63 Arizona AZ 24 8.4 64.12Florida FL 25 0.055 32.04 Michigan MI 25 1.52 59.49 Kentucky KY 25 8.2 63.26Alabama AL 26 0.053 31.49 Illinois IL 26 1.48 58.91 Louisiana LA 26 7.9 62.30Arizona AZ 27 0.044 27.74 Colorado CO 27 1.44 58.37 South Carolina SC 27 7.8 61.71Ohio OH 28 0.037 24.65 Utah UT 28 1.40 57.68 Minnesota MN 28 7.7 61.49Alaska AK 29 0.000 0.00 Arizona AZ 29 1.27 55.54 Tennessee TN 29 7.6 61.04Arkansas AR 29 0.000 0.00 Connecticut CT 30 1.22 54.66 Washington WA 30 7.6 60.98Hawaii HI 29 0.000 0.00 Louisiana LA 31 1.10 52.52 Maine ME 31 7.4 60.30Idaho ID 29 0.000 0.00 California CA 32 1.10 52.38 Mississippi MS 32 7.3 59.97Kentucky KY 29 0.000 0.00 Kansas KS 33 1.07 51.78 North Carolina NC 33 7.1 59.05Louisiana LA 29 0.000 0.00 Hawaii HI 34 1.06 51.58 Ohio OH 34 6.7 57.34Maine ME 29 0.000 0.00 New Mexico NM 35 1.03 51.05 Wisconsin WI 35 6.6 56.66Mississippi MS 29 0.000 0.00 Georgia GA 36 1.01 50.58 Idaho ID 36 6.3 55.35Montana MT 29 0.000 0.00 Montana MT 37 1.00 50.39 Indiana IN 37 6.3 55.27Nebraska NE 29 0.000 0.00 Florida FL 38 0.97 49.81 Illinois IL 38 6.3 55.22Nevada NV 29 0.000 0.00 South Carolina SC 39 0.88 47.65 Pennslyvania PA 39 6.2 54.93New Hampshire NH 29 0.000 0.00 New Jersey NJ 40 0.83 46.27 Michigan MI 40 6.1 54.35New Mexico NM 29 0.000 0.00 Oklahoma OK 41 0.83 46.22 New York NY 41 5.9 53.63North Dakota ND 29 0.000 0.00 West Virginia WV 42 0.83 46.19 Connecticut CT 42 5.7 52.13Oklahoma OK 29 0.000 0.00 Wyoming WY 43 0.80 45.48 New Jersey NJ 43 5.2 49.45Oregon OR 29 0.000 0.00 Arkansas AR 44 0.79 45.13 Texas TX 44 5.1 48.94Rhode Island RI 29 0.000 0.00 Nevada NV 45 0.74 43.65 Florida FL 45 4.7 46.33South Carolina SC 29 0.000 0.00 Kentucky KY 46 0.73 43.47 Virginia VA 46 4.5 44.95South Dakota SD 29 0.000 0.00 Idaho ID 47 0.70 42.56 Georgia GA 47 4.4 44.75Tennessee TN 29 0.000 0.00 Alaska AK 48 0.67 41.55 California CA 48 3.5 37.48Vermont VT 29 0.000 0.00 Virginia VA 49 0.51 35.82 Alaska AK 49 3.0 33.11Wyoming WY 29 0.000 0.00 Maine ME 50 0.50 34.99 Wyoming WY 50 1.6 14.13

Average 0.237 Average 1.73 Average 7.08Total 306 Total 2,231 Total 9,141D.C. 0.752 D.C. 6.47 D.C. 27.1

Per 100,000 Employees, 2000-2003 Per 100,000 Employees, Currently Recruiting Per 100,000 Employees, Currently RecruitingFDA New Drugs Approval Clinical Trials (Phase I) Clinical Trials (Phase II)


150153



4 5 6

Rank Statistic Score Rank Statistic Score Rank Statistic ScoreVermont VT 1 31.5 100.00 Massachusetts MA 1 0.220 100.00 Delaware DE 1 7.67 100.00North Dakota ND 2 29.8 98.38 New Jersey NJ 2 0.126 81.91 Massachusetts MA 2 7.12 98.27Delaware DE 3 23.9 92.04 California CA 3 0.125 81.73 Maryland MD 3 5.86 93.79Rhode Island RI 4 23.0 90.84 Maryland MD 4 0.121 80.66 New Jersey NJ 4 5.32 91.56South Dakota SD 5 22.5 90.20 Washington WA 5 0.113 78.43 Connecticut CT 5 5.24 91.22Hawaii HI 6 20.6 87.72 North Carolina NC 6 0.079 66.83 Pennslyvania PA 6 3.60 82.58Nebraska NE 7 17.7 83.30 Pennslyvania PA 7 0.071 63.62 California CA 7 3.21 79.95Montana MT 8 17.5 83.00 Connecticut CT 8 0.061 58.45 New Hampshire NH 8 2.58 74.86New Mexico NM 9 17.0 82.18 Colorado CO 9 0.047 49.74 Indiana IN 9 2.46 73.82New Hampshire NH 10 14.4 77.36 Minnesota MN 10 0.038 42.94 Washington WA 10 2.24 71.68Utah UT 11 14.2 76.83 Tennessee TN 11 0.037 42.78 Colorado CO 11 2.01 69.15West Virginia WV 12 12.7 73.61 Wisconsin WI 12 0.036 41.42 Missouri MO 12 1.97 68.73South Carolina SC 13 11.8 71.45 Florida FL 13 0.027 32.69 New York NY 13 1.89 67.68Oregon OR 14 11.6 71.17 Michigan MI 14 0.023 26.46 Wisconsin WI 14 1.87 67.41Iowa IA 15 11.6 71.04 Texas TX 15 0.021 24.53 Rhode Island RI 15 1.86 67.36Maine ME 16 11.4 70.52 New York NY 16 0.012 5.62 North Carolina NC 16 1.82 66.87Idaho ID 17 11.4 70.48 Alabama AL 17 0.000 0.00 Utah UT 17 1.68 64.96Alabama AL 18 11.3 70.31 Alaska AK 17 0.000 0.00 Iowa IA 18 1.52 62.74Arkansas AR 19 11.3 70.25 Arizona AZ 17 0.000 0.00 Minnesota MN 19 1.48 62.11Kansas KS 20 11.3 70.24 Arkansas AR 17 0.000 0.00 Illinois IL 20 1.48 62.08Oklahoma OK 21 11.1 69.78 Delaware DE 17 0.000 0.00 Vermont VT 21 1.39 60.58Louisiana LA 22 10.5 68.05 Georgia GA 17 0.000 0.00 Michigan MI 22 1.34 59.74Nevada NV 23 10.3 67.61 Hawaii HI 17 0.000 0.00 Ohio OH 23 1.18 56.92Maryland MD 24 10.1 67.08 Idaho ID 17 0.000 0.00 Nebraska NE 24 1.17 56.57Kentucky KY 25 10.0 66.72 Illinois IL 17 0.000 0.00 Virginia VA 25 0.98 52.61Arizona AZ 26 9.7 65.74 Indiana IN 17 0.000 0.00 Oregon OR 26 0.89 50.29Mississippi MS 27 9.6 65.52 Iowa IA 17 0.000 0.00 Texas TX 27 0.88 50.02Colorado CO 28 9.5 65.23 Kansas KS 17 0.000 0.00 Montana MT 28 0.87 49.83Missouri MO 29 9.3 64.65 Kentucky KY 17 0.000 0.00 New Mexico NM 29 0.74 46.22Washington WA 30 8.8 63.17 Louisiana LA 17 0.000 0.00 Alabama AL 30 0.72 45.52Alaska AK 31 8.7 62.67 Maine ME 17 0.000 0.00 Hawaii HI 31 0.72 45.39Connecticut CT 32 8.6 62.52 Mississippi MS 17 0.000 0.00 Georgia GA 32 0.71 45.32Minnesota MN 33 8.6 62.23 Missouri MO 17 0.000 0.00 Kansas KS 33 0.71 45.19Tennessee TN 34 8.4 61.57 Montana MT 17 0.000 0.00 Tennessee TN 34 0.70 44.96Massachusetts MA 35 7.8 59.72 Nebraska NE 17 0.000 0.00 Arizona AZ 35 0.66 43.35North Carolina NC 36 7.5 58.58 Nevada NV 17 0.000 0.00 Maine ME 36 0.61 41.57Wisconsin WI 37 7.3 57.48 New Hampshire NH 17 0.000 0.00 Florida FL 37 0.58 40.53Indiana IN 38 7.0 56.44 New Mexico NM 17 0.000 0.00 Idaho ID 38 0.57 40.21New Jersey NJ 39 6.4 53.62 North Dakota ND 17 0.000 0.00 Wyoming WY 39 0.57 40.19Ohio OH 40 6.0 52.16 Ohio OH 17 0.000 0.00 Louisiana LA 40 0.55 39.33Pennslyvania PA 41 5.9 51.58 Oklahoma OK 17 0.000 0.00 Oklahoma OK 41 0.54 38.79Virginia VA 42 5.8 50.96 Oregon OR 17 0.000 0.00 Kentucky KY 42 0.47 35.63Georgia GA 43 5.7 50.57 Rhode Island RI 17 0.000 0.00 South Carolina SC 43 0.35 28.75Michigan MI 44 5.7 50.38 South Carolina SC 17 0.000 0.00 Arkansas AR 44 0.34 28.06Illinois IL 45 5.5 49.51 South Dakota SD 17 0.000 0.00 Mississippi MS 45 0.27 22.70Florida FL 46 4.5 43.35 Utah UT 17 0.000 0.00 Alaska AK 46 0.26 22.31New York NY 47 4.4 43.20 Vermont VT 17 0.000 0.00 Nevada NV 47 0.25 21.55Wyoming WY 48 4.0 40.19 Virginia VA 17 0.000 0.00 North Dakota ND 48 0.23 18.87Texas TX 49 3.6 37.10 West Virginia WV 17 0.000 0.00 South Dakota SD 49 0.21 16.63California CA 50 2.7 28.41 Wyoming WY 17 0.000 0.00 West Virginia WV 50 0.19 14.86

Average 7.20 Average 0.042 Average 1.95Total 9,298 Total 54 Annual Total 5,416D.C. 24.1 D.C. 0.000 D.C. 3.45

Clinical Trials (Phase III) Tech Fast 500 Companies in Biopharma Biopharmaceutical Patents IssuedPer 100,000 Employees, 2003 Per 100,000 People, 1993-2003 Avg.Per 100,000 Employees, Currently Recruiting


151154



7 8 9

Rank Statistic Score Rank Statistic Score Rank Statistic ScoreArizona AZ 1 6.22 100.00 Maryland MD 1 18.06 100.00 Maine ME 1 82.81 100.00Nevada NV 2 6.01 98.10 Massachusetts MA 2 11.57 91.43 Rhode Island RI 2 66.42 95.01Rhode Island RI 3 5.92 97.27 Missouri MO 3 11.19 90.79 Arkansas AR 3 61.66 93.32California CA 4 5.76 95.78 Pennslyvania PA 4 10.87 90.22 Kentucky KY 4 56.44 91.32Maine ME 5 5.43 92.59 Delaware DE 5 10.52 89.59 West Virginia WV 5 47.14 87.24New Hampshire NH 6 5.28 91.06 New Jersey NJ 6 10.13 88.87 Mississippi MS 6 43.15 85.24North Carolina NC 7 5.21 90.28 Indiana IN 7 9.63 87.89 Wyoming WY 7 39.63 83.31Oregon OR 8 5.06 88.68 Hawaii HI 8 9.14 86.88 Nevada NV 8 34.34 80.07New Mexico NM 9 5.02 88.28 Nebraska NE 9 8.75 86.06 Idaho ID 9 32.16 78.58Utah UT 10 4.90 86.99 Connecticut CT 10 8.30 85.05 North Dakota ND 10 29.63 76.73Arkansas AR 11 4.78 85.53 North Carolina NC 11 7.72 83.64 South Carolina SC 11 29.52 76.65Minnesota MN 12 4.59 83.36 Alabama AL 12 7.27 82.50 Utah UT 12 29.41 76.56Massachusetts MA 13 4.54 82.78 Washington WA 13 6.94 81.59 Minnesota MN 13 28.35 75.73Alabama AL 14 4.52 82.55 California CA 14 6.64 80.73 Tennessee TN 14 25.71 73.52Colorado CO 15 4.47 81.94 Iowa IA 15 6.42 80.09 Iowa IA 15 24.63 72.54Nebraska NE 16 4.45 81.73 Montana MT 16 5.56 77.34 Montana MT 16 21.71 69.68Vermont VT 17 4.37 80.65 Wisconsin WI 17 5.32 76.47 Nebraska NE 17 21.62 69.60Connecticut CT 18 4.36 80.55 New York NY 18 5.31 76.45 Hawaii HI 18 21.47 69.44Georgia GA 19 4.34 80.34 Virginia VA 19 5.27 76.30 Alabama AL 19 20.90 68.82Virginia VA 20 4.26 79.31 Utah UT 20 5.12 75.73 Oklahoma OK 20 20.82 68.74Texas TX 21 4.22 78.82 Rhode Island RI 21 5.08 75.60 Colorado CO 21 20.62 68.52South Dakota SD 22 4.20 78.51 Illinois IL 22 4.73 74.23 Vermont VT 22 20.43 68.32Maryland MD 23 4.18 78.19 Kansas KS 23 4.69 74.05 Arizona AZ 23 20.34 68.21Wisconsin WI 24 4.15 77.80 Maine ME 24 4.67 73.95 New Mexico NM 24 17.34 64.59New York NY 25 4.12 77.43 Arkansas AR 25 4.55 73.46 New Hampshire NH 25 16.98 64.13Oklahoma OK 26 4.08 76.91 Louisiana LA 26 4.53 73.37 South Dakota SD 26 16.67 63.70Indiana IN 27 3.98 75.62 Colorado CO 27 4.44 72.98 Oregon OR 27 15.51 62.08Washington WA 28 3.95 75.19 Tennessee TN 28 4.29 72.35 Massachusetts MA 28 15.33 61.81Ohio OH 29 3.87 74.05 Georgia GA 29 4.24 72.13 California CA 29 14.92 61.20Missouri MO 30 3.78 72.68 Wyoming WY 30 4.10 71.47 North Carolina NC 30 14.37 60.34Florida FL 31 3.78 72.68 New Hampshire NH 31 3.98 70.91 Washington WA 31 14.17 60.02Pennsylvania PA 32 3.76 72.53 Ohio OH 32 3.90 70.51 Missouri MO 32 13.92 59.62New Jersey NJ 33 3.56 69.44 Mississippi MS 33 3.71 69.55 Connecticut CT 33 13.63 59.15Michigan MI 34 3.44 67.59 Kentucky KY 34 3.65 69.22 Maryland MD 34 13.52 58.96Tennessee TN 35 3.42 67.34 New Mexico NM 35 3.53 68.60 Wisconsin WI 35 13.26 58.52Idaho ID 36 3.42 67.24 Michigan MI 36 3.47 68.27 Louisiana LA 36 11.70 55.69Illinois IL 37 3.38 66.69 Florida FL 37 3.38 67.74 Virginia VA 37 10.98 54.25Kansas KS 38 3.35 66.11 Oklahoma OK 38 3.22 66.79 Florida FL 38 10.62 53.50Montana MT 39 3.27 64.82 Texas TX 39 3.08 65.97 Pennslyvania PA 39 10.46 53.15Delaware DE 40 3.25 64.54 Alaska AK 40 2.77 63.93 Texas TX 40 8.25 47.77Mississippi MS 41 3.17 63.11 Minnesota MN 41 2.75 63.75 Michigan MI 41 8.12 47.43North Dakota ND 42 3.08 61.60 Oregon OR 42 2.54 62.23 Georgia GA 42 8.07 47.27Alaska AK 43 2.81 56.62 Vermont VT 43 2.18 59.29 Indiana IN 43 7.86 46.68Iowa IA 44 2.73 54.85 South Dakota SD 44 2.17 59.18 Ohio OH 44 7.59 45.90Kentucky KY 45 2.69 54.13 Arizona AZ 45 2.10 58.56 Delaware DE 45 7.52 45.67South Carolina SC 46 2.61 52.59 South Carolina SC 46 2.09 58.53 New York NY 46 7.04 44.19Hawaii HI 47 2.58 51.91 North Dakota ND 47 1.87 56.32 Kansas KS 47 6.83 43.52Louisiana LA 48 2.54 51.04 West Virginia WV 48 1.74 54.92 New Jersey NJ 48 5.06 36.71West Virginia WV 49 2.16 42.18 Nevada NV 49 1.55 52.72 Illinois IL 49 5.03 36.58Wyoming WY 50 1.70 29.03 Idaho ID 50 0.85 41.24 Alaska AK 50 -8.33 -48.00

Average 4.30 Average 6.19 Average 10.61Annual Total 17,308D.C. 3.02 D.C. 19.49 D.C. 10.23

Percent, 1993-2003 Avg.Percent Growth in Biopharma Patenting

Per Patent, 1993-2003 Avg. Percent of Total Patent, 1993-2003 Avg.Biopharmaceutical Patent Citations Percent of Patent in Biopharmaceutical


152155



10 11 12

Rank Statistic Score Rank Statistic Score Rank Statistic ScoreArizona AZ 1 1.05 100.00 California CA 1 1037.79 100.00 New Mexico NM 1 7.31 100.00New Mexico NM 2 1.04 99.83 Massachusetts MA 2 366.30 90.98 Oklahoma OK 2 7.63 97.91Rhode Island RI 3 1.01 99.32 New Jersey NJ 3 342.75 90.41 Kentucky KY 3 7.70 97.46New Hampshire NH 4 0.99 98.88 Pennsylvania PA 4 337.53 90.28 Arizona AZ 4 7.76 97.09California CA 5 0.96 98.17 New York NY 5 249.83 87.67 Maryland MD 5 7.82 96.71Maine ME 6 0.96 98.05 Maryland MD 6 214.53 86.35 Kansas KS 6 7.89 96.29Utah UT 7 0.86 95.87 Texas TX 7 134.01 82.28 California CA 7 7.93 96.07Vermont VT 8 0.85 95.64 Connecticut CT 8 127.10 81.82 Washington WA 8 8.00 95.64Alabama AL 9 0.84 95.42 Illinois IL 9 126.16 81.75 Pennsylvania PA 9 8.01 95.62Minnesota MN 10 0.84 95.29 North Carolina NC 10 119.46 81.28 New Jersey NJ 10 8.01 95.58North Carolina NC 11 0.83 95.02 Indiana IN 11 101.35 79.86 Wisconsin WI 11 8.03 95.49Massachusetts MA 12 0.82 94.66 Ohio OH 12 98.68 79.63 West Virginia WV 12 8.09 95.15Oregon OR 13 0.78 93.78 Washington WA 13 87.40 78.58 South Carolina SC 13 8.10 95.11Georgia GA 14 0.78 93.77 Missouri MO 14 81.09 77.93 Delaware DE 14 8.15 94.82Colorado CO 15 0.78 93.64 Michigan MI 15 80.84 77.90 Idaho ID 15 8.15 94.81New Jersey NJ 16 0.77 93.52 Wisconsin WI 16 71.68 76.86 Florida FL 16 8.16 94.75Pennsylvania PA 17 0.76 93.24 Colorado CO 17 66.35 76.19 New Hampshire NH 17 8.18 94.64Texas TX 18 0.75 92.83 Minnesota MN 18 60.79 75.43 Nebraska NE 18 8.19 94.59Missouri MO 19 0.74 92.59 Florida FL 19 58.53 75.11 North Carolina NC 19 8.24 94.31Ohio OH 20 0.74 92.49 Georgia GA 20 44.46 72.73 Massachusetts MA 20 8.28 94.10Hawaii HI 21 0.74 92.47 Delaware DE 21 42.73 72.38 Arkansas AR 21 8.30 94.01Delaware DE 22 0.72 92.07 Virginia VA 22 42.71 72.38 Iowa IA 22 8.38 93.55Wisconsin WI 23 0.72 92.02 Arizona AZ 23 34.31 70.48 Montana MT 23 8.39 93.52Connecticut CT 24 0.71 91.77 Utah UT 24 31.70 69.80 New York NY 24 8.40 93.45Kentucky KY 25 0.70 91.47 New Hampshire NH 25 31.22 69.66 Michigan MI 25 8.43 93.30New York NY 26 0.70 91.45 Alabama AL 26 26.96 68.39 Missouri MO 26 8.45 93.20Maryland MD 27 0.69 91.17 Tennessee TN 27 24.05 67.41 Illinois IL 27 8.50 92.95Illinois IL 28 0.69 91.15 Oregon OR 28 23.35 67.15 Colorado CO 28 8.55 92.67Indiana IN 29 0.69 90.94 Iowa IA 29 23.31 67.13 Texas TX 29 8.63 92.29Washington WA 30 0.67 90.40 Rhode Island RI 30 19.71 65.68 Wyoming WY 30 8.63 92.27Oklahoma OK 31 0.65 89.65 New Mexico NM 31 13.86 62.64 Tennessee TN 31 8.66 92.14Florida FL 32 0.64 89.49 Kentucky KY 32 13.30 62.28 South Dakota SD 32 8.72 91.85Kansas KS 33 0.63 89.00 Louisiana LA 33 11.95 61.35 Connecticut CT 33 8.77 91.62Virginia VA 34 0.62 88.90 Oklahoma OK 34 11.87 61.29 Hawaii HI 34 8.81 91.40Michigan MI 35 0.61 88.50 Kansas KS 35 11.86 61.28 Virginia VA 35 8.85 91.23Tennessee TN 36 0.61 88.30 Nebraska NE 36 10.57 60.29 Ohio OH 36 8.87 91.13Idaho ID 37 0.56 86.73 Maine ME 37 7.38 57.18 Georgia GA 37 9.09 90.10Nebraska NE 38 0.53 85.52 Vermont VT 38 7.14 56.89 Nevada NV 38 9.10 90.09Iowa IA 39 0.53 85.20 Hawaii HI 39 6.43 55.98 Indiana IN 39 9.10 90.08Mississippi MS 40 0.49 83.70 South Carolina SC 40 5.08 53.95 Rhode Island RI 40 9.25 89.41Louisiana LA 41 0.49 83.64 Idaho ID 41 4.10 52.09 Minnesota MN 41 9.26 89.36Montana MT 42 0.48 83.23 Montana MT 42 3.75 51.31 Maine ME 42 9.29 89.25Nevada NV 43 0.42 80.61 Mississippi MS 43 3.70 51.19 Alabama AL 43 9.29 89.23South Carolina SC 44 0.37 77.53 Arkansas AR 44 2.71 48.51 North Dakota ND 44 9.41 88.72West Virginia WV 45 0.35 76.58 Nevada NV 45 2.12 46.39 Mississippi MS 45 9.83 87.03Arkansas AR 46 0.30 73.24 West Virginia WV 46 1.22 41.56 Oregon OR 46 9.91 86.74Wyoming WY 47 0.12 53.42 Wyoming WY 47 0.34 30.47 Louisiana LA 47 10.19 85.70South Dakota SD 48 0.01 0.02 South Dakota SD 48 0.01 2.39 Alaska AK 48 10.37 85.03Alaska AK 49 0.00 0.00 Alaska AK 49 0.00 0.00 Utah UT 49 10.59 84.27North Dakota ND 49 0.00 0.00 North Dakota ND 49 0.00 0.00 Vermont VT 50 10.61 84.23

