New Brunswick, NJ, October 7, 2002 — Decisions made today in New Jersey are shaping the future of human health — both here in the Garden State and around the globe. As a result of the unheralded success in research and innovation, the pharmaceutical and medical technology industry is now poised to conquer some of the most deadly and dreaded diseases known to mankind.
Miraculously, we may finally rid the world of diseases like AIDS, Cancer, and Alzheimer’s. Early indications reveal that industry researchers have experienced great success with dozens of experimental therapies — and the R&D pipeline is primed with opportunity!
Thankfully, we may soon witness a new era in disease management whereby a miracle drug or device replaces invasive, painful and expensive treatments. These harbingers of human health amount to nothing less than a significant paradigm shift in traditional health care.
With these achievements, however, come enormous responsibilities for the industry. The ever-changing landscape of the pharmaceutical and medical technology industry is creating new challenges, as well as new opportunities, as we strive to keep pace with the rapid changes taking place in the life sciences.
One major challenge for our society is how to strike a balance between access and innovation. Recent advances in the sciences — bioengineering, bioinformatics and pharmagenomics — are allowing companies to develop new drugs and devices for the treatment of diseases once thought to be incurable. At the same time, the rising cost of research and development coupled with onerous regulation and competition, are becoming major threats to innovation.
While the entire pharmaceutical and medical technology industry is wrestling with these issues, New Jersey is at the center of the debate. As the worlds “Medicine Chest,” political, scientific and economic decisions formulated in Washington have a greater impact here than in any other part of the nation. Similarly, the ramifications of those decisions are felt more swiftly and severely here given our strong contributions to the state’s economy and quality of life.
We have long believed that New Jersey’s pharmaceutical and medical technology companies are not only driving innovation, but the state’s economy. With the release of our annual economic impact study, new data strongly underscores that belief.
As a result, the HealthCare Institute of New Jersey has been working judiciously to protect New Jersey’s rich heritage in pharmaceutical and medical technology research, while continuing to be good corporate citizens. Here are some key trends and findings from the HealthCare Institute of New Jersey:
Economic Impact
At a time when New Jersey and the nation are suffering from a sluggish economy, HINJ member companies are sustaining our state and the global economy by providing jobs, investing in capital expenditures, and supporting the non-profit community. Member companies of the HealthCare Institute of New Jersey contributed more than $22 billion to the state’s economy in 2002, according to a study commissioned by HINJ and conducted by IBM Business Consulting Services. This year’s report surveyed HINJ’s 20 New Jersey pharmaceutical and medical technology companies.
Specifically, the data showed:
HINJ members employed 69,209 workers, up from 66,000 in 2001. According to the study, research and development accounts for one-quarter of the workforce, with other major employment sectors in the pharmaceutical and medical technology industry being corporate administration and sales and marketing, with 24 percent each. Another 16 percent of the workers are employed in manufacturing and quality control. The remaining eleven percent of the employees were not identified by any particular function.
The skill and education of the workforce is reflected in the wages paid to industry employees in 2002. On average, workers received $80,439 in wages (total compensation was $91,512). That is up from $73,668 in 2001.
The increase in the average wage, coupled with the addition of 2,500 new positions, is also responsible for a total payroll of more than $6.8 billion for all HINJ member companies in 2002 — up almost one billion dollars from 2001.
To plan for those new jobs — in R&D and in other areas — the study showed that HINJ members are making major capital investments in New Jersey. During 2002, more than $2.4 billion was invested by HINJ members in the construction of facilities and other related infrastructure. Renovation of existing facilities accounts for nearly $1 billion of this total, while construction of entirely new facilities totaled more than $1.5 billion.
The study also found that HINJ member companies continue to make substantial contributions to the arts, education and community activities. In addition to more than $45 million contributed to charitable causes, HINJ members also provided more than $42 million in product donations to indigent patients and other humanitarian causes. An additional $6 million was donated to charities aiding the victims of September 11th.
Research and Development
Accompanying this extraordinary economic report, is the news of unprecedented investment in R&D, which will enhance the flow of life-saving and life-enhancing medicines to patients. As the data suggests, New Jersey’s pharmaceutical and medical technology industry continues to be a world-class leader in innovation.
New Jersey’s pharmaceutical and medical technology industry allocates more dollars to research and development than any other industry in the state and accounts for roughly $16 billion dollars of R&D activity annually.