Average 0.63 U.S. 3396.59 Average 8.62

D.C. 0.81 D.C. 15.95 D.C. 7.87

Biopharmaceutical Current Impact Index (CII) Biopharmaceutical Technological Strength Biopharmaceutical Technological Cycle TimeNormalized Patent Citation, 1993-2003 Current Impact Index X # of Patents, Avg. 93-03 Avg. 1993-2003


153156



13 14 15

Rank Statistic Score Rank Statistic Score Rank Average ScoreNebraska NE 1 24.43 100.00 California CA 1 13156.14 100.00 Massachusetts MA 1 83.47Rhode Island RI 2 24.37 99.92 Massachusetts MA 2 5752.18 91.28 New Jersey NJ 2 81.58Texas TX 3 24.37 99.92 New York NY 3 3392.64 85.71 Maryland MD 3 81.54Massachusetts MA 4 23.63 98.96 Maryland MD 4 3229.59 85.19 Connecticut CT 4 77.81Washington WA 5 22.09 96.85 Pennsylvania PA 5 3086.36 84.71 Delaware DE 5 77.06Minnesota MN 6 22.03 96.76 New Jersey NJ 6 2385.32 82.00 Pennslyvania PA 6 75.44California CA 7 21.84 96.50 Texas TX 7 2218.36 81.23 North Carolina NC 7 73.72Oregon OR 8 21.35 95.78 Illinois IL 8 1557.32 77.50 California CA 8 73.08Oklahoma OK 9 21.19 95.55 Washington WA 9 1546.00 77.42 Washington WA 9 67.17Colorado CO 10 20.71 94.83 Connecticut CT 10 1457.55 76.80 Colorado CO 10 66.39Vermont VT 11 20.05 93.81 North Carolina NC 11 1447.45 76.73 Minnesota MN 11 64.05Maryland MD 12 19.20 92.46 Wisconsin WI 12 1018.27 73.02 Michigan MI 12 62.87North Carolina NC 13 19.15 92.38 Michigan MI 13 1009.27 72.93 Missouri MO 13 62.34Wisconsin WI 14 19.00 92.14 Colorado CO 14 985.36 72.68 Utah UT 14 62.30Arizona AZ 15 18.16 90.73 Ohio OH 15 903.50 71.76 Illinois IL 15 61.90New York NY 16 18.14 90.69 Missouri MO 16 893.86 71.65 Indiana IN 16 61.37Georgia GA 17 17.96 90.38 Indiana IN 17 866.82 71.32 Wisconsin WI 17 61.25Connecticut CT 18 17.88 90.23 Minnesota MN 18 794.68 70.41 New York NY 18 61.04Louisiana LA 19 17.62 89.78 Florida FL 19 550.59 66.54 Texas TX 19 58.15Iowa IA 20 17.57 89.68 Georgia GA 20 535.73 66.25 Iowa IA 20 55.87Tennessee TN 21 17.42 89.43 Virginia VA 21 518.95 65.92 Kansas KS 21 55.08Kentucky KY 22 17.38 89.34 Iowa IA 22 450.50 64.42 Alabama AL 22 54.74South Dakota SD 23 17.27 89.15 Tennessee TN 23 386.14 62.80 Rhode Island RI 23 53.60Alabama AL 24 17.07 88.78 Oregon OR 24 364.82 62.20 Arizona AZ 24 52.89Utah UT 25 17.07 88.78 Arizona AZ 25 355.00 61.91 Florida FL 25 52.32Illinois IL 26 16.49 87.69 Utah UT 26 348.41 61.71 Georgia GA 26 52.12Michigan MI 27 16.00 86.75 Delaware DE 27 320.91 60.85 Ohio OH 27 51.08Missouri MO 28 15.65 86.07 Alabama AL 28 298.55 60.09 Virginia VA 28 50.71New Hampshire NH 29 15.37 85.50 New Hampshire NH 29 277.00 59.30 New Hampshire NH 29 50.55Virginia VA 30 15.16 85.07 Rhode Island RI 30 264.59 58.81 Nebraska NE 30 49.29Kansas KS 31 15.15 85.05 Nebraska NE 31 257.82 58.54 West Virginia WV 31 49.05Montana MT 32 15.13 85.00 Louisiana LA 32 228.27 57.26 Tennessee TN 32 48.88Mississippi MS 33 15.08 84.90 Oklahoma OK 33 201.36 55.93 Vermont VT 33 48.68Ohio OH 34 14.84 84.40 Kentucky KY 34 156.27 53.26 Oregon OR 34 46.40Wyoming WY 35 14.74 84.20 New Mexico NM 35 98.95 48.44 New Mexico NM 35 45.77West Virginia WV 36 14.06 82.71 Kansas KS 36 98.59 48.40 Hawaii HI 36 43.97Pennsylvania PA 37 14.06 82.71 Vermont VT 37 95.23 48.04 Montana MT 37 43.96Arkansas AR 38 13.77 82.05 South Carolina SC 38 90.45 47.50 Oklahoma OK 38 43.78New Mexico NM 39 13.36 81.12 Montana MT 39 77.64 45.89 Maine ME 39 43.34Florida FL 40 13.08 80.45 Arkansas AR 40 57.41 42.70 Kentucky KY 40 42.66Indiana IN 41 12.95 80.15 Mississippi MS 41 56.77 42.59 Arkansas AR 41 41.46New Jersey NJ 42 12.41 78.81 Hawaii HI 42 56.59 42.55 Louisiana LA 42 40.97South Carolina SC 43 11.44 76.27 Idaho ID 43 48.00 40.82 Mississippi MS 43 40.01Idaho ID 44 11.22 75.65 Maine ME 44 46.36 40.45 Idaho ID 44 39.30Delaware DE 45 11.18 75.53 Wyoming WY 45 38.82 38.58 South Carolina SC 45 38.82Hawaii HI 46 11.08 75.27 Nevada NV 46 28.00 35.13 Nevada NV 46 38.62Nevada NV 47 8.66 67.57 West Virginia WV 47 24.55 33.74 South Dakota SD 47 34.88Maine ME 48 8.37 66.47 South Dakota SD 48 22.50 32.83 North Dakota ND 48 33.38North Dakota ND 49 7.64 63.61 North Dakota ND 49 12.64 26.74 Wyoming WY 49 33.15Alaska AK 50 5.85 55.27 Alaska AK 50 9.05 23.22 Alaska AK 50 20.90

Average 16.39 Average 1041.54 Average 54.18

D.C. 16.81 D.C. 166.41

Biopharmaceutical Innovation OutputComposite Index,2004

Biopharmaceutical Science Linkage Biopharmaceutical Science StrengthAverage Citations, Avg. 1993-2003 Total Citations, Avg. 1993-2003


154157


State Biopharmaceutical Index, 2004

Rank Average ScoreMassachusetts MA 1 85.83Maryland MD 2 82.29Connecticut CT 3 81.15New Jersey NJ 4 79.78Pennslyvania PA 5 75.44California CA 6 75.32North Carolina NC 7 74.95Washington WA 8 70.90Colorado CO 9 70.48New York NY 10 66.48Utah UT 11 65.93Illinois IL 12 65.00Delaware DE 13 64.95Minnesota MN 14 63.71Missouri MO 15 62.05Rhode Island RI 16 60.88Wisconsin WI 17 60.80Michigan MI 18 60.71Ohio OH 19 59.88Texas TX 20 59.54Indiana IN 21 58.19Georgia GA 22 56.41Alabama AL 23 55.90Virginia VA 24 53.97Arizona AZ 25 53.61New Hampshire NH 26 53.46Maine ME 27 52.74Iowa IA 28 52.10Nebraska NE 29 51.22New Mexico NM 30 51.17Vermont VT 31 50.95Kansas KS 32 50.05Tennessee TN 33 48.92Oregon OR 34 47.49Florida FL 35 46.76Montana MT 36 46.46Hawaii HI 37 43.54Kentucky KY 38 42.35South Carolina SC 39 39.75Louisiana LA 40 39.60West Virginia WV 41 38.93Arkansas AR 42 38.21Oklahoma OK 43 37.64Mississippi MS 44 37.48Idaho ID 45 37.10North Dakota ND 46 32.26Nevada NV 47 31.96Wyoming WY 48 28.69South Dakota SD 49 26.84Alaska AK 50 25.37

Average 54.30

State Biopharmaceutical Index2004


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Data Source

Biopharmaceutical Research Funding Industrial R&D to Biopharmaceuticals National Science Foundation National Institutes of Health (NIH) Funding Total National Institutes of Health National Institutes of Health (NIH) Funding to Biopharmaceuticals National Institutes of Health Academic R&D to Biopharmaceuticals National Science Foundation National Science Foundation (NSF) Funding to Biopharmaceuticals National Science Foundation Small Business Technology Transfer (STTR) Awards to Life Science National Institutes of Health Small Business Innovation Research (SBIR) Awards to Life Science National Institutes of Health

Biopharmaceutical Risk Capital FundingTotal Biotech Venture Capital Investment Growth PricewaterhouseCoopers Biotech Companies Receiving VC Investment Growth PricewaterhouseCoopers Biotech Venture Capital Investment PricewaterhouseCoopers

Biopharmaceutical Human Capital & Workforce Number of Graduate Students in Biopharmaceuticals National Science Foundation Percent of Bachelor's Degrees Granted in Biopharmaceuticals National Science Foundation Number of Institutions Offering Biopharmaceutical Degrees National Science Foundation Intensity of Biological Scientists Bureau of Labor Statistics Intensity of Biochemists and Biophysicists Bureau of Labor Statistics Intensity of Microbiologists Bureau of Labor Statistics Intensity of Biological Technicians Bureau of Labor Statistics

Biopharmaceutical Innovation Output US Food and Drug Administration (FDA) New Drug Approval US Food and Drug Administration Clinical Trial (Phase I) US Food and Drug Administration Clinical Trial (Phase II) US Food and Drug Administration Clinical Trial (Phase III) US Food and Drug Administration Tech Fast 500 Companies in Biopharmaceuticals Deloitte Biopharmaceutical Patents Issued CHI Research, Inc. Biopharmaceutical Patent Citations CHI Research, Inc. Percent of Patent in Biopharmaceuticals CHI Research, Inc. Percent Growth in Biopharmaceutical Patenting CHI Research, Inc. Biopharmaceutical Current Impact Index (CII) CHI Research, Inc. Biopharmaceutical Technological Strength CHI Research, Inc. Biopharmaceutical Technological Cycle Time CHI Research, Inc. Biopharmaceutical Science Linkage CHI Research, Inc. Biopharmaceutical Science Strength CHI Research, Inc.


156

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10-year Industry Projection

MethodologyThis section provides a 10-year projection of the biopharmaceutical industry and its relative importance to the total nonfarm sector in each state. It also explains whether states are likely to be gaining or losing relative to other states. The projections consist of biopharmaceutical employment, real output and earnings for all states and the District of Columbia from 2004 to 2014. This 10-year forecast also shows the economic contributions of the industry to all states by applying the current RIMS multipliers in 2014.

The 10-year projection is based on an econometric model derived through log-linear equation specifications. The model incorporates historical relationships between determinants of state performance relative to the nation and with respect to the biopharmaceutical industry. A state’s research, financial and human capital infrastructure (in terms of biopharmaceuticals) is among the significant determinants taken into consideration. The relative performance of these regional assets dictates the future well-being of the biopharmaceutical industry in each state. Long-term growth factors such as R&D funding capacity, venture capital investment and workforce quality with respect to the biopharmaceutical industry are embedded in the model’s framework. Thus, if a state has historically taken advantage of its regional assets, its projections for the next 10 years are likely more optimistic. For those states that have only recently developed their biopharmaceutical industry, projections depend upon how well they can capitalize on their recent successes and future innovation. In preserving the importance of relative performance, these essential determinants are scaled by national figures, nonfarm employment, real gross state product, and/or total population.

Historical trends provide a basis for projections of what the contributions of the biopharmaceutical industry will be in terms of employment, earnings and real output. Our forecast method incorporates assumptions about demographic and economic changes, such as the projected demographic composition of the workforce as the population ages and changes. For instance, the baby-boom generation (born 1946-62) will account for a substantial share of the population over 50 and of the labor force in 2014, while the supply of workers between 25 and 34 years of age is more limited due to the decrease in birth rates in the late 1960s and early 1970s. This could translate into a hiring slowdown in the biopharmaceutical industry. We further project that the labor force participation rate of women is expected to increase.

Moreover, our forecast analysis takes future growth trends affecting the biopharmaceutical industry into consideration, including technology trends impacting the industry such as the impact of information technology on pharmaceutical manufacturing. We further recognized the expansion and innovation of information-based technologies, such as genomics, nanotechnology and reproductive technologies that will translate into job creation primarily in the R&D-based biopharmaceutical industry. Likewise, by addressing industry trends, we incorporated how technology will create new patterns of drug discovery and drug development that will stimulate the building of more manufacturing facilities and job growth.

In addressing the projected substantial growth in the use of prescription medication, we incorporated assumptions about market size, consumption data and consumer behavior. The population aged 65

10-year Industry ProjectionVI.

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and older is projected to increase substantially in the next decades, presenting opportunities for the biopharmaceutical industry and health care providers. The size of the baby-boom generation is especially important to the biopharmaceutical industry because the older population tends to depend more on medicines than younger people. Moreover, the revolution in longevity – four-generation families will soon become the norm – is fueling the demand for prescription drugs and related products.

We also considered how new cures and treatments will increase life expectancy and how public mood toward biopharmaceuticals and scientific discovery is changing. In addition, when evaluating what the demographic makeup of the population in need of biopharmaceutical products is likely to be, we made assumptions about racial and ethnic characteristics and the fertility rate of women that could have an influence on the demand for pharmaceutical products and related purchases.

Finally, we took into consideration the socioeconomic factors of each state, such as business climate, which includes the cost of doing business, affordable housing, education systems and quality of the labor force that support the biopharmaceutical industry and its growth. These projections are based upon the assumption that government policies continue to encourage basic and applied research and development in the biopharmaceutical field.

United StatesIn the United States, employment within the biopharmaceutical industry is projected to grow from 413,800 in 2004 to 536,300 in 2014. As a result, the industry’s national share of employment as a percent of total nonfarm employment is expected to increase from 0.32 to 0.35 percent, representing an increase of 11.4 percent.

20142013

20122011

20102009

20082007

20062005

2004

0.36

0.35

0.34

0.33

0.32

0.31

Percent

Source: Milken Institute, Economy.com, BLS.

Biopharmaceutical Share of Total Employment ForecastUnited States, 2004-2014

When the full extent of multiplicative dynamics is accounted for, we project the biopharmaceutical industry will generate 3,616,580 jobs (total impact) by 2014.

Even more promising are real output projections with respect to biopharmaceuticals. Real industry output (based on inflation-adjusted 1996 dollars) is expected to increase from $69.2 billion in 2004


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to $128.3 billion in 2014. More significantly, this represents a growing share of real industry output relative to total real gross state product. Biopharmaceutical share of real gross state product is expected to increase from 0.68 to 0.90 percent, an increase of 32.3 percent.

20142013

20122011

20102009

20082007

20062005

2004

0.95

0.90

0.85

0.80

0.75

0.70

0.65

Percent


Biopharmaceutical Share of Total Real Output ForecastUnited States, 2004-2014

The industry would produce an additional $221.8 billion (indirect + induced impact) in real output among other sectors, accounting for $350.1 billion worth of real output overall by 2014.

Finally, total earnings generated from the biopharmaceutical industry are anticipated to increase from $31.4 billion in 2004 to $56.6 billion in 2014. Industry share of earnings relative to total non-farm earnings would also increase from 0.60 to 0.68 percent, a growth rate of 13.4 percent.

20142013

20122011

20102009

20082007

20062005

2004

0.70

0.68

0.66

0.64

0.62

0.60

0.58

Percent


Biopharmaceutical Share of Total Earnings ForecastUnited States, 2004-2014

Considering the ripple effects, the industry is expected to generate $218 billion in earnings in all industries.


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AlabamaAlabama’s biotech industry projection shows the state more than doubling its employment from 1,480 to 3,620 between 2004 and 2014. More importantly, the industry’s contribution toward overall state employment share is expected to grow from 0.08 percent to 0.17 percent during that time. According to the forecast, by 2014, biopharmaceuticals is expected to account for 9,580 jobs in the state (total impact).

Real industry output in the state is expected to grow in a similar fashion. Real biopharmaceutical output is projected to reach $234.4 million by 2014 – a 137.7 percent increase from 2004. Its overall contribution toward share of real gross state product is anticipated to increase from 0.08 to 0.14 percent.

Industry earnings are estimated to increase by 59.1 percent between 2004 and 2014.

AlaskaThe biopharmaceutical industry has not been established as a major contributor to the state’s economy. Although some growth is projected in terms of employment, real output and earnings, it is relatively small because of the state’s low base.

ArizonaBiopharmaceutical industry employment in the state is projected to decrease from 1,120 to 930 between 2004 and 2014. Its contribution to overall nonfarm employment will also decrease slightly from 0.05 to 0.03 percent during that time. Industry contribution with respect to real output in the state tapers off from 0.08 to 0.03 percent, a decrease of 60 percent.

ArkansasFor the most part, Arkansas’ forecast with respect to biopharmaceuticals remains stagnant over time. The state projections suggest that the state must take more effective measures if it intends to expand in biopharmaceuticals.

With respect to employment, Arkansas’ biopharmaceutical industry is expected to grow by 6.5 percent over the forecast period, an increase of 30 employees from 350 employees in 2004 to 380 employees in 2014. Arkansas’ biopharmaceutical industry will gain an additional 370 jobs generated by widespread ripple effects throughout the state economy in 2014.

CaliforniaEmployment projections show that California will add 28,340 jobs in the next decade, increasing its overall employment base in the industry to 99,610 by 2014. The state’s industry share of total nonfarm employment will increase from 0.49 to 0.58 percent (19 percent growth rate), rising slightly faster than the national industry share. California’s biopharmaceutical industry will create a total of 451,450 jobs in the state by 2014 when indirect and induced effects are accounted for.


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State projections for real output are expected to rise two-and-a-half times faster than employment growth. Real industry output will increase by $11.7 billion between 2004 and 2014. Industry share of total real output in the state will increase from 0.81 to 1.14 percent – a 40 percent increase – rising faster than the national average (32.3 percent increase in overall contribution). While the industry will directly represent $22.9 billion in real output by 2014, its overall contribution will actually exceed $50 billion generated throughout the rest of the state’s economy via indirect and induced impacts.

In addition, biopharmaceutical earnings in the state will increase by 94 percent, from $5.6 billion to $11.1 billion between 2004 and 2014. The industry contribution to overall earnings is projected to increase from 0.84 to 1.01 percent. Biopharmaceuticals in the state will be responsible for a total of $32.2 billion in earnings in all industries generated through the industry’s ripple effects.

ColoradoColorado’s biopharmaceutical employment is projected to increase from 5,170 to 6,390 between 2004 and 2014. However, the state’s industry contribution toward total real output is projected to remain fairly stationary through 2014 (going from 0.30 to 0.32 percent), slightly underperforming relative to the nation (going from 0.68 to 0.90 percent).

The biopharmaceutical industry will be responsible for 24,350 jobs and $1.6 billion in real output overall (total impacts).

ConnecticutBiopharmaceutical employment in the state is expected to increase by 4,680 between 2004 and 2014, a 45.4 percent increase that will raise the industry employment base to 15,010. Connecticut’s biopharmaceutical share of total nonfarm employment would thus increase from 0.63 to 0.81 percent, an increase of 29.3 percent, faster than the nation’s 11.4 percent. The industry will generate almost 77,000 jobs in the state, when accounting for the multiplier impacts.

Real industry output is projected to grow more than three times faster than employment during the forecast period, signifying high productivity levels in the state. The industry’s share of real output contributes remarkably to total real output in the state, increasing from 1.19 to 2.06 percent – a growth rate of 72.8 percent – from 2004 to 2014, while outperforming the growth rate of 32.3 percent in the nation. Industry share of earnings is expected to grow by 35.5 percent from 1.51 to 2.05 percent, while adding over $1.4 billion in earnings over the forecast period.

DelawareEmployment and real output in the biopharmaceutical industry are projected to reach 1,870 employees and $236.4 million, respectively, by 2014. In addition, biopharmaceuticals will be responsible for 8,020 jobs and $404.6 million worth of real output as a result of economic activity generated by the industry’s total impact.


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According to the forecast, the industry is projected to generate $131.8 million in earnings in 2014, a growth rate of 47.1 percent over the 2004-2014 period. The indirect and induced impacts will add $224.8 million to the direct earnings, reaching a total of $356.6 million in 2014.62

District of ColumbiaAccording to District of Columbia projections, employment in biopharmaceuticals is expected to increase by 720 jobs signifying an increase of 25.0 percent from 2,850 in 2004 to 3,570 in 2014. The industry’s share toward overall employment is expected to rise slightly faster relative to the national share, rising from 0.42 to 0.48 percent. In contrast, the national share is expected to increase from 0.32 percent to 0.35 percent.

Similarly, the industry’s real output is anticipated to increase from $182.8 million in 2004 to $254.5, reflecting an increase of 39.2 percent.

Industry earnings portray an even more promising outcome, growing by 75.6 percent over the forecast period ($189.2 million in 2004 to $332.3 million in 2014).

FloridaFlorida’s projections show that the state will expand employment and real output in the biopharmaceutical industry by 4,500 jobs and $1.6 billion, respectively, over the next 10 years. More importantly, the forecast shows biopharmaceuticals as a growing share of total nonfarm employment, real output and earnings in the state. This rising contribution is also outpacing the national industry share, indicating that the state is performing better than most states.

The biopharmaceutical industry is projected to generate 37,930 jobs and $4.5 billion in real output by 2014 in all industries (total impact).

GeorgiaAlthough the state’s industry employment forecast seems rather steady, rising by 4.5 percent between 2004 and 2014, its real output and earnings projections grow by a relatively larger amount – 31.8 and 76.2 percent, respectively.

By 2014, the industry will be accountable for 18,160 jobs, $1.8 billion in real output and $1.4 billion in earnings in all industries (total impact).

HawaiiWhile industry projections for Hawaii seem to point in the upward direction, the state is projected to have a low biopharmaceutical employment base of 520 workers and $45.8 million in real industry output by 2014.


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From 2004 to 2014, employment in the state’s biopharmaceutical industry is expected increase 57.1 percent from 330 employees in 2004 to 520 employees in 2014. Hawaii’s direct employment in biopharmaceuticals will generate an additional 620 employees (indirect and induced impacts) in all industries combined for a total of 1,140 employees in 2014.

IdahoThe industry in the state has not yet been established, and therefore has low significance with respect to the current forecast.

With respect to real output, industry projections suggest that biopharmaceuticals will contribute $700,000 to the state’s GSP in 2014. The forecast further indicates that a total of $1.2 million in real output will be generated in 2014 (total impact).

IllinoisThe state is expected to add 2,230 jobs and $954.6 million in real output to its existing biopharmaceutical employment and real output base over the forecast period. While the industry is projected to grow in terms of employment, real output and earnings, its performance relative to the overall state economy is to slightly decline through 2014. However, when accounting for the industry’s ripple effects, biopharmaceuticals will be responsible for 140,930 jobs and $9.7 billion in real output by 2014.

Moreover, earnings directly attributable to the state’s biopharmaceutical industry are predicted to increase 45.9 percent in the next decade, from $1.8 billion in 2004 to $2.6 billion in 2014. More significantly, the industry will be accountable for an additional $6.7 billion (indirect and induced impacts) for a total of $9.3 billion in earnings.

IndianaIndustry projections indicate that the state will add 4,000 workers, increasing the state biopharmaceutical employment level to 23,590 by 2014. In terms of real output, the industry is expected to contribute twice as much, that is, real industry output will increase from $6.4 billion to $11.8 billion during the projection period, representing an increase of 85.9 percent.

More significantly, the industry is projected to grow faster than nonfarm employment, therefore contributing to a higher share of the state economy over time. In terms of real output, biopharmaceuticals will account for 4.57 percent of the state’s total real gross state product in 2014, up from 3.28 in 2004.

The industry will be accountable for a total of 141,000 jobs and $23.6 billion in real output (total impacts) by 2014.


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IowaBiopharmaceutical employment in the state is expected to increase by 590 jobs (or by 22.6 percent) in the next decade, pushing up the total industry base to 3,180. Meanwhile, industry earnings are projected to grow by 60.7 percent, rising to $146.6 million.

Another way to examine the biopharmaceutical industry’s future performance is by looking at the industry’s anticipated contribution toward real output. Doing so reveals that by 2014, Iowa’s biopharmaceutical industry will be accountable for $251.4 million in real output. The forecast estimates the industry will generate a total of $427.6 million in real output (total impact).

KansasWhile state projections expect biopharmaceutical employment to taper off (about 1,000 workers in 2014), real industry output portrays more positive signs in terms of growth, rising by 36.0 percent over the forecast period. Industry earnings in the state are expected to reach $89.7 million by 2014.

KentuckyState projections portray a 37.1 percent increase (or an additional 880 jobs) in the biopharmaceutical industry, while contributing to a higher share of total nonfarm employment through 2014. The industry’s ripple effects will result in a total of 10,740 jobs throughout the state economy.

With regard to real output, the forecast anticipates improved productivity performance over the 2004-2014 period (a 45.1 percent growth rate). Kentucky’s biopharmaceutical industry is expected to grow from $194.4 million in 2004 to $282.1 million in real output in 2014. The projections further indicate that the biopharmaceutical share of total real output is predicted to increase from 0.16 percent in 2004 to 0.18 percent in 2014. In addition, Kentucky’s biopharmaceutical industry will generate $502.1 million in real output in 2014 taking the total impact into account.

LouisianaEmployment and real output in the biopharmaceutical industry are projected to be 480 employees and $18.7 million in 2014, respectively. The state has not yet established its biopharmaceutical workforce relative to other regions. The biopharmaceutical industry is expected to create an additional 670 jobs (indirect and induced impacts) in all industries within the state, amounting to a total impact of 1,150 employees by 2014.

MaineMaine’s biopharmaceutical industry appears to be rather stagnant. Biopharmaceuticals is projected to employ 1,320 workers and produce $115.9 million in the state by 2014.

The industry will account for 3,730 jobs and $208.5 million in real output by 2014 as a result of the total impact.


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MarylandThe 10-year projections indicate Maryland’s biopharmaceutical workforce will expand by 62.4 percent, from 11,110 employees in 2004 to 18,040 employees in 2014, accounting for a share of 0.61 percent of the state’s total nonfarm employment in 2014. This forecast indicates that Maryland’s employment within the biopharmaceutical industry will grow faster relative to the U.S., which is anticipated to grow by 29.6 percent. The industry’s ripple effects will translate into an additional 41,050 employees (indirect and induced impact) in all industries throughout the state for a total of 59,090 employees in 2014.

Taking multiplier impacts into account, the industry is expected to contribute a total of $8.8 billion in real output to the state’s economy in 2014.

The forecast reveals that earnings generated by Maryland’s biopharmaceutical industry are projected to increase from $731.4 million in 2004 to $1.7 billion in 2014.

MassachusettsMassachusetts’ biopharmaceutical industry is expected to experience substantial job gains by 2014. The 2004-2014 projections indicate that employment in the biopharmaceutical industry is expected to grow by 64.3 percent, faster than the nation (29.6 percent). The importance of the state’s biopharmaceutical industry is further underscored by the biopharmaceutical employment share of the state’s total nonfarm employment base, projected to increase from 0.71 percent in 2004 to 1.05 percent in 2014.

In terms of earnings, Massachusetts’ biopharmaceutical industry is projected to generate $4.2 billion earnings in 2014, growing by 144.8 percent over the next decade. Indirect and induced impacts will add $6.6 billion to the direct earnings of $4.2 billion for a total of $10.8 billion in 2014.

Furthermore, the industry is expected to contribute $7.6 billion in direct output to the state’s real GSP in 2014.

MichiganThe projections on Michigan’s biopharmaceutical industry indicate that it will account for 10,350 workers in 2014. Its direct employment will generate an additional 39,170 employees in all industries combined, representing a total of 49,520 in 2014.

The vital role played by the state’s biopharmaceutical industry also becomes apparent when looking at the earnings forecast. As a result of indirect and induced impacts that ripple through the state economy, a total of $3.2 billion will be attributable to the industry in Michigan in 2014.

In addition, Michigan’s biopharmaceutical industry is projected to contribute $2.1 million in real output in 2014.


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MinnesotaIn 2014, Minnesota’s biopharmaceutical industry is projected to have 2,390 employees. An additional 5,760 jobs will be created by indirect and induced impacts of the industry. With respect to real output, Minnesota’s biopharmaceutical industry is projected to contribute $383.1 million in direct output to the state’s real GSP in 2014.

A total of $509.9 million in earnings will be attributable to the state’s biopharmaceutical industry, consisting of $199.3 million in earnings derived from the direct impact and an additional $310.6 million in earnings stemming from indirect and induced impacts.

MississippiThe industry trends for Mississippi’s biopharmaceutical industry show that over the 2004-2014 decade, biopharmaceutical employment is projected to increase to 950 employees. The industry’s total impact will result in 2,380 jobs in all industries combined in 2014.

In terms of real output, Mississippi’s biopharmaceutical industry is projected to contribute $158.5 million to the state’s real GSP in 2014.

Though not as significant as in the national growth number, earnings directly contributed by the biopharmaceutical industry are projected to grow by 6.6 percent, totaling $63.0 million in 2014.

MissouriEmployment in the state’s biopharmaceutical industry is projected to increase by 25.8 percent over the next 10 years from 5,960 employees in 2004 to 7,500 employees in 2014. As a consequence, the state’s biopharmaceutical labor force share of the state’s total nonfarm employment base will increase from 0.22 percent in 2004 to 0.25 percent in 2014. The state’s biopharmaceutical industry will have ripple effects through the entire economy that will result in a total of 41,310 employees in 2014.

The real output for biopharmaceuticals is expected to increase from $1.1 billion in 2004 to $2.2 billion in 2014.

Over the 2004-2014 period, total earnings generated from the state’s biopharmaceutical industry are projected to increase from $429.3 million to $582.2 million. In contrast, the biopharmaceutical industry’s share of earnings relative to total nonfarm earnings is expected to decline by 10 percent, from 0.44 percent to 0.40 percent between 2004 and 2014.

Montana Measuring the economic performance of the state’s biopharmaceutical industry, the forecast shows the supply of workers in Montana’s biopharmaceutical industry is projected to increase by 43.1 percent over the 2004-2014 period from 550 employees in 2004 to 790 employees in 2014. Moreover, biopharmaceutical employment is projected to account for 0.17 percent of total nonfarm employment in 2014.


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NebraskaOver the 2004-2014 period, Nebraska’s biopharmaceutical employment is projected to grow by 22.3 percent; more slowly than the national average (29.6 percent). Nebraska’s biopharmaceutical industry is expected to generate 420 additional jobs during this period, rising from 1,890 to 2,310 employees over the forecast period. In 2014, 2,310 employees are projected to account for 0.22 percent of the state’s total employment base.

The forecast further indicates that real output generated by the state’s biopharmaceutical industry is expected to grow by 43.2 percent over the projection decade, reaching $483.1 million in 2014.

NevadaThe 10-year projections of the state’s biopharmaceutical industry reveal that biopharmaceutical employment is expected to increase by 239.7 percent from 520 to 1,780 between 2004 and 2014.

It is anticipated that an additional 3,380 jobs will be generated by the industry’s indirect and induced impacts in 2014.

New HampshireBiopharmaceutical employment in New Hampshire is projected to grow faster than the national average over the next 10 years, anticipated to experience a 101.2 percent increase in job growth. Moreover, the state’s biopharmaceutical industry is projected to account for 0.37 percent of the state’s total nonfarm employment in 2014.

Given this rapid employment growth of the biopharmaceutical industry, the analysis estimates that the state’s real biopharmaceutical industry output is expected to increase from $107.4 million in 2004 to $519.2 million in 2014.

New JerseyProjections for New Jersey’s biopharmaceutical industry indicate that this industry will continue to be an important employment generator for the state’s economy adding 3,760 jobs by 2014. The industry’s direct impact will create 284,310 additional jobs throughout New Jersey’s economy (total impact) in 2014.

The projections further indicate that total earnings generated from the state’s biopharmaceutical industry are expected to increase from $5.6 billion in 2004 to $10.0 billion in 2014. In 2014, the anticipated earnings will constitute 3.27 percent of the state’s total earnings up from 2.88 percent in 2004. When accounting for the industry’s multiplier impacts, the industry’s total impact will result in $32.9 billion in total earnings in 2014.

Biopharmaceutical real industry output is expected to increase from $10.8 billion in 2004 to $18.3 billion in 2014. The state’s biopharmaceutical industry is anticipated to produce an additional $21.6 billion in real output, reaching $39.8 billion in 2014 (total impact).


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New MexicoAs of 2003, New Mexico had a relatively low employment base in the biopharmaceutical industry. The biopharmaceutical industry there will account for 1,140 jobs in 2014, reflecting that it is anticipated to grow more slowly than the national average (23.3 percent in New Mexico vs. 29.6 percent nationally) over the 2004-2014 period. The industry is also projected to produce $57.6 million in total earnings in 2014, an increase of 45.5 percent over the 2004-2014 period.

New YorkOver the 2004-2014 period, New York’s biopharmaceutical employment is projected to increase by 23.5 percent or 5,990 jobs – from 36,940 in 2004 to 45,630 in 2014. The industry’s share of the total labor force will also increase from 0.44 percent in 2004 to 0.49 percent in 2014. An additional 81,480 jobs are expected to be created in other industries as a result of the industry’s indirect and induced impacts.

In terms of earnings, the additional impacts are projected to contribute $5.0 billion to the biopharmaceutical industry’s direct earnings in 2014.

Similarly, the state’s biopharmaceutical industry is projected to generate $8.7 billion in real output in 2014, a 79.9 percent increase from 2004 to 2014. The biopharmaceutical industry will produce an additional $7.6 billion in real output (indirect and induced impact) in 2014.

North CarolinaEmployment in North Carolina’s biopharmaceutical industry is anticipated to grow at nearly the same pace as the national average. Industry employment is projected to increase from 24,790 in 2004 to 32,040 in 2014. When the full extent of multiplicative dynamics is taken into consideration, North Carolina’s biopharmaceutical industry will account for a total of 160,540 jobs in 2014.

With regard to earnings, a total of $2.3 billion will be generated by the North Carolina industry directly. Considering the industry’s ripple effects, North Carolina’s biopharmaceutical industry will account for $6.5 billion in 2014.

In addition, the state’s biopharmaceutical industry is projected to contribute $7.8 billion in direct real output in 2014. The forecast estimates that North Carolina’s biopharmaceutical industry will account for $16.3 billion in total real output (total impact).

North DakotaDespite the relatively small biopharmaceutical employment base, total employment of the state’s biopharmaceutical industry is projected to increase by 110.0 percent over the 2004-2014 period. With respect to real output, the state’s biopharmaceutical industry is expected to generate $500,000 in real output in 2014.


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OhioFrom a total of 4,642 biopharmaceutical jobs in 2003, the state’s biopharmaceutical industry is expected to increase to 5,420 jobs in 2014, reflecting slower growth than the national average over the 2004-2014 period. The biopharmaceutical industry’s share of total nonfarm employment – while remaining under 1.0 percent – is expected to increase by 4.0 percent over the 2004-2014 period. The biopharmaceutical industry is anticipated to create 16,310 additional jobs (indirect and induced impact), amounting to a total of 21,730 jobs in the state in 2014.

In terms of earnings, the state’s biopharmaceutical industry is expected to contribute $353.1 million in 2014, a growth rate of 40.7 percent from 2004 to 2014.

Real output directly attributable to the state’s biopharmaceutical industry is projected to increase by 3.7 percent, from $406.9 million in 2004 to $422 million in 2014. In contrast, the real output forecast for the U.S. as a whole is projected to increase by 85.6 percent over the same time period.

OklahomaThe biopharmaceutical industry in Oklahoma is projected to provide 450 jobs in 2014. Although the industry does not yet play an important role in the state’s economy, the industry’s share of total nonfarm employment is anticipated to reach 0.03 percent in 2014. Its total impact will result in 2,380 jobs in 2014.

OregonThe 10-year employment projection for Oregon’s biopharmaceutical industry indicates that it will account for 1,360 jobs in 2014.

Earnings directly attributable to the state’s biopharmaceutical industry will amount to $48.5 million in 2014, reflecting a 6.3 percent increase from 2004.

With respect to real output, the state’s biopharmaceutical industry is expected to generate $87.4 million in real output in 2014, a 9.6 percent increase over the 2004-2014 period.

PennsylvaniaDirect employment in the biopharmaceutical industry is expected to grow by 34.4 percent over the next decade from 35,950 jobs to 48,330 jobs. The industry’s ripple effects will create 286,800 jobs (total) in 2014.

A total of $5.8 billion in earnings are projected to be directly generated by Pennsylvania’s biopharmaceutical industry in 2014. These direct earnings, coupled with the indirect and induced impacts of $12.0 billion will generate total earnings in Pennsylvania of $17.7 billion in 2014.

With regard to real industry output, the state’s biopharmaceutical industry is projected to contribute $12.2 billion to the state economy in 2014. This 57.9 percent increase over the next decade is smaller


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than the anticipated 85.6 percent increase for the nation as a whole.

Rhode IslandThe number of jobs in Rhode Island’s biopharmaceutical industry is expected to grow by 208.7 percent over the 10-year period (2004-2014), much faster than the nation as a whole (29.6 percent). The industry will directly employ 6,670 employees in 2014 generating 13,730 jobs through indirect and induced impacts, resulting in 20,390 jobs total in 2014.

With respect to earnings, the state’s biopharmaceutical industry is expected to generate a total of $410.3 million in 2014, of which $204.3 million will be produced as a result of indirect and induced impacts.

By 2014, real output with respect to biopharmaceuticals is expected to reach $961.6 million due to a substantial growth rate of 399.8 percent over the 2004-2014 decade.

South CarolinaThe state’s biopharmaceutical workforce is projected to reach a total of 5,110 employees in 2014. Of these, 1,600 employees will be employed directly by the state’s biopharmaceutical industry and an additional 3,510 employees will be employed throughout the state as a result of indirect and induced impacts.

Earnings generated by South Carolina’s biopharmaceutical industry are expected to increase by 36.6 percent, or $35.6 million, over the forecasting period, reaching a total of $132.7 million in 2014.

With respect to real output, the state’s biopharmaceutical industry is projected to contribute $174.0 million to the state economy in 2014.

South DakotaIn South Dakota, the relatively small employment base of 80 employees in 2004 in the biopharmaceutical industry is expected to grow by 27.5 percent over the forecast decade. Earnings directly attributable to the state’s biopharmaceutical industry will account for $1.3 million in 2014.

Despite relatively slow growth in the biopharmaceutical industry’s real output relative to the U.S. – 25.8 percent vs. 85.6 percent – over the forecasting period, the industry is projected to generate $2.9 million in real output in 2014.

TennesseeTennessee’s biopharmaceutical labor force is expected to reach 2,680 workers in 2014. An additional 6,890 jobs will stem from the indirect and induced impacts that the state’s biopharmaceutical industry will produce in the rest of the economy.


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In terms of earnings, the state’s biopharmaceutical industry is expected to generate $245.7 million in 2014, an increase of 19.2 percent over the projected time period.

In addition, the state’s biopharmaceutical industry is projected to account for 0.37 percent of the state’s total real output in 2014, reaching $956.7 million in 2014.

TexasThe state’s supply of workers in the biopharmaceutical industry is projected to increase by 3,010 employees over the 2004-2014 period, from 12,790 to 15,800. This represents an increase of 23.5 percent, less than the anticipated 29.6 percent increase for the nation as a whole. The biopharmaceutical industry is projected to generate a total of 59,380 jobs in 2014 as a result of the industry’s ripple effects.

Earnings directly generated by the state’s biopharmaceutical industry will account for $1.3 billion in 2014, while real output with respect to the state’s biopharmaceutical industry is anticipated to contribute $3.1 billion to the state economy. The industry’s ripple effects throughout the state economy will be responsible for contributing a total of $6.2 billion in real output to the state in 2014.

UtahUtah portrays considerable economic potential in the biopharmaceutical industry according to the 10-year projections (2004-2014). The state’s biopharmaceutical employment is expected to grow by 50.5 percent, faster than the national average, employing 8,370 people by 2014. Its state employment share is predicted to increase from 0.51 percent in 2004 to 0.66 percent in 2014. The industry’s ripple effects through the state economy will be responsible for contributing a total of 35,130 jobs to the state in 2014.

In addition, Utah’s real industry output is anticipated to grow 161.5 percent over the next 10 years, in comparison to the national average of 85.6 percent over the 2004-2014 time period.

VermontAlthough the biopharmaceutical industry is not an economic engine of the state, its projected growth rate in next 10 years is outstanding as compared to the nation as a whole. The projections of the state’s biopharmaceutical industry show that the industry’s employment is expected to increase by 223.9 percent, from 110 to 350 employees, by 2014. Vermont’s biopharmaceutical output is also predicted to grow rapidly in the next decade.

The industry’s real output is projected to grow by 280.5 percent from 2004 to 2014, generating $23.7 million in real GSP. The biopharmaceutical industry is projected to contribute $37.2 million in total real output in 2014, when accounting for the industry’s total impacts.


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VirginiaOver the 2004-2014 period, the state’s biopharmaceutical employment is projected to grow by 29.2 percent, or by 1,610 jobs from 5,510 in 2004 to 7,120 in 2014. The industry’s share of the total nonfarm employment in the state will also grow, from 0.15 percent in 2004 to 0.17 percent in 2014. An additional 19,280 jobs will be created through the biopharmaceutical industry’s indirect and induced impacts in 2014.

Real industry output is expected to grow by 14.3 percent during the forecast period, producing $693.1 million by 2014. The industry’s ripple effects will contribute another $630.8 million in real output from the industry’s indirect and induced impacts in 2004.

Total earnings in Virginia’s biopharmaceutical industry will grow by 27.2 percent in the next 10 years, generating $327.3 million in biopharmaceutical earnings and $442.4 million in additional earnings through its indirect and induced impacts.

WashingtonWashington’s biopharmaceutical employment is projected to increase from 8,820 in 2004 to 12,020 in 2014, representing an increase of 36.3 percent. Biopharmaceuticals’ share of total nonfarm employment is predicted to increase from 0.33 percent to 0.37 percent during that period. The industry’s ripple effects throughout the state economy will be responsible for contributing a total of 39,880 jobs to the state in 2014.

The state’s real biopharmaceutical output is projected to increase about three times faster than the national average over the next decade. In 2014, the industry is projected to produce $3.5 billion in real output, accounting for 1.1 percent of the state’s total real output. Biopharmaceuticals will account for an additional $3.1 billion in real output generation (indirect and induced impacts).

In terms of earnings, the indirect and induced impacts are projected to contribute $1.5 billion in 2014, for a total of $2.8 billion when accounting for the industry’s ripple effects on the state’s economy.

West VirginiaBiopharmaceutical employment in the state is expected to grow by 51.5 percent, rising from 1,960 to 2,970 jobs in the next decade. The industry will account for 0.37 percent of the state’s nonfarm total employment and generate 6,250 additional jobs (indirect and induced impacts) in the state economy.

Biopharmaceutical output is projected to grow much faster than its employment growth in the 10-year projection. Projections show the state’s real industry output escalating by 216.8 percent during that time, two-and-a-half times faster than the national average for the period. In 2014, biopharmaceuticals will produce $1.1 billion in real output, 2.1 percent of the state’s total nonfarm real output.


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WisconsinWisconsin’s biopharmaceutical industry projection shows that the state will increase its industry employment size from 4,230 to 5,710 between 2004 and 2014. Its state employment share will also grow from 0.15 percent to 0.18 percent during that period. The biopharmaceutical industry’s ripple effects will generate 11,700 additional jobs in the state in 2014.

Real biopharmaceutical output is projected to grow by 102.1 percent in the next 10 years, reaching $947.0 million in 2014. The industry will be responsible for $1.7 billion in real output (total impact) in 2014. Total biopharmaceuticals earnings will increase by 94.2 percent, from $189.4 million to $367.9 million over the forecast period.

WyomingThe state’s biopharmaceutical industry is predicted to expand with respect to employment, real output and earnings over the next decade (2004-2014). Employment, real output and earnings are anticipated to grow by 71.0, 14.5 and 89.8 percent, respectively. As a result, in 2014, the biopharmaceutical industry in the state will be responsible for 220 jobs, $27.2 million in real output, and $13.8 million in earnings when taking the industry’s total impact into account.