That investment reaps numerous rewards. Last year, New Jersey-based pharmaceutical companies developed more than a third of all the new medicines approved by the U.S. Food and Drug Administration (FDA). Of the 17 new drugs, 7 came from the Garden State. New Jersey companies were also responsible for the development of 2 of the 8 newly-approved biologics.
Upholding a trend in innovation, New Jersey companies surpassed all other states in drug approvals. California was second with 4 approvals.
New Jersey-based companies developed several “first” therapies (medicines that are the first in a new class of drugs) for diseases, and other significant advances in therapies. These include Inspra and Zetia. Inspra is the first agent designed to selectively block aldosterone for the treatment of high blood pressure. Zetia, the first in a class of agents that inhibits the intestinal absorption of cholesterol, is the first breakthrough to treat cholesterol since statins were introduced 15 years ago.
In the medical technology field, HINJ members submitted 26 significant new product applications (known as PMAs) to the FDA. A total of 35 significant improvements to existing medical devices — known as 510 (k)s are also awaiting federal approval.
In addition, the pipeline for new medicines and new devices remains strong. According to the FDA, the number of potential medicines entering clinical trials was 15 percent higher in 2001 (the most recent year on record) than five years ago. There are currently 1, 285 new products in development and 1, 314 clinical trials underway. Similarly, there are 546 medical technology products in development and 1, 738 clinical trials underway.
New Jersey ranks 3rd among the 50 states in terms of new medical device approvals. Beyond these statistics, we need to reassert one compelling point: All of these statistics demonstrate why investment in R&D is so critical.
Future Workforce
As a result of these new drugs and devices, millions of Americans — and people around the world — will be helped. To keep pace with the demand for new therapies and technologies, however, New Jersey’s pharmaceutical and medical technology industry will need highly-skilled workers — trained in the sciences, math and engineering — to bring about the new discoveries.
Although New Jersey is fortunate to have a highly-skilled and highly-educated workforce, the lack of workers trained in the sciences has been and will continue to be an on-going challenge for the industry.
Last fall, the Healthcare Institute of New Jersey released a seminal report that demonstrated the growth of New Jersey’s pharmaceutical and medical technology industry. In short, the study concluded that the industry is growing and will add almost 15,000 new jobs by the end of this decade.
However, the report also cites a growing disparity between the number of new jobs and the number of qualified candidates graduating from New Jersey schools. As a result, the report urges that a concerted effort be made to encourage more students toward math and science disciplines.
“Looking Ahead: A Workforce Supply and Demand Analysis for New Jersey’s Pharmaceutical and Medical Technology Industry,” conducted by the John J. Heldrich Center for Workforce Development, highlighted the emerging and long-term needs of the industry.
Specifically, the study concludes that workforce projections estimate that New Jersey’s pharmaceutical and medical technology industry will expand to more than 80,000 plus employees by 2010. The study presented several key findings:
- Over the next five years, pharmaceutical and medical technology companies expect high growth in basic research, operations, and administration — nearly half of these jobs will require bachelor’s degrees, and 48 percent of job growth will fall in R&D-related fields.
- Of all the jobs requiring advanced degrees by 2007, 70 percent of these will be in science and technical fields.
- New Jersey higher education institutions will not produce enough individuals with advanced science and technical degrees to meet this growing industry demand.
- Nearly half (46 percent) of all New Jersey high school juniors and seniors have taken no math or science honors/AP courses, and more than half (56 percent) of these students say they are not very, or not at all familiar with the types of jobs available in the pharmaceutical and medical devices industries.
- Industry executives express concern that the scarcity of appropriately trained workers will continue to be a problem — and even intensify — unless something is done now to combat the problem.
- Although companies are currently involved in numerous projects to encourage math and science education, it is clear, according to the report, that there are not sufficient numbers of individuals with advanced math and science degrees graduating from New Jersey’s colleges and universities.
Looking Toward the Future
During the past two decades, the world has witnessed unprecedented growth in life-saving drugs and devices. These breakthroughs are largely due to the presence of a major life sciences industry right here in New Jersey. This is an industry that, at its core, has taken stewardship of human health.
We need to boldly address the challenges that confront our industry while at the same time preserving the economic, philanthropic and scientific benefits that it generates. A new era of health care is emerging and New Jersey’s pharmaceutical and medical technology industry is proud to lead the way.