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2004 2009 2014State (Thous.) (Thous.) (Thous.) (2004-2009) (2009-2014) (2004-2014)Alabama 1.484 2.217 3.623 49.4% 63.4% 144.1%Alaska 0.090 0.134 0.198 48.9% 47.8% 120.0%Arizona 1.124 0.980 0.925 -12.8% -5.6% -17.7%Arkansas 0.354 0.360 0.377 1.7% 4.7% 6.5%California 71.273 84.115 99.607 18.0% 18.4% 39.8%Colorado 5.168 5.788 6.387 12.0% 10.3% 23.6%Connecticut 10.326 12.610 15.011 22.1% 19.0% 45.4%Delaware 1.937 1.619 1.867 -16.4% 15.3% -3.6%District of Columbia 2.853 3.215 3.567 12.7% 10.9% 25.0%Florida 6.800 8.799 11.301 29.4% 28.4% 66.2%Georgia 3.964 4.082 4.142 3.0% 1.5% 4.5%Hawaii 0.329 0.415 0.517 26.1% 24.6% 57.1%Idaho 0.019 0.017 0.017 -10.5% 0.0% -10.5%Illinois 21.993 23.119 24.220 5.1% 4.8% 10.1%Indiana 19.591 21.435 23.587 9.4% 10.0% 20.4%Iowa 2.589 2.872 3.175 10.9% 10.6% 22.6%Kansas 1.365 1.169 0.995 -14.4% -14.9% -27.1%Kentucky 2.388 2.901 3.273 21.5% 12.8% 37.1%Louisiana 0.609 0.510 0.475 -16.3% -6.9% -22.0%Maine 1.360 1.290 1.317 -5.1% 2.1% -3.2%Maryland 11.109 14.125 18.039 27.1% 27.7% 62.4%Massachusetts 22.682 29.160 37.257 28.6% 27.8% 64.3%Michigan 12.016 11.274 10.349 -6.2% -8.2% -13.9%Minnesota 2.606 2.487 2.391 -4.6% -3.9% -8.3%Mississippi 1.153 1.040 0.946 -9.8% -9.0% -18.0%Missouri 5.961 6.711 7.498 12.6% 11.7% 25.8%Montana 0.554 0.656 0.793 18.4% 20.9% 43.1%Nebraska 1.887 2.095 2.308 11.0% 10.2% 22.3%Nevada 0.524 1.228 1.780 134.4% 45.0% 239.7%New Hampshire 1.314 2.082 2.644 58.4% 27.0% 101.2%New Jersey 46.044 47.511 49.802 3.2% 4.8% 8.2%New Mexico 0.927 1.031 1.143 11.2% 10.9% 23.3%New York 36.935 41.204 45.631 11.6% 10.7% 23.5%North Carolina 24.788 28.450 32.038 14.8% 12.6% 29.2%North Dakota 0.020 0.029 0.042 45.0% 44.8% 110.0%Ohio 4.667 5.027 5.416 7.7% 7.7% 16.0%Oklahoma 0.526 0.483 0.450 -8.2% -6.8% -14.4%Oregon 1.426 1.394 1.360 -2.2% -2.4% -4.6%Pennsylvania 35.954 41.154 48.330 14.5% 17.4% 34.4%Rhode Island 2.160 4.325 6.667 100.2% 54.2% 208.7%South Carolina 2.197 1.926 1.604 -12.3% -16.7% -27.0%South Dakota 0.080 0.090 0.102 12.5% 13.3% 27.5%Tennessee 3.596 3.091 2.682 -14.0% -13.2% -25.4%Texas 12.791 14.315 15.800 11.9% 10.4% 23.5%Utah 5.557 7.111 8.366 28.0% 17.6% 50.5%Vermont 0.109 0.193 0.353 77.1% 82.9% 223.9%Virginia 5.509 6.301 7.116 14.4% 12.9% 29.2%Washington 8.815 10.283 12.016 16.7% 16.9% 36.3%West Virginia 1.961 2.419 2.971 23.4% 22.8% 51.5%Wisconsin 4.228 4.910 5.714 16.1% 16.4% 35.1%Wyoming 0.062 0.074 0.106 19.4% 43.2% 71.0%United States* 413.774 469.826 536.295 13.5% 14.1% 29.6%*United States figures are based on the sum of all state and D.C. totalsSources: Milken Institute, Economy.com, BLS.

Percent Growth

Biopharmaceutical Employment ForecastBy State


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State 2004 2009 2014 (2004-2009) (2009-2014) (2004-2014)Alabama 0.08% 0.11% 0.17% 39.9% 54.0% 115.5%Alaska 0.03% 0.04% 0.05% 36.4% 36.0% 85.4%Arizona 0.05% 0.04% 0.03% -24.3% -16.5% -36.8%Arkansas 0.03% 0.03% 0.03% -6.2% -2.5% -8.6%California 0.49% 0.53% 0.58% 8.4% 9.8% 19.0%Colorado 0.24% 0.24% 0.24% 0.5% 0.7% 1.2%Connecticut 0.63% 0.72% 0.81% 14.6% 12.8% 29.3%Delaware 0.46% 0.35% 0.37% -24.5% 5.3% -20.5%District of Columbia 0.42% 0.45% 0.48% 6.8% 6.0% 13.3%Florida 0.09% 0.10% 0.12% 14.0% 15.1% 31.3%Georgia 0.10% 0.09% 0.09% -8.4% -8.0% -15.8%Hawaii 0.06% 0.07% 0.08% 17.7% 17.5% 38.3%Idaho 0.00% 0.00% 0.00% -17.7% -7.4% -23.8%Illinois 0.38% 0.37% 0.37% -0.9% -0.4% -1.3%Indiana 0.67% 0.69% 0.72% 2.8% 4.3% 7.2%Iowa 0.18% 0.19% 0.19% 4.3% 4.3% 8.8%Kansas 0.10% 0.08% 0.07% -19.6% -19.5% -35.3%Kentucky 0.13% 0.15% 0.16% 12.9% 5.8% 19.5%Louisiana 0.03% 0.03% 0.02% -20.8% -11.7% -30.1%Maine 0.22% 0.20% 0.19% -11.5% -4.1% -15.1%Maryland 0.44% 0.52% 0.61% 16.6% 18.7% 38.5%Massachusetts 0.71% 0.87% 1.05% 21.2% 21.8% 47.6%Michigan 0.27% 0.24% 0.21% -11.8% -12.8% -23.1%Minnesota 0.10% 0.09% 0.08% -9.9% -8.5% -17.6%Mississippi 0.10% 0.08% 0.07% -16.9% -15.4% -29.7%Missouri 0.22% 0.23% 0.25% 5.5% 5.7% 11.5%Montana 0.14% 0.15% 0.17% 10.1% 13.4% 24.8%Nebraska 0.21% 0.22% 0.22% 3.6% 3.8% 7.5%Nevada 0.05% 0.09% 0.12% 101.6% 27.4% 156.7%New Hampshire 0.21% 0.31% 0.37% 46.1% 18.3% 72.9%New Jersey 1.14% 1.10% 1.09% -3.7% -1.0% -4.7%New Mexico 0.12% 0.12% 0.12% 0.5% 1.5% 2.0%New York 0.44% 0.46% 0.49% 5.7% 5.8% 11.8%North Carolina 0.65% 0.67% 0.69% 3.7% 3.1% 6.9%North Dakota 0.01% 0.01% 0.01% 35.9% 36.1% 85.0%Ohio 0.09% 0.09% 0.09% 1.5% 2.5% 4.0%Oklahoma 0.04% 0.03% 0.03% -14.1% -12.2% -24.6%Oregon 0.09% 0.08% 0.07% -9.7% -8.9% -17.7%Pennsylvania 0.64% 0.70% 0.79% 9.1% 12.4% 22.6%Rhode Island 0.44% 0.83% 1.21% 87.8% 46.2% 174.5%South Carolina 0.12% 0.10% 0.07% -19.9% -23.3% -38.6%South Dakota 0.02% 0.02% 0.02% 4.6% 6.0% 10.9%Tennessee 0.13% 0.10% 0.08% -21.0% -19.2% -36.1%Texas 0.14% 0.14% 0.14% 0.6% 0.5% 1.2%Utah 0.51% 0.60% 0.66% 18.0% 9.3% 29.0%Vermont 0.04% 0.06% 0.11% 67.3% 74.1% 191.2%Virginia 0.15% 0.16% 0.17% 3.8% 4.1% 8.1%Washington 0.33% 0.34% 0.37% 5.1% 6.2% 11.7%West Virginia 0.27% 0.32% 0.37% 17.1% 17.1% 37.1%Wisconsin 0.15% 0.16% 0.18% 9.0% 10.3% 20.2%Wyoming 0.02% 0.03% 0.04% 15.2% 37.8% 58.8%United States* 0.32% 0.33% 0.35% 4.7% 6.3% 11.4%*United States figures are based on the sum of all state and D.C. totalsSources: Milken Institute, Economy.com, BLS.

Percent Growth

Biopharmaceutical Share of Total Employment ForecastBy State


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State


Multiplier

Total Impact

(Thous.)

Direct Impact

(Thous.)

Indirect + Induced(Thous.)

Induced Impact

(Thous.)

Indirect Impact

(Thous.)Induced Share

Indirect Share



Biopharmaceutical Employment ForecastMultiplier Impacts, 2014



177

2004 2009 2014State (US$ 96, Mil.) (US$ 96, Mil.) (US$ 96, Mil.) (2004-2009) (2009-2014) (2004-2014)Alabama 98.6 148.0 234.4 50.1% 58.4% 137.7%Alaska 3.9 4.9 6.0 26.4% 21.8% 53.9%Arizona 142.1 114.5 88.3 -19.5% -22.8% -37.8%Arkansas 13.0 10.0 7.8 -22.6% -22.9% -40.3%California 11,216.0 17,520.2 22,886.7 56.2% 30.6% 104.1%Colorado 501.4 637.4 788.3 27.1% 23.7% 57.2%Connecticut 2,012.0 3,251.7 4,947.2 61.6% 52.1% 145.9%Delaware 201.2 183.0 236.4 -9.0% 29.1% 17.5%District of Columbia 182.8 219.5 254.5 20.1% 15.9% 39.2%Florida 972.7 1,608.8 2,584.2 65.4% 60.6% 165.7%Georgia 684.4 799.6 902.0 16.8% 12.8% 31.8%Hawaii 27.5 36.8 45.8 33.5% 24.6% 66.3%Idaho 1.1 0.8 0.7 -26.0% -18.1% -39.4%Illinois 3,367.5 3,873.1 4,322.1 15.0% 11.6% 28.3%Indiana 6,359.5 9,472.5 11,820.9 49.0% 24.8% 85.9%Iowa 325.9 293.2 251.4 -10.0% -14.2% -22.9%Kansas 179.6 214.6 244.3 19.5% 13.9% 36.0%Kentucky 194.4 246.7 282.1 26.9% 14.3% 45.1%Louisiana 50.9 29.7 18.7 -41.8% -37.1% -63.3%Maine 108.8 110.6 115.9 1.7% 4.8% 6.5%Maryland 1,625.0 2,773.3 4,562.4 70.7% 64.5% 180.8%Massachusetts 2,640.0 4,508.8 7,597.0 70.8% 68.5% 187.8%Michigan 1,945.2 2,079.5 2,092.6 6.9% 0.6% 7.6%Minnesota 292.0 339.5 383.1 16.3% 12.8% 31.2%Mississippi 169.5 166.9 158.5 -1.5% -5.1% -6.5%Missouri 1,061.4 1,574.8 2,238.4 48.4% 42.1% 110.9%Montana 20.6 19.7 18.4 -4.5% -6.4% -10.6%Nebraska 337.4 410.5 483.1 21.7% 17.7% 43.2%Nevada 41.1 111.1 177.8 170.0% 60.1% 332.3%New Hampshire 107.4 254.9 519.2 137.3% 103.7% 383.4%New Jersey 10,789.5 14,297.3 18,256.8 32.5% 27.7% 69.2%New Mexico 49.8 61.8 79.3 24.2% 28.3% 59.3%New York 4,820.7 6,746.6 8,672.3 39.9% 28.5% 79.9%North Carolina 4,743.0 6,203.8 7,824.8 30.8% 26.1% 65.0%North Dakota 0.5 0.5 0.5 -0.8% -4.5% -5.2%Ohio 406.9 423.4 422.0 4.1% -0.3% 3.7%Oklahoma 116.4 107.7 95.9 -7.5% -11.0% -17.6%Oregon 79.7 84.1 87.4 5.5% 3.9% 9.6%Pennsylvania 7,738.2 9,694.9 12,216.5 25.3% 26.0% 57.9%Rhode Island 192.4 521.5 961.6 171.1% 84.4% 399.8%South Carolina 216.4 201.4 174.0 -7.0% -13.6% -19.6%South Dakota 2.3 2.6 2.9 13.1% 11.3% 25.8%Tennessee 607.8 763.9 956.7 25.7% 25.2% 57.4%Texas 1,696.7 2,362.9 3,114.0 39.3% 31.8% 83.5%Utah 375.2 624.1 981.4 66.3% 57.3% 161.5%Vermont 6.2 12.0 23.7 92.5% 97.7% 280.5%Virginia 606.5 659.4 693.1 8.7% 5.1% 14.3%Washington 994.9 1,868.5 3,451.3 87.8% 84.7% 246.9%West Virginia 344.3 613.3 1,091.0 78.1% 77.9% 216.8%Wisconsin 468.5 677.0 947.0 44.5% 39.9% 102.1%Wyoming 16.9 17.9 19.3 6.4% 7.6% 14.5%United States* 69,156.1 96,959.2 128,339.3 40.2% 32.4% 85.6%*United States figures are based on the sum of all state and D.C. totalsSources: Milken Institute, Economy.com, BLS.

Percent Growth

Biopharmaceutical Real Output ForecastBy State


178

State 2004 2009 2014 (2004-2009) (2009-2014) (2004-2014)Alabama 0.08% 0.10% 0.14% 29.0% 38.2% 78.2%Alaska 0.01% 0.01% 0.02% 4.6% 3.0% 7.7%Arizona 0.08% 0.05% 0.03% -36.5% -36.7% -59.8%Arkansas 0.02% 0.01% 0.01% -32.9% -32.0% -54.4%California 0.81% 1.04% 1.14% 27.7% 9.7% 40.0%Colorado 0.30% 0.31% 0.32% 3.2% 3.8% 7.2%Connecticut 1.19% 1.60% 2.06% 33.8% 29.1% 72.8%Delaware 0.49% 0.37% 0.40% -25.7% 8.6% -19.4%District of Columbia 0.29% 0.29% 0.28% 0.3% -1.4% -1.1%Florida 0.19% 0.26% 0.35% 34.3% 34.6% 80.7%Georgia 0.23% 0.22% 0.21% -6.1% -6.0% -11.7%Hawaii 0.06% 0.07% 0.08% 12.8% 7.7% 21.5%Idaho 0.00% 0.00% 0.00% -37.0% -29.1% -55.4%Illinois 0.70% 0.69% 0.66% -2.6% -3.5% -6.0%Indiana 3.28% 4.19% 4.57% 27.7% 9.1% 39.3%Iowa 0.35% 0.27% 0.20% -22.0% -24.7% -41.3%Kansas 0.21% 0.22% 0.22% 3.2% -0.2% 2.9%Kentucky 0.16% 0.18% 0.18% 8.3% -0.5% 7.8%Louisiana 0.04% 0.02% 0.01% -49.3% -44.6% -71.9%Maine 0.30% 0.26% 0.24% -11.9% -7.8% -18.8%Maryland 0.82% 1.16% 1.62% 41.4% 40.0% 97.9%Massachusetts 0.94% 1.34% 1.95% 43.3% 44.7% 107.3%Michigan 0.62% 0.56% 0.49% -9.0% -12.7% -20.5%Minnesota 0.15% 0.15% 0.15% -0.7% -2.0% -2.6%Mississippi 0.25% 0.21% 0.18% -16.0% -17.5% -30.7%Missouri 0.59% 0.75% 0.93% 27.7% 24.5% 59.0%Montana 0.09% 0.08% 0.06% -17.1% -17.6% -31.7%Nebraska 0.59% 0.62% 0.65% 5.2% 3.5% 8.9%Nevada 0.05% 0.11% 0.14% 112.0% 30.8% 177.3%New Hampshire 0.22% 0.43% 0.75% 98.2% 74.1% 245.1%New Jersey 2.89% 3.17% 3.44% 9.6% 8.6% 19.0%New Mexico 0.08% 0.08% 0.09% 3.6% 9.7% 13.6%New York 0.57% 0.68% 0.75% 17.4% 11.0% 30.4%North Carolina 1.79% 1.94% 2.08% 8.3% 7.2% 16.1%North Dakota 0.00% 0.00% 0.00% -13.2% -15.6% -26.8%Ohio 0.11% 0.10% 0.09% -10.5% -12.6% -21.8%Oklahoma 0.13% 0.10% 0.08% -19.8% -21.7% -37.2%Oregon 0.06% 0.05% 0.05% -11.3% -10.5% -20.6%Pennsylvania 1.91% 2.06% 2.28% 8.2% 10.6% 19.7%Rhode Island 0.52% 1.21% 1.95% 132.1% 61.3% 274.3%South Carolina 0.18% 0.14% 0.11% -22.2% -26.2% -42.6%South Dakota 0.01% 0.01% 0.01% -2.0% -2.1% -4.1%Tennessee 0.32% 0.34% 0.37% 6.5% 8.5% 15.6%Texas 0.23% 0.26% 0.28% 13.3% 10.6% 25.3%Utah 0.55% 0.77% 1.04% 40.3% 35.2% 89.8%Vermont 0.03% 0.05% 0.10% 66.8% 74.1% 190.4%Virginia 0.23% 0.20% 0.18% -10.5% -10.9% -20.2%Washington 0.45% 0.69% 1.06% 52.6% 53.9% 134.9%West Virginia 0.83% 1.30% 2.07% 57.5% 58.9% 150.4%Wisconsin 0.26% 0.32% 0.40% 24.2% 22.4% 52.1%Wyoming 0.08% 0.08% 0.07% -6.2% -4.3% -10.3%United States* 0.68% 0.80% 0.90% 16.9% 13.1% 32.3%*United States figures are based on the sum of all state and D.C. totalsSources: Milken Institute, Economy.com, BLS.

Percent Growth

Biopharmaceutical Share of Total Real Output ForecastBy State


179

State

Final-Demand Output

Multiplier

Total Impact

(US$ 96, Mil.)

DirectImpact

(US$ 96, Mil.)

Indirect + Induced

(US$ 96, Mil.)

Induced Impact

(US$ 96, Mil.)

Indirect Impact

(US$ 96, Mil.)Induced Share

Indirect Share



Biopharmaceutical Real Output ForecastMultiplier Impacts, 2014



180

2004 2009 2014State (US$ Mil.) (US$ Mil.) (US$ Mil.) (2004-2009) (2009-2014) (2004-2014)Alabama 66.4 82.6 105.7 24.4% 27.9% 59.1%Alaska 3.5 5.1 8.0 47.6% 56.6% 131.1%Arizona 62.8 64.2 66.0 2.2% 2.8% 5.2%Arkansas 9.1 9.2 9.8 0.7% 6.4% 7.2%California 5,698.6 8,121.6 11,058.2 42.5% 36.2% 94.0%Colorado 222.5 261.3 312.9 17.4% 19.8% 40.6%Connecticut 1,279.2 1,865.5 2,725.1 45.8% 46.1% 113.0%Delaware 89.6 108.9 131.8 21.5% 21.1% 47.1%District of Columbia 189.2 240.0 332.3 26.9% 38.4% 75.6%Florida 390.7 564.8 843.7 44.5% 49.4% 115.9%Georgia 278.7 368.4 490.9 32.2% 33.3% 76.2%Hawaii 15.6 20.5 26.5 30.9% 29.4% 69.5%Idaho 0.8 0.8 0.9 -1.7% 8.0% 6.2%Illinois 1,764.3 2,188.3 2,575.0 24.0% 17.7% 45.9%Indiana 1,758.4 2,290.4 2,875.8 30.3% 25.6% 63.5%Iowa 91.3 114.8 146.6 25.8% 27.7% 60.7%Kansas 69.6 78.1 89.7 12.3% 14.9% 29.0%Kentucky 69.1 86.4 104.3 25.0% 20.7% 50.9%Louisiana 28.0 25.5 25.2 -8.9% -1.3% -10.1%Maine 69.9 79.9 91.5 14.3% 14.5% 30.9%Maryland 731.4 1,147.4 1,724.2 56.9% 50.3% 135.7%Massachusetts 1,710.7 2,613.5 4,187.5 52.8% 60.2% 144.8%Michigan 838.7 925.5 1,047.9 10.4% 13.2% 25.0%Minnesota 174.1 187.9 199.3 7.9% 6.1% 14.5%Mississippi 59.1 60.2 63.0 1.8% 4.7% 6.6%Missouri 429.3 494.2 582.2 15.1% 17.8% 35.6%Montana 15.3 16.6 19.3 8.6% 15.9% 25.9%Nebraska 82.1 95.0 114.6 15.7% 20.6% 39.6%Nevada 26.0 32.4 36.3 24.7% 11.8% 39.4%New Hampshire 62.6 91.0 128.0 45.5% 40.6% 104.5%New Jersey 5,634.0 7,519.9 10,030.2 33.5% 33.4% 78.0%New Mexico 39.6 46.7 57.6 18.0% 23.4% 45.5%New York 2,091.6 2,579.8 3,353.5 23.3% 30.0% 60.3%North Carolina 1,347.6 1,774.1 2,265.9 31.7% 27.7% 68.1%North Dakota 0.4 0.4 0.5 8.4% 13.8% 23.3%Ohio 250.9 293.8 353.1 17.1% 20.2% 40.7%Oklahoma 29.9 38.1 49.1 27.5% 28.8% 64.2%Oregon 45.6 47.5 48.5 4.1% 2.1% 6.3%Pennsylvania 3,213.3 4,216.8 5,756.3 31.2% 36.5% 79.1%Rhode Island 73.5 123.5 206.0 67.9% 66.9% 180.3%South Carolina 97.1 117.0 132.7 20.5% 13.4% 36.6%South Dakota 1.2 1.2 1.3 3.1% 8.8% 12.2%Tennessee 206.2 222.9 245.7 8.1% 10.2% 19.2%Texas 772.7 987.1 1,289.3 27.7% 30.6% 66.9%Utah 202.8 266.4 392.3 31.4% 47.2% 93.4%Vermont 4.0 6.1 9.4 50.7% 54.6% 133.0%Virginia 257.2 293.8 327.3 14.2% 11.4% 27.2%Washington 531.9 778.8 1,228.3 46.4% 57.7% 130.9%West Virginia 114.4 182.9 305.4 59.9% 66.9% 166.9%Wisconsin 189.4 257.8 367.9 36.1% 42.7% 94.2%Wyoming 4.4 5.6 8.3 27.9% 48.3% 89.8%United States* 31,394.6 42,000.5 56,551.0 33.8% 34.6% 80.1%*United States figures are based on the sum of all state and D.C. totalsSources: Milken Institute, Economy.com, BLS.

Percent Growth

Biopharmaceutical Earnings ForecastBy State


181

State 2004 2009 2014 (2004-2009) (2009-2014) (2004-2014)Alabama 0.11% 0.10% 0.11% -3.6% 4.1% 0.4%Alaska 0.03% 0.03% 0.04% 11.9% 25.4% 40.4%Arizona 0.07% 0.05% 0.04% -26.7% -20.2% -41.5%Arkansas 0.03% 0.02% 0.02% -21.4% -12.9% -31.6%California 0.84% 0.92% 1.01% 9.3% 10.0% 20.3%Colorado 0.25% 0.22% 0.21% -12.9% -5.4% -17.5%Connecticut 1.51% 1.72% 2.05% 13.6% 19.3% 35.5%Delaware 0.51% 0.48% 0.47% -7.1% -2.2% -9.1%District of Columbia 0.48% 0.50% 0.59% 4.3% 16.9% 21.8%Florida 0.15% 0.16% 0.19% 6.9% 17.9% 26.1%Georgia 0.18% 0.17% 0.18% -3.9% 4.2% 0.1%Hawaii 0.08% 0.08% 0.08% 1.2% 5.4% 6.7%Idaho 0.00% 0.00% 0.00% -24.4% -12.4% -33.8%Illinois 0.71% 0.70% 0.69% -0.8% -2.1% -2.9%Indiana 1.72% 1.79% 1.86% 3.8% 4.1% 8.1%Iowa 0.20% 0.20% 0.21% 0.7% 6.2% 6.9%Kansas 0.16% 0.14% 0.13% -12.8% -6.4% -18.4%Kentucky 0.12% 0.12% 0.11% -1.7% -0.8% -2.5%Louisiana 0.05% 0.03% 0.03% -27.4% -18.1% -40.6%Maine 0.36% 0.32% 0.31% -9.5% -5.3% -14.3%Maryland 0.68% 0.82% 0.99% 20.4% 21.6% 46.5%Massachusetts 1.10% 1.34% 1.79% 21.9% 33.0% 62.1%Michigan 0.46% 0.41% 0.38% -11.9% -6.0% -17.2%Minnesota 0.16% 0.14% 0.12% -14.8% -12.6% -25.5%Mississippi 0.18% 0.14% 0.12% -20.3% -14.2% -31.6%Missouri 0.44% 0.41% 0.40% -8.1% -2.1% -10.0%Montana 0.13% 0.12% 0.11% -12.7% -3.4% -15.6%Nebraska 0.28% 0.26% 0.26% -8.6% -0.5% -9.1%Nevada 0.06% 0.05% 0.05% -11.3% -13.6% -23.4%New Hampshire 0.25% 0.28% 0.32% 11.9% 13.7% 27.2%New Jersey 2.88% 3.00% 3.27% 3.9% 9.0% 13.3%New Mexico 0.16% 0.14% 0.14% -10.4% -0.8% -11.1%New York 0.51% 0.50% 0.55% -0.7% 8.5% 7.7%North Carolina 1.01% 0.98% 0.99% -3.0% 0.7% -2.4%North Dakota 0.00% 0.00% 0.00% -13.4% -5.6% -18.3%Ohio 0.13% 0.12% 0.12% -5.1% 0.8% -4.4%Oklahoma 0.07% 0.07% 0.07% 0.5% 6.1% 6.6%Oregon 0.08% 0.06% 0.05% -19.7% -16.9% -33.2%Pennsylvania 1.47% 1.57% 1.81% 7.0% 15.1% 23.2%Rhode Island 0.41% 0.54% 0.75% 33.0% 38.2% 83.8%South Carolina 0.17% 0.15% 0.13% -10.0% -9.8% -18.8%South Dakota 0.01% 0.01% 0.01% -17.6% -9.6% -25.5%Tennessee 0.22% 0.18% 0.16% -17.1% -10.8% -26.0%Texas 0.21% 0.20% 0.20% -5.7% 3.2% -2.7%Utah 0.57% 0.57% 0.67% -1.2% 17.2% 15.8%Vermont 0.04% 0.05% 0.06% 18.6% 27.3% 50.9%Virginia 0.18% 0.16% 0.14% -13.2% -10.3% -22.2%Washington 0.45% 0.51% 0.64% 12.2% 27.1% 42.6%West Virginia 0.53% 0.69% 0.96% 29.3% 39.9% 80.9%Wisconsin 0.20% 0.21% 0.25% 7.6% 17.8% 26.7%Wyoming 0.06% 0.06% 0.07% 2.7% 24.0% 27.4%United States* 0.60% 0.62% 0.68% 3.5% 9.5% 13.4%*United States figures are based on the sum of all state and D.C. totalsSources: Milken Institute, Economy.com, BLS.

Percent Growth

Biopharmaceutical Share of Total Earnings ForecastBy State


182

State

Direct-EffectEarningsMultiplier

Total Impact

(US$ Mil.)

Direct Impact

(US$ Mil.)

Indirect + Induced(US$ Mil.)

Induced Impact

(US$ Mil.)

Indirect Impact

(US$ Mil.)Induced Share

Indirect Share



Biopharmaceutical Earnings ForecastMultiplier Impacts, 2014



183

A Brief History of the Biopharmaceutical Industry and its Leading Companies63

Foreign investment in the United States has always been an integral part of its economic development. In a sense, the colonization of the United States was itself a massive foreign investment. Although this study is concerned with contemporary issues in the biotech and pharmaceutical industries in the U.S., a brief historical review is provided for context with particular emphasis on the industry’s evolution.

The importance of this review should neither be exaggerated nor underrated, as the quality of our understanding of the current state of the biopharmaceutical industry and its related issues depends largely on our frame of reference. Multinational enterprise strategies and government policy decisions flow from a number of relevant factors. History, it is argued, is one potentially relevant factor. This is what Krugman had in mind when he stated that “if there is one single area of economics where path dependence is unmistakable, it is in economic geography—the location of production in space.”64

No past experience, however rich, and no historical research however thorough, could keep the present generation from the creative task of finding its own answers, making its own decisions and shaping its own future. The following, therefore, purports to do no more than point at some relationships that existed in the past, the consideration of which in current discussions might prove useful in setting future policy.

This section views the spatial location of multinational enterprise activity with the U.S. as process-dependent (Weber, 1929, Englander, 1926 and Ritschi, 1927). Just as the annual rings of the oak tree reveal its historical formation and growth, this section uncovers the industrial and technological development of the biopharmaceutical industry layer by layer from inherited, previous location formations..65,66,67 A number of short case studies, of pharmaceutical and biotechnology companies, are included to outline and describe some firm-level activities in the industry.68

“Health care is, in important ways, our largest industry,” (Goddeeris, 2001).69 It includes a tremendous variety of goods and services each contributing to our health-related quality and length of life. The enormous capabilities of modern medicine comprise one important reason that the health-care industry is so expansive today. Biotechnology and pharmaceutical products and services have helped shape the improved health care to which Americans are privileged to have access. Innovation, excellence and entrepreneurship characterize the biopharmaceutical industry.

BackgroundThe scientific community was international as early as the 1860s and communication of research findings was relatively quick.70 The mobility of scientists, entrepreneurs and skilled workers is seen in the number of distinguished German chemists who conducted research in Britain and skilled French workers who moved to Basel, Switzerland in the 1870s in the aftermath of the Fuchsine affair.71 British firms dominated the production of chemicals during the first half of the 19th century. Foreign direct investment had more impact on the pre-WWI American chemical industry than on any other U.S. industry.72 In no other industry were Europeans so far in advance of the Americans; in no other single industry was the foreign technological contribution so dramatic.73 America imported this talent from Europe via immigration.

A Brief History of the Biopharmaceutical Industry and its Leading CompaniesVII.

184

One of America’s first chemical companies, Pfizer, was founded in Williamsburg, a section of Brooklyn, in 1849. Pfizer expanded from operating as a small family-owned business to “a specialty chemical company to a diversified manufacturing firm to a research-based pharmaceutical company that is now the world’s largest company devoted to healthcare.”74

PfizerPfizer was founded by a pair of enterprising young cousins from Germany: Charles Pfizer and Charles Erhart. The company began with one product and two employees. In 1882, spurred by America’s westward expansion, Pfizer opened offices and a warehouse in Chicago, Illinois, its first location outside of New York.

At the start of the 20th century, Pfizer began to take on the first characteristics of a multinational enterprise, forming alliances that would eventually extend from North America around the world. In the 1940s, Pfizer made medical history when it became the first company to successfully mass-produce penicillin. This milestone set the stage for Pfizer’s transformation from a producer of chemicals to a full-fledged research-based pharmaceutical enterprise.

In 1994, Pfizer’s annual investment in R&D exceeded $1 billion. Within three years, that level of commitment to innovation grew to nearly $2.5 billion. Pfizer’s estimated R&D budget for 2004 is a massive $7.9 billion. Some 400 projects are in Pfizer’s innovation pipeline at the stage of discovery research. Another 225 projects are in the product development stage (the majority of which involve new molecule development; the remainder major product enhancements). These R&D projects are being carried out by 13,000 scientists worldwide. In 2003, the company had more than $45 billion in annual sales, a nearly $270 billion market capitalization and 122,000 employees worldwide (more than 23,000 of whom are employed in the U.S.)

Pfizer’s operational presence is felt coast-to-coast in the U.S. The company’s major prescription medicines include: Aricept (donepezil hydrochloride), the world’s most commonly prescribed medicine for Alzheimer’s disease; Viagra (sildenafil citrate), used to treat erectile dysfunction and probably the single most talked-about medicine developed in the last four decades; and Zoloft (sertraline hydrochloride), an inhibitor of a variety of mental disorders including depression, panic disorder, social anxiety disorder, obsessive-compulsive disorder and post-traumatic stress disorder.

Pfizer has a long history of not only developing medicines that benefit human health, but of actively supporting the delivery of important medicines to people most in need of pharmacological treatments.

Sources: Rodengen, Jeffrey L. 1999. The Legend of Pfizer; www.pfizer.com/main.html; www.pfizer.com/are/mn_investors.cfm; Forbes; and Fortune.

The roots of Schering-Plough can be traced back to 1851 in Berlin where Dr. Ernst Schering purchased the “Green Apothecary” and began to develop and sell a handful of pharmaceutical products for the relief of various common complaints. By 1880, his pharmaceutical specialties were introduced to the U.S. market where they were sold through its American subsidiary under the Schering and Glatz label. Its offices were on Wall Street in New York City, but later, the company established its headquarters in New Jersey.75

A Brief History of the Biopharmaceutical Industry and its Leading Companies

185

Schering-Plough Kenilworth, New Jersey-based Schering-Plough was first established in the late 18th century as the subsidiary of the German pharmaceutical and chemical company, Schering AG. First incorporated in New York in 1928, Schering Corporation moved its headquarters to New Jersey in 1935. The company adopted its current name after acquiring the consumer products manufacturer, Plough Inc., in 1971. Today Schering-Plough’s more than 30,000 employees around the world generate annual sales of $8.3 billion. In addition to 11 facilities in New Jersey, the company has a direct presence in the states of California, Delaware, Florida, Georgia, Indiana, Kansas, Louisiana, Nebraska, Nevada and Tennessee. The company’s products reach patients and caregivers in more than 125 countries.

The Schering-Plough Research Institute concentrates its pharmaceutical R&D efforts on producing medicines that treat allergic and respiratory disorders, infectious diseases and inflammation, cancer, cardiovascular disease, and central nervous system and other disorders. R&D spending in 2003 totaled $1.5 billion. Schering-Plough’s product pipeline focuses on a three-pronged approach: expanding the applications of marketed products, better linking the internal R&D process with commercial operations and making use of external innovation through licensing and collaborations. Major Schering-Plough products include the allergy medicine Clarinex (desloatadine); cholesterol-reducing Zetia (ezetimibe, a breakthrough product developed jointly with Merck); and Vytorin (ezetimibe/simvastatin), a new Merck/Schering-Plough product approved in July 2004 that represents the first medicine to inhibit production of cholesterol in the liver while blocking absorption of cholesterol in the intestine.

Sources: Schering-Plough Research Institute www.tumble.com; 2003 Annual Report; http://ccbn.mobular.net

The American Civil War, which began in 1861, quickly became one of the most devastating medical events of the 19th century. Smallpox vaccinations protected soldiers against at least one deadly disease, but there was no defense against dysentery, malaria, typhoid, yellow fever, venereal and many other diseases. Demand increased dramatically for painkillers, preservatives and disinfectants.

The Wyeth brothers’ firm, which began as a small drugstore in 1860, was also a research laboratory that transformed the way drugstores operated. Later known as Wyeth Laboratories, it became the first to “advance manufacture” frequently prescribed medicines in bulk.76

WyethHeadquartered in Madison, New Jersey, Wyeth has $15.9 billion in annual sales and a $48.7 billion market capitalization. Founded as John Wyeth and Brother in the 1860s, the company has grown from its origins as a small Philadelphia drugstore into a globally active firm whose main business activities span prescription pharmaceuticals, over-the-counter consumer health products (among the better known are Advil, Robitussin, and Chap Stick) and animal health products in the areas of pharmaceuticals and biologicals. Among Wyeth’s most successful pharmaceutical products are the antidepressant Effexor, the biopharmaceutical for rheumatoid arthritis Enbrel, and the proton pump inhibitor for the treatment of gastroesophageal reflux disesase, Protonix.

Wyeth dedicated approximately $2.1 billion to R&D in 2003, focusing particularly on pharmaceutical, vaccine and biotechnology products. It is one of the few major pharmaceutical companies that develops and manufactures from three development platforms: small molecule drugs, biopharmaceuticals and vaccines. Wyeth participates in the nonprofit alliance Partnership for Quality Medical Donations, through which it donates millions of dollars in pharmaceutical products to such programs as Project HOPE, AmeriCares and Heart to Heart International.Sources: http://www.wyeth.com/about/history.asp; http://ccbn.mobular.net/ccbn/7/444/492/; 2003 Annual Report.


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In 1876, Colonel Eli Lilly founded his company in Indianapolis, Indiana.77 Lilly was one of the first firms to establish a presence in the more westerly region of the United States. Shortly thereafter, Abbott Alkaloidal was officially incorporated in Illinois.78

Eli Lilly and Company

Lilly was one of the first companies to initiate a bona fide pharmaceutical research program. This global research-based company was founded in 1876 by Colonel Eli Lilly, a 38-year-old pharmaceutical chemist and veteran of the U.S. Civil War, in Indianapolis, Indiana.

Alliances have been among the company’s preferred ways of developing new products and technologies since the 1920s when Eli Lilly and Company joined with Fred Banting and Charles Best at the University of Toronto to make the first insulin for treating diabetes. Through its alliances, often with smaller biotechnology firms, the company is committed to becoming the biopharmaceutical industry’s premier partner.

Lilly’s more than 46,000 worldwide employees (24,000 of whom work in the U.S.) generate annual sales of some $12.6 billion. Expanding on breakthroughs in the then nascent field of biotechnology, in 1982 Lilly introduced Humulin, the first human health-care product based on recombinant DNA technology. That same decade it launched what has since become the world-renown blockbuster pharmaceutical Prozac, the first of a new class of drugs for treating clinical depression. The success of Prozac helped establish Lilly as a leader in medicines for the central nervous system and the pioneer of the field of antidepressants.

In its R&D efforts, Lilly emphasizes the development of “breakthrough products” that the company defines as “either the first in a new class of medicines or the best in an existing class.” This is not an inexpensive proposition as the average cost to discover and develop a new pharmaceutical product is $800 million, with the average elapsed time from discovery to patient administration lasting 10-15 years. Representative of Lilly’s latest product breakthroughs are Forteo, a first-in-class biotech product for osteoporosis; Strattera, the first nonstimulant medicine for children and adolescents with attention-deficit hyperactivity disorder and the first product for adults with attention-deficit disorder; and Symbyax, the first product approved for bipolar depression.

In December 2003, Business Week ranked Lilly as America’s top corporate giver based on in-kind donations as a percentage of total revenues. In May 2004, the United Way presented Lilly with a Spirit of America Summit Award citing the company as “one of the ten most generous companies worldwide.”

Sources: www.lilly.com/; https://investor.lilly.com/annuals.cfm; Milestones in Medical Research; D. Futrell, M. Slugay and C.H. Stephens. 2001. “Becoming a Premier Partner: Measuring, Managing and Changing Partnering Capabilities at Eli Lilly and Company,” Journal of Commercial Biotechnology; G. Pisano and S. Rossi. 1994. “Eli Lilly and Company: The Flexible Facility Decision”. 1993. Harvard Business School Case Study; Business Week; the United Way and information supplied by the company.


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Abbott LaboratoriesAbbott Park, Illinois-based Abbott Laboratories earns $19.7 billion in sales annually. Its market capitalization exceeds $66 billion. Approximately 60 percent of the company’s sales derive from pharmaceutical products; the remainder from medical products. Abbott has a large presence in the U.S., with major facilities in California, Illinois, Massachusetts, Michigan, New Jersey, New York, Ohio, Texas and Virginia. Spending $1.7 billion for R&D, the company has been recognized as having one of the “10 Best Pipelines.”79

To increase synergistic interaction among its dispersed research sites, Abbott created a Global Pharmaceutical Research and Development (GRPD) business unit in 2000 that combines all R&D activities into a single organization. Abbott’s GRPD encompasses activities within pharmaceutical drug discovery, community and oral pharmaceutical drug development, hospital pharmaceutical development, the Abbott Bioresearch Center, and the company’s Global Licensing and New Business Development group. Abbott’s leading medicines include Humira (adalimumab, a monoclonal antibody for rheumatoid arthritis), Kaletra (lopinavir, a protease inhibitor for treating HIV/AIDS), Omnicef (cefdinir, an oral antibiotic for a wide range of infections), Synthroid (levothyroxine sodium, a synythetic thyroid hormone for treating hypothyroidism) and TriCor (fenofibrate, a cholesterol- and triglyceride-reducing agent).

Sources: http://abbott.com/investor/2003annualreport/html/financials/01_earnings_statement.html; http://www.abbott.com/corporate/history.cfm

Johnson & JohnsonJohnson & Johnson is a comprehensive and broadly-based manufacturer of health care products. The company began when Robert Wood Johnson joined his two brothers, James Wood and Edward Mead Johnson, in New Brunswick, New Jersey to advance Sir Joseph Lister’s theory of antisepsis. With few hospitals in the U.S. large enough to use Lister’s methods, in 1887 the newly incorporated Johnson & Johnson entered the surgical dressings industry. From these roots, company employee Earle Dickson invented BAND-AID Brand Adhesive Bandages, in 1921.

During the 1950s, J&J expanded into the field of pharmaceuticals. One of the company’s first acquisitions was McNeil Laboratories, Inc., which introduced the pain reliever TYLENOL®. The company’s affiliate, Ortho Biotech Products, formed in 1990, became the first biotechnology company developed and operated as a subsidiary of a major health care manufacturer.

Johnson & Johnson consists of a family of more than 200 operating companies located in more than 50 countries around the world. Company product sales of $41 billion span more than 175 countries. It employs over 100,000 people worldwide (more than 50,000 in the U.S.). The Johnson & Johnson Pharmaceutical R&D division, with its corporate headquarters in Raritan, New Jersey, employs 4,363 persons (3,650 in the U.S.).

J&J is distinguished by its outstanding record of excellence for fostering a culture of respect for employees.

Source: http://www.jnj.com/our_company


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The firm of Bristol-Myers was founded as a Clinton, New York-based partnership in 1887; its 1989 merger with Squibb (founded in Brooklyn, New York in 1856) created what was then the second-largest pharmaceutical company in the world.

Bristol-Myers SquibbIn 2003, Bristol-Myers Squibb generated worldwide sales totaling almost $21 billion and a market capitalization of approximately $50 billion. The company is a pioneer in the fight against AIDS, with its product Videx (didanosine), having become in 1991 only the second medicine available in the U.S. for treating HIV infection. Through collaboration with the National Cancer Institute, Bristol-Myers Squibb developed TAXOL (paclitaxel) injection, one of the most commonly administered treatments for cancer in the world. Expanding on its leadership in treating HIV/AIDS, in 2003 the company introduced Reyataz (altazanavir sulphate), the first one-dose-per-day protease inhibitor.

As part of its charitable activities in Africa, Bristol-Myers Squibb provides grants for HIV care and research along with offering its HIV/AIDS medicines at prices discounted by as much as 90 percent. The patent for the medicine Zerit (stavudine), whose rights are held by Bristol Myers and Yale University, is available without cost for the treatment of AIDS in Southern Africa.

Sources: http://www.bms.com/products/data/; 2003 Annual Report; Bloomberg.

Merck & Co., Inc. began operations in America in 1891 in New York City.80

Merck & Co.81

Merck & Co., Inc. began operations in this country in 1891 as a small New York City branch of a German fine-chemical firm, E. Merck. At that time, Germany led the world in generating new chemical knowledge and synthetic organic products. American scholars who wanted to understand the most advanced scientific techniques routinely went to Germany to study. Many of them returned to the United States with knowledge that seeded entrepreneurial ventures in the domestic chemical industry. It was in this context that E. Merck reorganized its tiny sales office in the U.S. as a separate American firm.

By 1897, George Merck had boosted sales above $1 million. Plant expansion began in 1902 when Merck & Co. purchased 120 acres of wooded countryside in Rahway, N.J. In 1912, the company set up its own foreign subsidiary in Canada. In the 1940s, the firm’s laboratories conducted a series of breakthrough research projects involving penicillin, streptomycin, vitamin B12 and cortisone. It was during this period that the company cautiously began exporting to foreign nations. The foundation of Merck’s drive to globalism was laid when the company merged with Sharp & Dohme in 1953, a firm that brought a well-established network for distributing pharmaceutical products overseas to the merger.

Based in Whitehouse Station, N.J., present-day Merck is a global, research-driven pharmaceutical company with more than $22 billion in annual sales, a $106 billion market capitalization and 62,000 employees worldwide, more than 10,000 of whom are employed in the U.S. Merck’s major pharmaceutical products, which account for some 70 percent of sales, treat atherosclerosis, hypertension and heart failure, osteoporosis and respiratory problems as well as provide anti-inflammatory and analgesic relief. Within its largest product group, atherosclerosis treatment, Zocor (simvastatin, which helps modify


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cholesterol) is its best known product. In Merck’s next largest product group focused on hypertension/heart failure treatment, Cozaar and Hyzaar are its most significant products. Over the last 10 years, the company’s compounded annual growth rate in R&D has been 10 percent; in 2003, Merck spent nearly $3.2 billion on its research and development efforts. Today, innovation at Merck is carried out by some 9,500 employees at Merck Research Labs (MRL), which are organized as an integrated “global laboratory.”

Merck has a wide-ranging set of programs in the area of corporate responsibility that focus on six main areas: access to medicines, the environment, community, improving health, employees, and science and innovation.

Sources: Merck archives. 1992. Merck Sharp & Dohme: A Brief History; http://phx.corporate-ir.net/pheonix.zhtml?c=73184&p=irol-reportsannual; www.merck.com and information provided by the company.

In 1905, Swiss firm F. Hoffmann-La Roche & Co. Ltd. formed Hoffmann LaRoche Chemical Works, Inc. which started business in downtown New York as an importer and later expanded operations into New Jersey. Roche was the very first pharmaceutical company to start replacing agents with its own subsidiaries.82

Roche HoldingsWith global headquarters in Basel, Switzerland and its U.S. base in Wilmington, Delaware, Roche Holdings has $7.4 billion in U.S. sales. The company started as a small pharmaceuticals specialty company employing a handful of researchers. Today, Roche’s pharmaceuticals division alone employs more than 5,000 scientists in support of its research and development operations and invests some $3 billion—more than 18 percent of divisional turnover—in R&D. Roche’s two major U.S. pharmaceutical research centers are located in Nutley, New Jersey, where discovery efforts focus on metabolic disorders, oncology and vascular diseases, and Palo Alto, California, where efforts are devoted to the central nervous system, inflammatory diseases and viral diseases. The company also maintains an active worldwide network of collaborative research partnerships, the majority of which are in America, and involve 22 U.S. firms. By far the best known among Roche’s U.S. partners is San Francisco-based Genentech (featured below), the company whose founding touched off the global biotech revolution.

In the 1990s, Roche’s launch of Invirase (saquinavir) represented the first medicine in the protease inhibitor class of HIV/AIDS treatments. The company registers 125 projects in its R&D pipeline, focused mainly on treatment for ailments of the central nervous system such as anxiety and tension, cancer, and metabolic diseases such as obesity and diabetes. Among Roche’s present portfolio of major products for these categories are Lexotan (bromazepam) for anxiety and tension; Herceptin (trastuzumab) for breast cancer; and Xenical (orlistat) for obesity.

Source: H.C. Peyer. 1996. Roche: A Company History 1896-1996, Basel, Switzerland


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AstraZeneca LP

The beginnings of AstraZeneca’s activities in America can be traced back to 1912 with the creation of the Atlas Powder Company in Wilmington, Delaware, the result of a mandated DuPont Company divestment.

AstraZeneca first became involved in cancer research in the 1960s. Among its wide range of pharmaceutical products, the company has developed and marketed the following drugs specifically related to the treatment of cancer: Arimidex (anastrozole), Faslodex (fulvestrant) and Nolvadex (tamoxifen) for the treatment of breast cancer; Casodex (bicalutamide) for the treatment of prostate cancer; Zoladex (goserelin acetate) used in the treatment of both breast cancer and prostate cancer; IRESSA (gefitinib) for the treatment of lung cancer; and Tomudex (raltitrexed) for the treatment of colorectal cancer.

AstraZeneca PLC employs a total of approximately 60,000 people worldwide. In 2003, its AstraZeneca LP subsidiary had 8,000 employees and generated sales in the country exceeding $1 billion. Nexium (esomeprazole magnesium) is a well-known product utilized here in the U.S.

Source: www.astrazeneca-us.com/content/about.

For most of the 19th century, the U.S. chemical industry was characterized by small, geographically localized firms that largely produced simple inorganic chemicals. In the latter half of the 19th century, although still in its infancy, America’s chemical/pharmaceutical industry thrived. The pace of change began to accelerate. Industrialization, new technologies, modern transportation systems and medical advances opened up merchant opportunities around the world.

During World War I, the prices of chemicals and medicinals rose sharply, along with demand. American manufacturers cut off from their German sources of supply virtually overnight, turned to manufacturing their own products. Rhone-Poulenc (recently under the umbrella Aventis) can be traced back to 1919 when this French firm first entered the North American market with the creation of a subsidiary operation—the Rhodia Chemical Company.

The postwar recession, though short-lived, was severe. Consolidation of failing firms produced major changes in the chemical industry. A postwar glut of raw materials and excess plant capacity, led to an explosion in productivity. American companies received another boost when the Treaty of Versailles sanctioned the forfeiture of German patents, trademarks and property. In the U.S., it is estimated that 4,500 patents were made available on a nonexclusive basis. Other forms of industrial property, such as the valuable Bayer trademark, were also expropriated.83 Very shortly thereafter, these reparations led to the creation of the Chemical Foundation charged with the administration of patents. The removal of patent barriers, based upon the Treaty of Versailles, contributed to the decision of firms to internalize their research and development function.

Continuous technological innovation had a profound impact on the products and processes of a wide range of downstream industries.84 Dramatic advances in scientific understanding made it possible, for example, to design and produce synthetic fibers and pharmaceuticals. By the end of the 19th century, German and Swiss firms were the leaders in the organic chemical products industry, leaving firms from Great Britain far behind.


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The “roaring twenties” were a period of prosperity despite the trade protectionism that frequently curtailed overseas business. The increase in automobiles and other consumer goods in the U.S. provided a strong stimulus for new chemical products such as plastic resins, antifreeze, cellophane and rayon. By 1924, citric acid was being mass produced by Pfizer. Within the chemical industry, imports declined, new supply chains were established and U.S. manufacturing grew to surpass foreign means of serving the domestic market.

Although not immune, the chemical industry was somewhat insulated and therefore fared relatively well during the depression. In the 1930s, a number of major products were invented whose full economic impact was reached after WWII.

In 1931, Baxter International was founded as the first manufacturer of commercially prepared intravenous solutions. During its first two years, the company distributed products manufactured by another company in Los Angeles owned by Dr. Don Baxter. But, as demand in the Midwest grew, the need for a more central manufacturing base became apparent. In 1933, the company opened its first manufacturing facility in a renovated automobile showroom in Glenview, Illinois where six employees “turned out the complete line of five solutions in glass containers.”85

Baxter InternationalFrom its base in Deerfield, Illinois, Baxter International operates an $8.9 billion dollar per year enterprise. Baxter operations are structured around three major product areas: bioscience (for biopharmaceutical and biosurgical products), medication delivery (injectable intravenous solutions and pharmaceuticals) and renal therapies (therapies for kidney disease). Its facilities throughout the United States can be found in Arkansas, California, Illinois, Indiana, Mississippi, New Jersey and North Carolina. The company spent more than $1.3 billion on research and development in 2003.

Among Baxter International’s product firsts are the commercially manufactured intravenous solutions—the product line around which the company was founded in 1931—and the first portable kidney dialysis machine. Baxter’s biopharmaceuticals cover therapies for hemophilia, critical care therapeutics, antibody therapies, therapies for biosurgery and tissue regeneration therapies, and pulmonology products. Through the Baxter International Foundation, the company philanthropically supports increased access to health care for the disadvantaged and underserved in 25 countries across five continents.

Source: www.baxter.com/about_baxter/company_profile/sub/history.html; Annual Report.

The U.S. chemical industry, although technologically not as sophisticated as the European chemical industries, grew by intensively exploiting its natural resource endowments.

Continued growth in the industry led to expansion abroad. On June 22nd 1942, Pfizer went public. At the end of WWII, American chemical producers were in a strong position. Many of their overseas competitors had been savaged, their credit weakened, plants bombed or taken over for military-related production, and distribution networks were disrupted. WWII took a heavy toll on European economic infrastructure. As a result, the U.S. emerged as the dominant chemical-producing nation at the end of the war. From 1938 to 1951, the U.S. share of global production rose from 30 percent to 43 percent, while that of Germany fell to 8 percent from its earlier 22 percent share.86


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The 1940s brought a vigorous return to globalization. Global trade and international currency fluctuations (both of which are driven by national and international government regulation) impacted business strategy. During the interwar years, the U.S. chemical industry grew in technological sophistication. The government of the United States provided some measure of tariff protection to this industry.

From 1914 to 1945, Ciba (recently under the umbrella multinational enterprise, Novartis) greatly expanded its pharmaceutical plant in Summit, New Jersey. Sandoz, which manufactured a complete line of textile and leather finishes, water repellants and other textile processing in New Jersey, extended its operations in the state during the war years. Its pharmaceutical division was particularly innovative, making important discoveries in epilepsy and laxative research. During this same period, Giegy also grew in New Jersey.87

From its origins in a small room above a Los Angeles pharmacy in 1950, Allergan expanded into a corporation which now develops and commercializes products for eye care, neuromuscular and skin care, marketing its products in over 100 countries worldwide.88 New York City is the corporate headquarters location of Forest Laboratories, a pharmaceutical firm founded in 1954. The company’s latest product is Namenda, the first approved therapy in the U.S. for those with Alzheimer’s disease.89

AllerganAllergan is a specialty pharmaceutical company headquartered in Irvine, California. It is a globally active, $1.7 billion per year firm with a market capitalization of $10 billion. It is organized around three core product groups: ophthalmic pharmaceuticals, Botox and skin care. Allergan invests approximately 10 percent of sales into research and development.

Allergan’s best known medicine of recent years is Botox (botulinum toxin A). The product is popularly known for its cosmetic uses, but actually grew out of the company’s long-standing specialization in therapeutic agents for conditions and diseases of the eye and originally was used for treatment of ophthalmic movement disorders. Two major new medicines introduced by Allergan are Lumigan, which treats glaucoma and Restasis which treats dry eye disease, a disorder affecting more than three million people in the United States.

Source: http://www.shareholder.com/AGN/downloads/2003AnnualReport.pdf; information provided by the company.

Forest LaboratoriesNew York, New York-based Forest Laboratories describes itself as “a nimble pharmaceutical company” that uses its “experience and smaller size to bring important treatments to the marketplace.” Forbes magazine has recognized Forest as the best managed company in the pharmaceutical and biotechnology sector for 2004.

Forest’s treatment research emphasizes four human body systems: central nervous, cardiovascular, respiratory and endocrine. Its Lexapro (escitalopram oxalate) is the fastest growing antidepressant of its class in the U.S., while its high-blood pressure therapeutic, Benicar (olmesartan medoxomil), has become a well-received treatment for hypertension. Forest’s latest product, Namenda (memantine HCI), is the first therapy approved in the United States for those suffering from moderate to severe Alzheimer’s disease. Beyond its headquarters, Forest has U.S. operations in Long Island, New Jersey, Missouri and Ohio.

Source: www.frx.com.


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Boehringer IngelheimBoehringer Ingelheim was established in the U.S. in 1971 to market respiratory and cardiovascular medications. The company’s early North American activities were modest: 19 employees and three products. In 1978, the company expanded its pharmaceutical operations with the acquisition of Roxane Laboratories in Columbus, Ohio. Boehringer Ingelheim advanced into the hospital market in 1997 through the acquisition of Ben Venue Laboratories, a manufacturer and marketer of sterile injectable pharmaceuticals. In 1999, Boehringer Ingelheim Consumer Healthcare Products was established to market over-the-counter healthcare products.

Today, Boehringer Ingelheim’s U.S. corporate headquarters are located in Ridgefield, Connecticut. The company posted record 2003 sales of nearly $3 billion in the U.S The company is part of Boehringer Ingelheim GmbH, the world’s largest private pharmaceutical enterprise.

Source: www.bicorporation/about/.

The Introduction of BiotechnologyIn the 1970s, developments underway since WWII ushered in the biotechnology revolution. Biotechnology is an outgrowth of interdisciplinary research in molecular biology, immunology and biochemistry, aided by new techniques such as X-ray structural analysis and computer-assisted drug synthesis. Just as our understanding of chemistry in the 20th century revolutionized products and production processes in the dye industry, pharmaceuticals, agriculture and fuel, biotechnology redirects the focus from chemistry to molecular biology in applications across a variety of industries.90 Biotechnology has changed the face of pharmaceutical chemistry.91

Biotech emerged in the West from a technological breakthrough that challenged the older pharmaceutical industry, long established in the more mature regions of the Northeast and Midwest. Genentech, established by geneticist Herb Boyer and venture capitalist Bob Swanson in 1976, is considered the corporate founder of the biotechnology industry.92

GenentechThe first company to be founded on the “biological technology” of splicing genes to produce proteins that could be used as therapeutic medicine, Genentech has developed products that are estimated to have helped more than one million people. The South San Francisco firm has sales of $3.3 billion, and a research effort that focuses on basic and applied scientific advances in oncology, immunology and vascular biology. Genentech has created 12 protein-based products that are currently available for treating serious or life-threatening diseases and upwards of 30 projects in its development pipeline.

In 1999, Genentech set for itself five milestones, known as “5x5 goals” that included having five new products or indications approved by 2005. Some of the advanced developments that have occurred with this strategic framework are: Xolair (omalizumab) for persistent asthma, Raptiva (efalizumab) for chronic plaque psoriasis and Avastin (bevacizumbab) for first-line (previously untreated) metastatic cancer of the colon or rectum.

The Genentech Foundation for Biomedical Sciences has, since its founding in 1988, awarded millions of dollars to support biomedical research and education in the San Francisco Bay Area.

Source: http://www.gene.com/gene/index.jsp; 2003 Annual Report.


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Biogen IDEC was formed in November 2003 upon the merger of two leading biotechnology enterprises, Cambridge, Massachusetts-based Biogen and San Diego, California-based IDEC Pharmaceuticals.

Biogen IDEC

A group of the world’s most accomplished biologists gathered in Geneva, Switzerland in 1978 and founded a new kind of pharmaceutical company, Biogen NV. In 1986, Biogen’s worldwide licensee for recombinant alpha interferon, Schering-Plough, began commercial sales of the first Biogen-developed product—Intron A (interferon alfa-2b) for the treatment of hairy cell leukemia. The company’s excellence in research has been recognized throughout its brief history. Specifically, in 1980, Walter Gilbert, Ph.D., of Harvard University and one of Biogen’s founders, received the Nobel Prize for sequencing nucleotides. Later, Phillip Sharp, Ph.D. of MIT and a founder of Biogen, received the Nobel Prize in Medicine for his discovery of split genes. In this same year, 1993, Professor Sir Kenneth Murray of the University of Edinburgh, another Biogen founder, was knighted for his discovery of hepatitis B antigens.

IDEC Pharmaceuticals Corporation was founded in 1985 in Mountain View, California to develop and commercialize “anti-idiotype” monoclonal antibodies, a patient-specific, customized approach to treating nonHodgkin’s lymphoma. In November 2003, Biogen IDEC, Inc. was formed by the merger of these two leading biotechnology companies. The combination has resulted in a fusion of complementary strengths in therapeutic focus, research and development capabilities, manufacturing expertise, global infrastructure and financial position.

Combining 2003 Dun and Bradstreet data, today’s merged Biogen IDEC registers approximately $1.9 billion in sales. Its two major products are Rituxan (rituximab), a monoclonal antibody to treat non-Hodgkin’s lymphoma (NHL) and Avonex (Interferon beta-1a), used for treating those suffering from relapsing multiple sclerosis. In the U.S., the company co-promotes Rituxan with Genentech (see above). Its overall development efforts concentrate mainly on treatments for cancer and autoimmune diseases. The company’s innovation pipeline includes 10 products already in clinical development.

Biogen IDEC’s initial plans for R&D investment are at the level of $550 million annually. Out of a global workforce of around 4,000, it currently has 1,000 people working in R&D, 40 percent of whom are dedicated to fundamental discovery research. Although well recognized for its research-driven activities, Biogen IDEC also has unique manufacturing capabilities. It is one of a select few biotechnology companies that has three licensed biological manufacturing facilities. Its plant in Research Triangle Park, North Carolina constitutes one of the largest cell culture facilities in the world. Plans are to increase manufacturing capacity with the addition of a new facility in Oceanside, California.

The company emphasizes strong community ties as part of its operational objectives and strategies. In Cambridge, Massachusetts, where Biogen IDEC is the largest for-profit employer, it also was recently named Corporate Citizen of the Year by the Chamber of Commerce. In the city, the firm operates an advanced teaching center from within its headquarters where local students and teachers participate in educational programs on biotechnology. In San Diego, it works closely with local community colleges


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to create new training programs for work in the biopharmaceutical sector, especially in the highly specialized area of biotechnology production and manufacturing operations. Similar efforts are being undertaken by Biogen IDEC’s operations in Research Triangle Park.

Sources: www.biogen.com/site/013.html; 2003 Annual Report; Cambridge Chamber of Commerce.

Amgen began operation in 1980 in Thousand Oaks, California. It introduced two of the first biologically-derived human therapeutics, EPOGEN and NEUPOGEN which became the biotechnology industry’s first blockbusters.93 Amgen has evolved from a relatively small biotech firm to become one of the top 10 leading pharmaceutical and life science R&D companies in the country.

Amgen

The success story of Amgen begins in 1980 with the founding of AMGen (Applied Molecular Genetics) in Thousand Oaks, California by venture capitalists Bill Bowes, Franklin “Pitch” Johnson, Sam Wohlsteadter and Raymond Baddour. Amgen pioneered the development of novel and innovative products based on advances in recombinant DNA and molecular biology.

Amgen introduced EPOGEN (epoetin alfa) in 1989, an anti-anemia drug for kidney dialysis patients, and NEUPOGEN (filgrastim) in 1991, an anti-infection drug for cancer chemotherapy patients. Amgen’s innovation pipeline is structured around five therapeutic areas: oncology, inflammation, metabolic disease, neurology and hematology. Founded on new advances in genetic and molecular science, Amgen has guided its R&D efforts through applications of genomics, microarray analysis and bioinformatics. Every year since 1994, Amgen has put the equivalent of at least 20 percent of product sales into R&D, investing nearly $1.7 billion in 2003.

Beyond its headquarter-based R&D, Amgen also conducts drug-discovery activities in Washington, Colorado and Massachusetts. In the mid-1990s, Amgen developed the first multi-product recombinant human protein manufacturing facility. Its pure bulk manufacturing is conducted in California, Rhode Island and Colorado with last state “final formulation, fill and finish” processes conducted at Amgen’s manufacturing facility in Puerto Rico. From process development, to clinical manufacturing, to full-scale therapeutic protein production, Amgen has built one of the largest and most reliable operations in the human therapeutics industry today. Amgen is a Fortune 500 company whose business has expanded throughout the United States, Japan, Australia, Canada and Europe. It is the world’s largest biotechnology company with annual sales of $8.4 billion.

Through its philanthropic outreach organization, the Amgen Foundation, the company contributes approximately $10 million annually to support non-profit organizations that improve community resources, enhance individual lives and promote science education.

Sources: About Us. 2004. Backgrounder, Company Profile; http://www.amgen.com/;www.amgen.com/corporate/AboutAmgen/backrrounder.html;http://investors.amgen.com/phoenix.zhtml?c=61656&p=irol-reportsAnnual and P. Hemp. 2004. “A Time for Growth: An Interview with Amgen CEO Kevin Sharer,” Harvard Business Review, Massachusetts, July/August.


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Researchers at the laboratory for Molecular Biology in Cambridge, U.K., formed Centocor, incorporated in 1979. This biotechnology company’s first product was a diagnostic test for the detection of the rabies virus.94 In 1981, the Chiron biotech company was founded by professors William Rutter, Ph.D.; Edward Penhoet, Ph.D.; and Pablo Valenzuela, Ph.D.95

CentocorHorsham, Pennsylvania-based Centocor has sales of $2.1 billion. The company was founded in 1979 in the early days of the biotechnology sector’s formation. Centocor based its product-development efforts on the newly discovered science of monoclonal antibodies.

Through a merger completed in 1999, Centocor became a fully-owned subsidiary of Johnson & Johnson. Its research is still based on the technology of monoclonal antibodies (tailor-made antibodies derived from the clones of a single cell). Centocor products have led to advances in the treatment of heart attack, unstable angina, Crohn’s disease and rheumatoid arthritis. The operation’s pipeline mainly targets two areas: immunologic disorders and cardiovascular disease. Its major products are Remicade (infliximab, the only monoclonal antibody approved for Crohn’s disease and rheumatoid arthritis), ReoPro (abciximab, a first-in-class drug for coronary care) and Retavase (Reteplase recombinant, a novel treatment for heart attack).

Source: http://www.centocor.com/cgi-bin/site/about/whoweare.cgi; http://www.jnj.com/our_company/family_of_companies/index.htm?company=338

ChironChiron Corporation, headquartered in Emeryville, California, focuses on developing products for infectious diseases and cancer. It has upwards of $1.8 billion in annual sales and employs more than 5,300 people worldwide. Apart from its headquarters and research operations in California, the company also has distribution and manufacturing operations in the U.S. and a second U.S. research center in the state of Washington.

Chiron’s principal business units are in biopharmaceuticals, vaccines and blood testing. With its Chiron Vaccines, the company is the world’s fifth-largest vaccines manufacturer overall and the world’s second-largest manufacturer of influenza vaccines. The company’s Proleukin (aldesleukin), its leading cancer product, treats metastatic melanoma and metastatic renal cell cancer. Its Procleix System products are used for 80 percent of the tests conducted to detect viral DNA and RNA—such as HIV and West Nile virus—in the U.S. blood supply. Along with its partner, San Diego-based Gen-Probe, Chiron is developing fully automated system products and additional markets outside the United States.

Sources: www.chiron.com/.

GenzymeCambridge, Massachusetts-based Genzyme was founded by Henry Blair and Sherry Snyder in 1981. The company employs approximately 6,000 people worldwide (the majority of whom work in the U.S.), generates sales of $1.7 billion and has a market capitalization greater than $12.2 billion.

The company’s portfolio of more than 25 products and services is focused on genetic disease, renal disease, orthopaedics, transplant and immune diseases. Genzyme’s lead product is Cerezyme, an enzyme replacement therapy available in more than 80 countries around the world to treat serious symptoms that include anemia, spleen and liver enlargement and bone disease.

Source: Genzyme 2003 Annual Report and www.genzyme.com/corp/.


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CephalonWest Chester, Pennsylvania’s Cephalon is a fast-growing biopharmaceutical company that specializes in drugs that treat neurological diseases and cancer. The company ranks 115th on Deloitte’s Technology Fast 500 list for North America with a 3,138 percent five-year growth rate. Currently employing over 2,000 people worldwide, Cephalon has a 2003 market capitalization of approximately $3 billion and sales exceeding $700 million. In addition to its presence in Pennsylvania, the firm also operates manufacturing facilities in Salt Lake City, Utah.

Founded in 1987, the company adopted a “balanced risk” strategy in the 1990s whereby instead of relying only on in-house research capabilities (as would a typical biotech firm), Cephalon also began acquiring and marketing high-growth technologies generated by others. The merits of the approach seem validated by the company’s self-assessment that “of the 315 publicly-traded biotechnology companies, Cephalon is one of about 25 that are profitable.”96 Cephalon products include CEP-1347, a proprietary small molecule in Phase II and III clinical trials for treatment of Parkinson’s disease.

Sources: http://www.cephalon.com/business/index.html; 2003 Annual Report.

Millennium Pharmaceuticals97

In just 10 years, Millennium Pharmaceuticals has grown from a bold, young startup firm, into a leading pharmaceutical company. Its two key products are: Velcade (bortezomib), for the treatment of relapsed and refractory multiple myeloma, a cancer of the blood; and Integrilin (eptifibatide), a market-leading intravenous anti-platelet drug for patients with severe cardiovascular diseases.

With its headquarters in Cambridge, Massachusetts, Millennium Pharmaceuticals has $433.7 million in sales, a $3.7 billion market capitalization and employment of 1,530 persons in 2003. Millennium Pharmaceuticals has strategic alliances and business partnerships with some of the world’s leading pharmaceutical and biotechnology firms. These relationships range from disease-oriented therapeutic collaborations and technology-transfer arrangements to marketing and licensing agreements.

Source: http://mlnm.com.

Speculation arose that the new biotech start-ups based in new regions would quickly surpass the old industry giants. However, many traditional pharmaceutical firms in the U.S. continue to show remarkable resilience and return on investment. Indeed, Lilly and Company was the first pharmaceutical firm to bring to market a human-health-care product (Humulin) created using recombinant DNA technology. Traditional pharmaceutical firms have maintained their dominant positions within this complex biopharmaceutical industry, partly via merger and acquisition strategies.

Firm ConsolidationThe pharmaceutical industry’s ability to evolve through its encouragement and accommodation of scientific breakthroughs, shifted the product focus from botanical products to alkaloids and biologicals, and finally, to synthetic chemicals. Similarly, production technology shifted competitive advantage from small scale apothecary shops to large manufacturing plants and finally to integrated research and development multinational operations.

The sector faced a number of challenges through the 1990s including: debates over national systems


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of health care; increases in the enormous R&D costs and time frames; larger production scales; and the failure of high-profile products during the late stages of and after clinical trials. Both the biotech and the pharmaceutical sectors seek shared risk and lower costs for research. Consolidation in the industry is extensive.The dependence on retained earnings for further investment has intensified these tendencies.

The majority of Technology Fast 500 CEOs believe that sheer determination and entrepreneurial spirit are the two main reasons they attribute to their personal success. The following case studies present information on leading Technology Fast 500 companies in life sciences.98

AdolorAdolor commenced operations in 1994 and today has more than 140 employees working in areas including discovery research, drug development, clinical research, manufacturing, business development and marketing. Adolor was founded to capitalize on emerging proprietary development in cloned opioid receptors and continues today as a leader in the discovery and development of novel opioid receptor-targeted therapeutics.

Exton, Pennsylvania-based Adolor Corporation develops prescription management products known as analgesics. Its employees (including 56 in the U.S.) have helped the company generate a market capitalization of $494 million and $20.7 million in sales. Racking up 18,839 percent growth over five years, the firm ranks 26th on Deloitte’s Technology Fast 500 list. Adolor’s lead product candidate, Entereg (alvimopan), is being developed to treat postoperative ileus, a gastrointestinal side effect that afflicts millions of patients following surgery. The company has partnered with GlaxoSmithKline to develop and commercialize the product. In 2003, all four of Entereg’s Phase III studies were completed and the company aims to complete its New Drug Application (NDA) to the U.S. Food and Drug Administration in 2004. Adolor’s next target product, currently in clinical trials, is a patch for treating postoperative incision pain.

Sources: http://www.adolor.com/; 2003 Annual Report.

ViroLogicSouth San Francisco, California-based ViroLogic is a biotechnology company focused on the treatment of serious viral diseases such as AIDS and hepatitis. Its sales for 2003 were $33.4 million while its market capitalization was $129 million—all achieved with a workforce of 170 employees. The company places 19th on Deloitte’s Technology Fast 500 list for North America on the back of a 24,666 percent five-year growth rate.

ViroLogic combines the disciplines of molecular biology, engineering, information systems, and clinical research in its research and development efforts. Its backbone proprietary technology, PhenoSense, tests drug resistance in viruses. ViroLogic began as a company dedicated to seeking ways to counter the resistance developed by some HIV patients to antiretroviral treatments. Its research efforts have since expanded into therapeutics for other viral diseases such as hepatitis B and C. The firm now partners with nearly all major pharmaceutical companies active in anti-viral drug development.

Sources: www.virologic.com/; 2002 Annual Report.


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DeltagenDeltagen was founded in 1997 in Redwood City, California where it is headquartered. Deltagen provides drug discovery tools and services to the biopharmaceutical sector. It grew 4,543 percent over the past five years and ranked 85th on Deloitte’s Technology Fast 500 list. Deltagen has $17.7 million in annual sales, a market capitalization of $2 million and 290 employees worldwide (100 in the U.S.).

Deltagen’s “drug discovery engine” centers on its DeltaBase, a compendium of mammalian gene functions that relate to key aspects of the pharmaceutical product development process. The company can now create and describe more than 1,000 mouse gene knockouts (genes that have been deleted from mouse models with genetic structures 95 percent similar to human genes to test their pharmaceutical relevance). This number of knockouts is exponentially higher than was previously thought possible. Deltagen has filed more than 1,000 patent applications on gene functions and drug discovery, which places it in the top tier of companies developing publicly recognized genomics-related intellectual property.

Sources: www.deltagen.com; Deloitte.

ID Biomedical

With global headquarters in Vancouver, British Columbia, Canada and U.S. headquarters in Bothell, Washington, ID Biomedical’s 58 U.S. employees helped earn the company $4.8 million in sales and generate a market capitalization of $329 million in 2003. According to Deloitte, the company’s revenues have grown over 6,000 percent in the last five years, placing it 71st on the North America Technology Fast 500.

As a biotechnology company, ID Biomedical focuses on the development of proprietary subunit vaccine products. A subunit vaccine is defined as a “vaccine that creates a bodily immunity to a virus or bacterium from whose DNA the vaccine is made.” The best known affliction that such vaccines treat is the flu (formally known as influenza). In the area of biodefense, the company has partnered with Dynport Vaccine Corporation to develop and manufacture an injectable plague vaccine using proprietary ID Biomedical technology.

Sources: www.idbiomed.com/; Annual Report; Deloitte; Encarta; World Health Organization.

United Therapeutics

United Therapeutics was founded in June 1996 as Lung Rx, Inc. The company changed its name to United Therapeutics Corporation in December 1997 and made its initial public offering on June 17, 1999.

United Therapeutics is a biotechnology company that develops treatments for life-threatening conditions in three therapeutic areas: cardiovascular (still its main product area), oncology and infectious diseases. Based in Silver Spring, Maryland with its R&D facility located in North Carolina’s Research Triangle Park, the company posted 2003 sales exceeding $53 million, a market capitalization of $501 million and an employment base of 150 employees. Growing at the rate of 55,678 percent over the last half decade,


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United Therapeutics ranks 10th on Deloitte’s Technology Fast 500 list.

The company’s product development principle is “Medicines for Life” and all its therapeutic R&D focuses on life-threatening illnesses. United Therapeutic’s product development efforts “strive for balance within and across” its therapeutic areas, For example, its cardiovascular therapeutics include a pharmaceutical (Remodulin), a diagnostic (through its telemedicine) and a nutriceutical (arginine formulations). Remodulin is United Therapeutics’s lead product. Remodulin (treprostinil sodium) provides patients a longer-lasting version of the prostacyclin hormone molecule, which improves the exercise ability and symptoms of those suffering from PAH (pulmonary arterial hypertension). It is the most commonly used medicine for treating PAH, a condition that results in heart failure if not remedied. Remodulin belongs to a suite of complementary therapeutics, part of the company’s approach toward balanced development efforts. Although a self-described “cardiovascular company,” United Therapeutics has directed its discovery and testing efforts into the newer focus areas of cancer and infectious disease. Currently seven out of the firms’ 15 product pipeline projects are in these latter categories.

United Therapeutics’ subsidiary, Medicomp, provides mobile “telemedicine” devices and services such as the CardioPal portable heart monitor and EpiCardia service that allow a patient from anywhere in the United States to send out a printed ECG report. Another subsidiary, Unither Pharma, markets arginine-based dietary supplements under the Heart Bar line of products, designed to aid the elasticity and functioning of blood vessels and capillaries.

Sources: www.unither.com/; 2003 Annual Report; Deloitte.

Biosphere MedicalBiosphere Medical, headquartered in Rockland, Massachusetts, develops bio-engineered microspheres for use in a treatment known as embolotherapy, a minimally invasive treatment of tumors and malformations in veins. BioSphere Medical made becoming a global leader in embolotherapy its primary mission in 1999. With $12.8 million in sales, a $43 million market capitalization and 87 employees worldwide (46 in the U.S.), the company ranks 76th in Deloitte’s Technology Fast 500. It grew 5,916 percent over five years.

The core of the company’s offering—miniature spherical beads that can be used in various medical applications—derives from patented bio-engineered polymers and manufacturing methods. In embolotherapy, the microspheres are injected into blood vessels that feed a targeted tissue area, blocking blood flow and thereby destroying or devitalizing the diseased area. The company’s key focus is on treatment of uterine fibroid tumors through a procedure known as uterine fibroid embolization (UFE). In March 2002, BioSphere Medical received both CE and Canadian approvals to sell EmboGold Microspheres in Europe and Canada.

Source: www.biospheremed.com/company/index.cfm.


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Epoch BiosciencesEpoch Biosciences, headquartered in Bothell, Washington, offers products and technologies for the field of genetic analysis. It has achieved sales of $8.9 million per annum, a market capitalization of $49 million and employment of 31 people in the U.S. and 67 worldwide. Recording 6,916 percent revenue growth over five years, it ranks 67th on the Deloitte Technology Fast 500.

Epoch’s commercial offerings are essentially “enablers,” helping scientists and physicians perform rapid analysis of large bodies of genetic information. In the area of pharmaceutical research, Epoch products and technologies can be used in connection with infectious disease, oncology and genetic diseases. They also have applications in forensics, food testing and responding to the threat of biowarfare and bioterrorism.

Sources: http://www.epochbio.com/; Deloitte.

Cortex PharmaceuticalsAs its name—a reference to the brain’s surface layer of gray matter—implies, Irvine, California-based Cortex Pharmaceuticals develops products for treating brain-related ailments. With 21 employees and a market capitalization of $46 million, the company earned $5.2 million in sales for 2003. Cortex ranked 82nd on Deloitte’s Technology Fast 500, registering a 4,848 percent five-year growth rate.

The company’s products are based on a new technology known as Ampakine compounds that enhance memory and cognition. The medical applications for the products that Cortex is developing are wide-ranging and include treatments for Alzheimer’s, schizophrenia, attention deficit hyperactivity disorder and autism. The company reports that one of its Ampakine compounds for Alzheimer’s and schizophrenia has already passed through three Phase I trials, two Phase IIa trials, and is being evaluated for three additional Phase IIb trials. Overall, the variety of disorders targeted by the company constitutes an estimated $35 billion pharmaceutical market growing at an annual growth rate of above 17 percent.

Sources: www.bioscorpio.com/cortex_pharmaceuticals_inc.htm; Deloitte.

Consolidation and restructuring often became necessary in the industry during the 1990s. Traditional pharmaceutical firms looking to enhance their product pipelines matched up with biotech companies seeking external resources, additional expertise and the ability to quickly scale-up production and global marketing capabilities. A pattern of increasing interdependence emerged. In December 1999 Rhône-Poulenc and Hoechst announced their intention to combine their pharmaceutical and agricultural businesses to create Aventis.99

Aventis PharmaceuticalsWith 10,000 employees in the U.S. and 69,000 employees worldwide, Aventis garners approximately $7.2 billion in annual sales in the United States. Headquartered in Strasbourg, France, the company operates in 85 countries, but its main market is in the U.S. Its U.S. administrative and research base is located in Bridgewater, New Jersey. Aventis’ market presence in the U.S. has grown steadily in recent years from some 33 percent of core business sales coming from America in 2000 to 38 percent in 2003.

Aventis, in its current form, was created in 1999 with the merger of French-based Rhône-Poulenc and German-based Hoechst, two firms whose corporate histories go back to the early origins of the modern pharmaceutical sector in 19th century continental Europe. Aventis developed its “drug innovations and approval” (DIA) process to break with the traditional mold of pharmaceutical R&D and create a research


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environment more akin to the efficiently networked, horizontally structured innovation processes found in biotech firms. Major Aventis products include the non-sedating antihistamine Allegra (fexofenadine), chemotherapy agent Taxotere (docetaxel) and the anticoagulant Lovenox (enoxaparin sodium), the most widely used treatment of its kind in the world.

Sources: http://www.aventis.com/main/home_static.asp; 2003 Annual Report; information supplied by the company.

Novartis, formed in 1996, represented, at that time, the largest corporate merger in history. Novartis was formed initially from three separate companies: Geigy, whose history goes back to the middle of the 18th century; Ciba, founded around 1860; and Sandoz, established in 1886. Subsequently, Novartis acquired Merck & Co.’s crop protection business.100

NovartisNovartis, based in Basel, Switzerland, registered $3.7 billion in U.S. sales in 2003. The company employs 5,600 people in the U.S., nearly 20 percent of its almost 30,000 worldwide employees. The company’s pharmaceutical division posted global sales of $16 billion in 2003 and devoted the equivalent of 19 percent of sales revenue to R&D. Although it is a Swiss company, its pharmaceutical division’s global R&D system, the Novartis Institutes for Biomedical Research (NIBR) is based in Cambridge, Massachusetts, where the company plans to invest as much as $4 billion in developing its R&D headquarter facilities over the next decade. Novartis also maintains research operations and partnerships in New Jersey, California, New York, Maryland, Florida and Virginia.

A total of 78 development projects fill Novartis’ innovation pipeline—16 involve cancer and another nine cardiovascular medicines, the company’s key growth areas. Representative products from the Novartis oncology business unit include Femara (letrozole), a first-line hormonal treatment for postmenopausal women with breast cancer and Zometa (zelodronic acid), for patients with multiple myeloma and bone metastases (the condition of cancerous cells spreading from a primary tumor to the bones).

Sources: www.novartis.com/about_novartis/en/1company.shtml; 2003 Annual Report.

The growing interdependence between the biotech and pharmaceutical sectors does not diminish the intense rivalry and competition within and across the individual sectors. The restructuring of the industry and the massive realignment of the sectors also changed the geography of the industry. The amount of vertical disintegration varies with each firm and drives strategy. Many firms keep the entire drug discovery and development process in-house, but usually, bringing a pharmaceutical drug to market is split among different establishments, different locations around the world and even different firms.

Geographical Distribution of the IndustryThe biopharmaceutical industry is global. Since biotech-related activity is being pursued in a wide variety of industries in the United States, it is not surprising that virtually every state has a least one biotech company.101

Initially, the foreign direct investment and cooperative alliance forms of cross-border commerce in the chemical industry were largely driven by trade; today, they increasingly determine trade.102 Foreign


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trade and FDI as well as international transfers of technology and managerial processes have been important factors in the evolution of the industry.

The traditional American pharmaceutical industry has a strong presence in the New Jersey/New York/Pennsylvania and Midwest regions. Because firms in the industry tend to locate in close proximity to one another forming clusters, much of this traditional industry remains along the New York City-New Jersey-Philadelphia corridor. Most of the world’s leading traditional pharmaceutical firms have their world or U.S. headquarters, or in the case of foreign-based multinational enterprises, their FDI, in traditional mature regions. These firms have generally located their principal research laboratories and product launching plants either on-site or in close proximity to their offices. As new products achieve commercial economies of scale and manufacturing production processes become increasingly routine, they are frequently outsourced to lower-wage regions, both inside the U.S. and to foreign nations. Conversely, foreign firms are increasingly relocating their research and development operations to the United States.

Although less glamorous, downstream functions such as manufacturing and marketing contribute substantially to a region’s economic well-being through growth in regional incomes, maintenance of a relatively good income distribution and contribution to a quality-living environment.

Traditionally, chemical drug manufacturing focused on providing sufficient capacity and developing better sourcing strategies. Some of them have now begun to upgrade their manufacturing functions and view manufacturing strategically as a mechanism for reducing production costs and gaining/retaining competitive advantage. Rising manufacturing costs as a percentage of sales have led many pharmaceutical firms, including Lilly for example, to heavily invest in reengineering their production processes.103 In order to improve productivity at GlaxoSmithKline, the firm instituted a thorough review of continuous quality programs in their manufacturing and R&D processes.104 Manufacturing, which had been low on the list of priority concerns for many firms for many years, is now a frontline issue for productivity efficiencies and quality controls.

GlaxoSmithKline105

The history of GlaxoSmithKline, formed in 2000, is an amalgamation of many successful, international mergers and acquisitions. GlaxoSmithKline (GSK) traces its roots in the U.S. as far back as 1830, when John Smith opened his first drugstore in Philadelphia. Joseph Nathan left the U.K. to seek new business opportunities and in 1873 established a general trading company in Wellington, New Zealand—Joseph Nathan and Co., the foundation for the Glaxo company. In 1919, Mahlon Kline began the novel practice of sending pharmaceutical samples through the mail to doctors across the U.S.

The 1980s witnessed important developments in business unit expansions and scientific discovery for the pre-merged GlaxoWellcome and SmithKline groups. After SmithKline conducted a series of key strategic acquisitions in 1989, the company merged with the Beecham Group to form SmithKline Beecham. That same decade, researchers at Wellcome-related laboratories earned Nobel prizes for discoveries involving “prostaglandins and related biologically active substances” and “important principles for drug treatment.”


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Combining various strands of an Anglo-American corporate heritage, the company in its current form was created in 2000 with the merger of GlaxoWellcome and SmithKline Beecham. Company figures indicate that every second “more than 35 doses of vaccines are distributed by GSK,” while every minute “more than 1,100 prescriptions are written for GSK products,” whereas every hour the company spends more than “$450,000 to find new medicines.”

GlaxoSmithKline occupies an estimated 7 percent of the world’s pharmaceutical market. Its pharmaceutical products are oriented toward treatment against infections and toward aiding the central nervous system, respiratory system, and gastro-intestinal and metabolic processes. GSK also leads in the area of vaccines and has an expanding portfolio of oncology products. Within its R&D operations today, GSK employs some 16,000 people in 24 research sites around the world and has developed more than 800 early discovery research collaborations with academic institutions. Its research activities in the U.S. center around three GlaxoSmithKline laboratories in Pennsylvania and one in Research Triangle Park, North Carolina. The company’s largest-selling product, Seretide/Advair, an inhaler that treats asthma and chronic obstructive pulmonary disease, accounts for over 10 percent of GSK’s total annual sales and is one of the 10 most commonly prescribed pharmaceutical products in the world.

Sources: www.gsk.com/index.htm; www.gsk.com/financialreports.htm; Nobel Foundation; About GlaxoSmithKline. 2004. “Our Heritage”; www.gsk.com/about/background.htm; www.gsk.com/about/keyfacts.htm.

Firms in mature regions have retained much of the high-end manufacturing, especially advanced and pilot manufacturing. Pilot manufacturing, where drugs are produced in relatively large batches for the first time, is particularly significant in biotechnology since the newer, biotech-based drugs are increasingly complex, difficult to produce and require a set of highly skilled scientific and production workers.106

CompetitivenessDespite great complexity, financial fragility, lengthy and expensive regulatory approval processes, public concern and business development hurdles, the development, adoption, re-investment, sales and exports of biopharmaceutical products and services are critical to national economic competitiveness. The value of medicinal and pharmaceutical product exports from the U.S. exceeded $16 billion in 2002.107 Biopharmaceutical exports increased almost four and a half times from $3.7 billion in 1989 to approximately $16.2 billion in 2002.108

The first table below shows that Europe was the destination for more than half of the biotechnology-related exports in 2001, accounting for approximately $4.5 billion in revenue. Exports to the Asia/Pacific region totaled $1.9 billion. The leading export markets in terms of individual countries were Japan, Germany and Britain. These figures largely parallel the export pattern of the larger pharmaceutical and medicinal applications (including drugs, biologics in vivo and in vitro diagnostics) as shown in the second table below.


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Location $ Billions % of Biotech ExportsEurope 4.5 55.8Asia/Pacific 1.9 24.1Latin America 0.7 8.7Canada 0.6 7.4Rest of the World 0.2 3.0Company Omissions 0.1 1.0Total $8.0 100.0

Location $ Billions % of ExportsEurope 10.2 60.2Asia/Pacific 2.5 16.2Latin America 1.5 8.3Canada 2.2 12.3Rest of the World 1.7 3.0Total U.S Exports $18.1 100.0

U.S. Biotech Export Revenues by Geographic Region 2001

Source: Dept. of Commerce 2003 A Survey of the Use of Biotechnology

Source: Dept. of Commerce 2003 A Survey of the Use of Biotechnology in US Industry.

in US Industry.

U.S. Exports of Pharmaceutical and MedicinesNAICS 3254

The annual cost of food-borne illness in the United States is estimated to be between $7.7 and $23 billion annually.1090. The Centers for Disease Control and Prevention (CDC) have estimated that food borne diseases cause about 76 million illnesses, 325,000 hospitalizations and 5,000 deaths annually in the U.S.110 Biopharmaceutical innovations have resulted in dramatic changes in the ability to treat disease and improve quality of life.

Many chronic illnesses that affect America’s working population cause losses in productivity.111 Research shows that irritable bowel syndrome (IBS) is the second most common reason for absenteeism at work, after the common cold.112 Biopharmaceuticals can reduce worker-productivity losses due to illness. Typical disorders for which employees use medication to reduce work loss are: upper respiratory infections, particularly influenza, asthma, allergic disorders, depression, diabetes, dysmenorrhea and migraine headaches. Influenza vaccination, treatment of migraines with triptans and treatment of allergic rhinitis with nonsedating antihistamines in particular, represent significant contributions to human health and worker productivity in the U.S.113 University of Chicago researchers Kevin Murphy and Robert Topel showed that a permanent 10 percent decrease in major causes of death could add trillions of dollars to the U.S. economy.114

Further study into strengthening the competitiveness of the biopharmaceutical industry in the U.S. and a process of monitoring the attractiveness of America as a location for this industry could be extremely beneficial as part of a longer-term strategy to promote and support the industry’s sustainability and growth in this country.115


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References

Endnotes1 The Location Quotient (LQ) equals percent employment in the metro divided by percent employment in the U.S. If LQ>1.0, the industry is more concentrated in the metro area than in the U.S. average. 2 DeVol, Ross C. and Rob Koepp. 2003. The Economic Contributions of Health Care to New England, Santa Monica, CA: Milken Institute.3 CURE. 2004. 9th Annual Economic Report on Connecticut’s Bioscience Industry, New Haven,CT:CURE.4 Abromaitis, James F. 2002. Connecticut’s Office of BioScience Makes Debut at Largest International Biotech Trade Show. Department of Economic and Community Development.5 DeVol, Ross C. and Rob Koepp. 2003. The Economic Contributions of Health Care to New England, Santa Monica, CA: Milken Institute.6 www.biodesign.com7 In April 2004, the Aventis Supervisory Board recommended its shareholders approve an offer from Sanofi-Synthélabo in order to create Sanofi-Aventis. The most recent information at the time of this writing is, from Bloomberg, “The SANOFI-AVENTIS GROUP is the world’s 3rd largest pharmaceutical company, ranking number 1 in Europe…In connection with its acquisition of Aventis, Sanofi-Aventis has announced that it is studying the feasibility of merging Aventis with and into Sanofi-Aventis with Sanofi-Aventis continuing as the surviving corporation.” 8 Center for Biotechnology. 2003. The Empire State Development-Industry Cluster Reports. Biotechnology and Pharmaceuticals. http://www.biotech.sunysb.edu/industDev/index.html.9 New England Healthcare Institute, 2003. On the Critical List: Health Care Job Vitality in New England, Boston, MA: New England Healthcare Institute. 10 U.S. Department of Commerce Technology Administration, Bureau of Industry and Security. 2003. A Survey of the Use of Biotechnology in U.S. Industry. http://www.technology.gov/reports/Biotechnology/CD120a_0310.pdf11 Feldman, Maryann, P., Johanna L. Francis. Forthcoming in European Planning Studies. Fortune Favors the Prepared Region: The Case of Entrepreneurship and the Capitol Region Biotechnology Cluster. http://www.rotman.utoronto.ca/feldman/papers/MDBiotechCluster2.0.pdf12 According to the BLS (quarterly census of employment and wages), Delaware employed 3,774 workers in the Pharmaceutical and Medicine manufacturing industry (NAICS-3254), in 2002. The more recent 2003 employment figure for Delaware’s NAICS-3254 reports only 823 workers as a preliminary estimate. The 2002 number is an outlier stemming from an improper coding when the government moved from SIC to NAICS code reporting. According to www.delawareonline.com, AstraZeneca Pharmaceuticals, a leading employer in the state, employed approximately 3,100 and 4,000 workers in the state, in 2002 and 2003, respectively. The Delaware Department of Labor notes that much of AstraZeneca’s employment is reported in NAICS 551114, Management of Companies, and the rest as NAICS 424210, Drug Wholesalers. This industry coding problem may explain the low reported wages per employee in NAICS 3254. 13 Feldman, Maryann, P. 2003. The Locational Dynamics of the U.S. Biotech Industry: Knowledge Externalities and the Anchor Hypothesis. Rotman School of Management. University of Toronto.http://www.rotman.utoronto.ca/feldman/papers/Feldmanpercent20-Druidpercent20_percent20I&Ipercent20percent20paper.pdf.14 FacilityCity. 2002. The Pharmaceutical Industry. The future of this innovative economic powerhouse promises new cures, and more growth across the U.S. http://www.facilitycity.com/busfac/bf_02_11_special2.asp15 Gollaher, David L., Tracy Lefteroff. 2002. Biomedicine: The New Pillar in Northern California’s Economy. 2002 Report on Northern California’s Biomedical R&D Industry. The California Healthcare Institute; PriceWaterHouseCoopers.http://www.pwcglobal.com/technology/lifesciences/CApercent20Biomedpercent20R&Dpercent20Surveypercent202002_NORTHERNpercent20CAL.pdf16 Feldman, M., and Y. Schreuder, 1996. “Initial Advantage: The Origins of the Geographic Concentration of the Pharmaceutical Industry in the Mid-Atlantic Region.” Industry and Corporate Change. 5.17 Stokes, D., 1997. Pasteur’s Quadrant: Basic Science and Technological Innovation. Washington: Brookings Institution Press.18 M. G. Fári, R. Bud, P. U. Kralovánszky. 2001. “The History of the Term Biotechnology: Károly Ereky and His Contribution,” presentation at the Fourth Congress of Redbio – Encuentro Latinoamericano de Biotecnologia Vegetal, Goiânia, Brazil, June 4-8.19 DeVol, Ross C., Perry Wong, Junghoon Ki, Armen Bedroussian and Rob Koepp. 2004. America’s Biotech and Life Science Clusters – San Diego’s Position and Economic Contributions, Santa Monica: Milken Institute.

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20 http://www.public.deloitte.com/fast500/21 DeVol, Ross C., Rob Koepp, Junghoon Ki and Frank Fogelbach. 2004. California’s Position in Technology and Science – A Comparative Benchmarking Assessment, Santa Monica: Milken Institute.22 DiLorenzo, F. 2002. Industry Survey: Biotechnology, New York, NY: Standard & Poor’s. 23 Lowenbach, J. 2002. Will Chief Risk Officers Find Opportunity in a Reinvigorated European Research & Development Sector? Contract Services, Pharmaceutical Technology.24 DeVol, R., Rob Koepp, Junghoon Ki and Frank Fogelbach. 2004. California’s Position in Technology, and Science. Santa Monica: Milken Institute.25 The National Science Foundation’s (NSF) industrial R&D data were used because they are the only source of R&D spending on a state-by-state basis. According to an annual survey conducted by PhRMA, PhRMA’s member companies invested, in 2003, an estimated $27.4 billion on pharmaceutical R&D in the United States. This survey of member organizations includes R&D activities in pharmaceuticals and closely-related areas. The NSF reports a number of $15.6 billion in total funds invested, in 2003, by the biopharmaceutical industry, as represented by NAICS code 3254 and NAICS code 5417102. Pharmaceutical R&D is conducted in firms who may be classified under a different primary NAICS code and thus not included in the 3254 and 5417102 coding. Developing quality control and routine product testing is excluded from NSF’s definition (and included in PhRMA’s definition) and are an important part of the process of innovation. Due to these differing methodologies and definitions, the NSF and PhRMA figures are therefore not necessarily inconsistent. See: Pharmaceutical Research and Manufacturers of America (PhRMA). 2004. Pharmaceutical Industry Profile: Focus on Innovation, New Medicines, New Hope.26 Mansfield, Elaine. 2003. Emerging U.S. Biopharmaceutical Companies: New Drug R&D and Investment/Partnership Opportunities, Multimedia Research Group, Inc.27 National Science Foundation, 2004. NSF Creation and Mission, http://www.nsf.gov/home/about/creation.htm, Washington, D.C.: National Science Foundation.28 DeVol, Ross C., Rob Koepp, Junghoon Ki and Frank Fogelbach. 2004. California’s Position in Technology and Science – A Comparative Benchmarking Assessment, Santa Monica: Milken Institute.29 Comarow, A. 2003. “Best Hospitals 2004,” U.S. News & World Report.30 Morse, R.J. and Samuel Flanigan. 2004. “Best Graduate Schools,” U.S. News & World Report.31 Mass Development and Massachusetts Alliance for Economic Development. 2002. Biopharmaceuticals in Massachusetts. Boston: MassDevelopment and Massachusetts Alliance for Economic Development. 32 DeVol, Ross C., Rob Koepp, Junghoon Ki and Frank Fogelbach. 2004. California’s Position in Technology and Science – A Comparative Benchmarking Assessment, Santa Monica: Milken Institute.33 Ibid.34 DeVol, Ross C., Perry Wong, Junghoon Ki, Armen Bedroussian and Rob Koepp. 2004. America’s Biotech and Life Science Clusters – San Diego’s Position and Economic Contributions, Santa Monica: Milken Institute.35 Battelle Technology Partnership Practice. 2004. Laboratories of Innovation: State Bioscience Initiatives 2004, Cleveland: Battelle Memorial Institute.36 DeVol, Ross C., Perry Wong, Junghoon Ki, Armen Bedroussian and Rob Koepp. 2004. America’s Biotech and Life Science Clusters – San Diego’s Position and Economic Contributions, Santa Monica: Milken Institute.37 Ibid. 38 We have drawn upon some earlier descriptive economic research contained in the Milken Institute Arkansas report to assist our descriptive understanding of the biopharmaceutical industry’s “Innovation Pipeline Index.”39 Milken, Michael. 1994. “Fueling America’s Growth, Education, Entrepreneurship and Access to Credit,” Milken Institute Monograph, 13.40 DeVol, Ross C. 2001. “The New Economics of Place,” Milken Institute Review, First Quarter, 88-93.41 Bureau of Labor Statistics, U.S. Department of Labor, Career Guide to Industries, 2004-05 Edition, Pharmaceutical and Medicine Manufacturing, on the Internet at http://www.bls.gov/oco/cg/cgs009.htmp. 42 U.S. Department of Labor, Bureau of Labor Statistics. 2004. “Pharmaceutical and Medicine Manufacturing.” www.bls.gov/oco/cg/cgs009.htm, p. 69.43 Reflects NAICS 3254 data.44 Dean Gail Naughton, San Diego State U. Interview with Rob Koepp, Milken Institute, May 3, 2004. 45 Ibid. 46 Bureau of Labor Statistics, U.S. Department of Labor, Career Guide to Industries, 2004-05 Edition, Pharmaceutical and Medicine Manufacturing, on the Internet at http://www.bls.gov/oco/cg/cgs009.htm, p. 2 specific to Biological Scientists.47 Bureau of Labor Statistics, U.S. Department of Labor, Career Guide to Industries, 2004-05 Edition, Pharmaceutical and Medicine Manufacturing, on the Internet at http://www.bls.gov/oco/cg/cgs009.htm.

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48 McClellan, Mark B., 2003. “The Food and Drug Administration’s Strategic Action Plan Protecting and Advancing America’s Health: Responding to new challenges and opportunities,” Department of Health and Human Services. http://www.fda.gov/oc/mcclellan/strategic.html. 49 The three-phase clinical trials are defined by the Food and Drug Administration in the Code of Federal Regulations. The trial descriptions used in this research is based largely on: DiMasi, Joseph A. and Ronald W. Hansen, Henry G. Grabowski. 2003. “The price of innovation: new estimates of drug development costs,” in Journal of Health Economics, 22, pp. 151-185, and National Library of Medicine. 2004. “Information on Clinical Trials and Human Research Studies,” ClinicalTrials.gov. http://clinicaltrials.gov/ct/info/whatis. 50 Bootman, J. Lyle, Raymond J. Townsend and William F. McGhan. 1996. “Introduction to Pharmacoeconomics,” Principles of Pharmacoeconomics, 2nd Edition. Cincinnati, Ohio: Harvey Whitney Books Company.51 U.S. Department of Labor, Bureau of Labor Statistics. 2004. “Pharmaceutical and Medicine Manufacturing.” http://www.bls.gov/oco/cg/cgs009.htm, p. 69.52 http://www.centerwatch.com/patient/backgrnd.html.53 http://www.centerwatch.com/pressreleases.html. 54 Center Watch. 2004. “Expanding Opportunities in Central and Eastern Europe” Article 357(11)4, April. http://www.centerwatch.com/bookstore/backissues/vol11iss4.html. 55 Center Watch. 2003. “Challenging the Practice of Competitive Enrollment” Article 341(10)12, December. http://www.centerwatch.com/bookstore/backissues/vol10iss12.html. 56 http://www.allp.com/drug_dev.htm57 Employment, for this innovation output measure, is defined as the total nonfarm employees in each state.58 Lombardi, John V. and Elizabeth D. Capaldi, Kristy R. Reeves, Diane D. Craig, Denise S. Gater and Dominic Rivers. 2003. ‘The Top American Research Universities’ in The Center, and Annual Report from The Lombardo Program on Measuring University Performance, The Center at the University of Florida, November.59 CHI Research, 2004, Tech-Line Background Paper: www.chiresearch.com/about/data/tech/tlbp4.php3. 60 www.economy.com/databuffet/oc_viewData_cht.asp. 61 Deloitte. 2003. Deloitte Technology Fast 500 Annual list of the fastest growing technology companies in North America. www.public.deloitte.com/fast500/fast_500/search/500searchresults.asp?type=f500&subnav=3&subnav2=1. 62 See endnote 12 in Industry Geographic Location and Performance Section.63 Some of the initial history information is drawn from: Wallace, Lorna H. 1998. Foreign Direct Investment Into the State of New Jersey, Rutgers University, New Jersey: UMI.64 Krugman, Paul. 1991. “History and Industry Location: The Case of the Manufacturing Belt,” The American Economic Review, 81, pp. 80-83. 65 Weber, A. 1909/1929. Theory of the Location of Industries, Chicago: The University of Chicago Press.66 Englander, O. 1926. Kritisches and Positives zu Einer Allgemeinen Reinen Legre vom Standort. Zeitschrift fur Volkswirtschaft und Sozialpolitik, Neue Folge (5).67 Ritschl, H. 1927. “Reine und historische Dynamik des Standortes der Erzeugungszweige,” Schmollers Jahrbuch, 51, pp. 813-870. 68 The selection of firms for case-study review was based on sales. Leading biopharmaceutical companies from the annual North America Technology Fast 500, a program managed by Deloitte that ranks the 500 fastest-growing technology companies in the United States and Canada, are detailed. Other examples of important firms are also included. Of the mini case studies, The Milken Institute selected eight companies to analyze more fully.69 Goddeeris, John. 2001. “Health Care,” Adams, Walter and James Brock, eds., The Structure of American Industry, New Jersey: Prentice Hall, p. 255.70 An example is: “A. von Hoffman testified at a patent infringement trial in France in the 1860s while living in England.” used in: Arora, Ashish, Ralth Landau and Nathan Rosenberg. 1999. ”Dynamics of Comparative Advantage in the Chemical Industry,” Mowery, David C. and Richard R. Nelson, eds. Sources of Industrial Leadership, Cambridge, Mass.: Cambridge University Press. 71 Arora, Ashish, Ralth Landau and Nathan Rosenberg. 1999.” Dynamics of Comparative Advantage in the Chemical Industry,” Mowery, David C. and Richard R. Nelson, eds. Sources of Industrial Leadership, Cambridge, Mass.: Cambridge University Press. 72 The following is taken from Wallace, Lorna H. 1998. “Foreign Direct Investment Into the State of New Jersey,” Ph.D. dissertation, New Jersey: Rutgers University Press.Foreign direct investment (FDI) is recognized as a particular form of economic involvement by firms outside their national boundaries. The investment is made outside the home country of the investing company, but inside the investing

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company. Unlike portfolio investment, FDI consists of a ‘package’ of assets, capabilities and intermediate products such as capital, technology, management skills, access to markets and entrepreneurship. The distinction between direct and indirect or portfolio investment is that in the former, resources are transferred internally within the firm rather than externally and financially between two independent parties (Dunning, 1993). Capital is simply a conduit for the transfer of these resources.FDI is an investment involving a long-term relationship and reflects a lasting interest and control implying that the investing entity may exert a significant degree of influence on the management of the enterprise resident in any other economy. It may be undertaken by individuals as well s business entities (UNCTAD, 1995).73 Wilkins, Mira. 1989. The History of Foreign Investment in the United States to 1914, Cambridge, Mass.: Harvard University Press, and Merck Archives. 1992. Merck, Sharp & Dohme: A Brief History, Rahway, New Jersey: Business History Group.74 Pfizer 2003 Annual Review, p. 1.75 Schering-Plough. 1994. The History of Schering-Plough, made available by the Public Relations division of the corporation.76 http://www.wyeth.com/about/history.asp77 http://www.lilly.com/about/history.html78 http://abbott.com/corporate/history.html#188879 R&D Directions.80 Merck archives. 1992. Merck Sharp & Dohme: A Brief History, Rahway, New Jersey: Business History Group.81 Merck archives. 1992. Merck Sharp & Dohme: A Brief History, Rahway, New Jersey: Business History Group, http://www.merck.com/ and http://phx.corporate-ir.net/phoenix.zhtml?c=73184&p=irol-reportsannual82 Peyer, Hans Conrad. 1996. Roche: A Company History 1896-1996, Basel, Switzerland: Editiones Roche.83 Arora, Ashish, Ralth Landau and Nathan Rosenberg. 1999. “Dynamics of Comparative Advantage in the Chemical Industry,” Mowery, David C. and Richard R. Nelson, eds. Sources of Industrial Leadership, Cambridge, Mass.: Cambridge University Press.84 Mowery, David C. and Richard R. Nelson. 1999. “Introduction,” Sources of Industrial Leadership: Studies of Seven Industries, Mowery and Nelson, eds., Cambridge, England: Cambridge University Press, pp.1-18.85 http://www.baxter.com/about_baxter/company_profile/sub/history.html86 Arora, Ashish, Ralth Landau and Nathan Rosenberg. 1999. “Dynamics of Comparative Advantage in the Chemical Industry,” Mowery, David C. and Richard R. Nelson, eds. Sources of Industrial Leadership, Cambridge, Mass.: Cambridge University Press.87 Wilkins, Mira. 1996. The Economic Relations of Switzerland with the United States, Great Britain, Germany, and France 1914-1945, Sebastien Guex.88 http://www.allergan.com/site/about/history.asp?id=&largeText=89 http://www.frx.com/about/index.html90 Feldman, Maryann. 2003. “The Locational Dynamics of the U.S. Biotech Industry: Knowledge Externalities and the Anchor Hypothesis,” Working Paper, University of Toronto, Rotman School of Management. 91 Peyer, Hans Conrad. 1996. Roche: A Company History 1896-1996, Basel, Switzerland: Editiones Roche.92 http://www.gene.com/gene/about/93 About Us. 2004. Backgrounder, Company Profile. www.amgen.com/corporate/AboutAmgen/backrrounder.html94 http://www.centocor.com/cgi-bin/site/about/whoweare_timeline.cgi#top95 http://www.chiron.com/aboutus/history/index.html96 www.cephalon.com97 http://mlnm.com98 Deloitte Technolgoy Fast 500 Companies, 2003. www.public.deloitte.com/fast500/fast_500/Survey/2004/04CEO%20Survey.pdf99http://www.aventis.com/main/page.asp?pageid=6332214902514456564&folderid=70644420813501385674&lang=en100 http://www.novartis.com/about_novartis/en/1company.shtml101 U.S. Department of Commerce 2003. A Survey of the Use of Biotechnology in U.S. Industry, Technology Administration Bureau of Industry and Security, October.102 Dunning, John H. 1995. ”Think Again Professor Krugman: Competitiveness Does Matter,” The International Executive, 37(4)(July/August), pp. 315-324.103 Hayes, R., G. Pisano and D. Upton. 1996. “Eli Lilly & Company, Manufacturing Process Technology Strategy,” Strategic Operations, Competing Through Capabilities, New York: The Free Press.

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104 Ian Hau, VP of Cross Functional Design, GSK, Interview, June 17, 2004.105 http://www.gsk.com/index.htm, http://www.gsk.com/financial/financialreports.htm, Nobel Foundation ,SG Cowen and About GlaxoSmithKline. 2004. “Our Heritage”. www.gsk.com/about/background.htm106 Pisano, G. 1997. The Development Factory: Unlocking the Potential of Process Innovation, Boston: Harvard Business School Press, Lee, K. and S. Burrill. 1995. Biotech 96 Pursuing Sustainability: The Tenth Industry Annual Report, Ernst & Young, Palo Alto and Gray, M. and E. Parker. 1998. “Industrial Change and Regional Development: The Case of the US Biotechnology and Pharmaceutical Industries,” WP 95, ESRC Centre For Business Research, England: University of Cambridge.107 Unfortunately, available export data does not exactly match our selected NAICS 3254 and 5417102. Rather SITC: F.A.S. value-Medicinal and pharmaceutical products data is used. And, no state-level export data at this level of detail is available. The export statistics reported in this study are based on the best available data which accurately reflect overall U.S. trends in this competitiveness measure.108 Bureau of the Census: HS-Based Schedule B, Annual Historical U.S. Domestic Trade Data.109 U.S. Food and Drug Administration, Dept. of Health and Human Services. 2003. The Food and Drug Administration’s Strategic Action Plan Protecting and Advancing America’s Health: Responding to New Challenges and Opportunities, August. www.fda.gov/oc/mcclellan/strategic.html. 110 U.S. Food and Drug Administration, Dept. of Health and Human Services. 2003. The Food and Drug Administration’s Strategic Action Plan Protecting and Advancing America’s Health: Responding to New Challenges and Opportunities, August. www.fda.gov/oc/mcclellan/strategic.html. 111An interesting resource for additional information is: IHPM the Institute for Health and Productivity Management at www.ihpm.org. IHPM was created in 1997 to address issues of employee health, corporate success and workplace performance. 112 www.novartis.com/about_novartis/en/businesses_pharma.shtml. 113 Burton, Wayne N., Alan Morrison and Albert I. Wertheimer. 2003. “Pharmaceuticals and Worker Productivity Loss: A Critical Review of the Literature,” Journal of Occupational and Environmental Medicine, 45(6):610-621.114 Murphy, Kevin M. and Robert Topel. 2000. “Medical Research What’s It Worth?” Merger Mania, The Milken Institute Review, First Quarter. Santa Monica: CA. DeVol, Ross. 2000. “Biotech & Bioscience: The 21st Century Cluster Race,” Zone News, January.115 Association of the British Pharmaceutical Industry. 2003. “Pharmaceutical Industry Competitiveness Task Force Report: Competitiveness and Performance Indicators,” Department of Health www.advisorybodies.doh.gov.uk/pictf and the Association of the British Pharmaceutical Industry: www.abpi.org.uk.

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About the Authors

Ross C. DeVol is Director of Regional Economics at the Milken Institute. He oversees the Institute’s research on the dynamics of comparative regional growth performance, and technology and its impact on regional and national economies. DeVol is an expert on the intangible economy and how regions can prepare themselves to compete in it. He authored the ground-breaking study, America’s High-Tech Economy: Growth, Development, and Risks for Metropolitan Areas, an examination of how clusters of high-technology industries across the country affect economic growth in those regions. He also created the Best Performing Cities Index, an annual ranking of U.S. metropolitan areas that shows where jobs are being created and economies are growing. Prior to joining the Institute, DeVol was senior vice president of Global Insight, Inc. (formerly Wharton Econometric Forecasting), where he supervised their Regional Economic Services group. DeVol supervised the respecification of Global Insight’s regional econometric models and played an instrumental role on similar work on its U.S. Macro Model originally developed by Nobel Laureate Lawrence Klein. DeVol earned his M.A. in economics at Ohio University.

Perry Wong is a Senior Research Economist in Regional Economics at the Milken Institute. He is an expert on regional economics, development and econometric forecasting and specializes in analyzing the structure, industry mix, development and public policies of a regional economy. He designs, manages and performs research on labor and workforce issues, the relationship between technology and economic development, and trade and industry, with a focus on policy development and implementation of economic policy in both leading and disadvantaged regions. Wong is actively involved in projects aimed at increasing access to technology and regional economic development in California and the American Midwest. His work extends to the international arena, where he is involved in regional economic development in southern China, Taiwan and other parts of Asia. Prior to joining the Institute, Wong was a senior economist and director of regional forecasting at Global Insight, Inc. (formerly Wharton Econometric Forecasting) where he managed regional quarterly state and metropolitan area forecasts and provided consultation. Wong earned his master’s degree in economics at Temple University in 1990 and completed all course requirements for his Ph.D.

Armen Bedroussian is a Senior Research Analyst in Regional Economics at the Milken Institute. Bedroussian has extensive graduate training in econometrics, statistical methods and other modeling techniques. Before joining the Institute he was an economics teaching assistant at U.C. Riverside where he taught intermediate micro and macro economics to undergraduates. Since coming to the Institute, Bedroussian has contributed in several projects including Butler County’s Economic Impact Assessment, The Impact of an Entertainment Industry Strike on the Los Angeles Economy and Los Angeles Mayor’s Task Force Study on the Assessment of Post Sept.11 Economic Conditions. He also co-authored Manufacturing Matters: California’s Performance and Prospects and The Economic Contributions of Health Care to New England. Bedroussian earned his bachelor of science in applied mathematics and a master’s in economics at the University of California, Riverside.

About the Authors

212

Lorna Wallace is a Project Consultant in Regional Economics at the Milken Institute, where she co-authored Arkansas’ Position in the Knowledge-based Economy. Her expertise is in foreign direct investment—location determinants, impacts, sources, mergers and acquisitions, strategy, public policy, competitive advantage and FDI stock. Wallace has extensive work experience around the world in both the public and private sectors; her award-winning research is widely published. Wallace was educated in Canada (B. Admin.) and obtained her MBA and Ph.D. in International Business at Rutgers University, New Jersey.

Junghoon Ki is a Research Analyst in Regional Economics at the Milken Institute. His research interests embrace history of technology, human capital development, location of high-tech business, entrepreneurship strategy, and other urban planning related issues, especially from the planner’s perspective and with spatial context. He is responsible for capturing, analyzing, interpreting and visualizing regional economic data in order to create reasonable policy implications for the public. He wrote “The Role of Two Agglomeration Economies in the Production of Innovation: A Comparison between Localization Economies and Urbanization Economies,” Enterprise and Innovation Management Studies, 2001. His recent publications at the Milken include Nebraska’s Position in Science and Technology, California’s Position in Science and Technology, State Technology and Science Index, and America’s Biotech and Life Science Clusters. Ki was awarded a doctoral dissertation grant from National Science Foundation and earned his Ph.D. at the University of Southern California.

Daniela Murphy is a Senior Research Analyst in Regional Economics at the Milken Institute. Her research interests center on regional economic development, information technology, and technology and its impact on regional and national economies. Before joining the Institute, Murphy worked for Bank of America in the real estate department where she did research on market development and the economic conditions shaping California’s real estate market. Her doctoral dissertation emphasized the tasks and organization of the former East German Secret Service and its influence on the economy in Germany. She then worked for the German Government on the Enquete-Commission doing research on international security, political stability and economic growth, predominantly in Eastern Europe. Murphy earned her MBA and Ph.D. at University of Lueneburg in Germany.

Rob Koepp is a Research Fellow in Regional Economics at the Milken Institute. His research interests center on the topics of innovation, entrepreneurship and regional economic development, especially in the context of global technology businesses. His recent work at the Institute includes contributions to Manufacturing Matters: California’s Performance and Prospects and the State Technology and Science Index: Comparing and Contrasting California. Koepp is also author of the book Clusters of Creativity: Enduring Lessons on Innovation and Entrepreneurship from Silicon Valley and Europe’s Silicon Fen (John Wiley & Sons, 2002). Fluent in Japanese and Chinese, Koepp served in various senior positions with Western and Japanese technology firms before joining the Institute. Koepp earned his BA in Asian Studies at Pomona College and his MBA with an emphasis in venture capital financing at Cambridge University.

About the Authors

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Biopharmaceutical Industry Contributions to State and U.S ... · The South Atlantic States are capturing an increasing proportion of the nation’s biopharmaceutical jobs. Overall,