NJ’s Pharmaceutical & Medical Technology Industry Report Finds Healthy Drug, Device Pipeline
R&D spending of $4.7 billion
Payroll Impacts of over $6.6 billion
Average base salary is $110,017
Capital Construction Projects of $1.35 billion
Industry produced 151,000 jobs –60,000 direct + 91, 000 spin-off jobs
Charitable Contributions totaled $133 million
$617.6 M in sales tax and income tax impacts on NJ
Overall Economic Impact of $22 billion
Hillside, NJ June 9, 2005 — New Jersey’s pharmaceutical and medical technology industry continues to be a key driver of the state’s research and development community, contributing $4.7 billion to R&D activity in 2004, according to a study released today by the HealthCare Institute of New Jersey (HINJ), the industry’s trade association. The study commissioned by HINJ and conducted by Deloitte, surveyed 23 HINJ member companies on a variety of key economic indicators.
“We’ve always known that our industry is singularly responsible for the moniker ‘Medicine Chest of the World,’ due to its unsurpassed investment in research and development here in New Jersey,” said Bob Franks, President of HINJ. “That is largely due to the prime environment the state provides for HINJ member companies to engage in the discovery and production of breakthrough medicines and cutting-edge technologies that improve human health. This year, the importance of our industry is demonstrated not just by the direct employment of workers engaged in R&D, but to the continuing increase in R&D investments in New Jersey.”
“Throughout the industry, the future is primed with promise,” said Edward J. Ludwig, Chairman, President and Chief Executive Officer of BD and the Chairman of HINJ. “Within pharmaceuticals, there are over 900 products in development and over 100 New Drug Applications (NDAs) in submission to the FDA. In medical technology, there are 92 new product applications (PMAs) and 510(k)s on file with the FDA. There are also over 3,300 clinical trials planned or underway, a significant increase over last year.”
This year, the Deloitte study estimated that $120 million of the total HINJ member R&D expenditures were tied to NJ-based strategic alliances — going to institutions and businesses that expand the life sciences agenda and increase the state’s economic growth.
Other findings of the Deloitte report include:
Employment — HINJ member companies remain a dominant employer in the state directly responsible for 60,274 jobs in the pharmaceutical and medical technology industry, despite a 5 percent decrease from last year (63,447). 2004 was characterized by strategic consolidation within the industry, which impacted employment numbers. Moreover, this reflects that the industry is experiencing a period of intensified competition and greater government scrutiny. The industry was also responsible for 91,000 spin-off jobs, signaling the strength of the pharmaceutical and medical technology industry as a significant employer in New Jersey.
Payroll Impacts — The industry was responsible for payroll impacts totaling $6.6 billion dollars, a 10 percent increase over last year. The study also revealed that almost half (46 percent) of HINJ member employment is devoted to the discovery and production of life-saving medicines and medical devices. Equally noteworthy, the study concluded that almost half of the state’s pharmaceutical and medical technology workforce is comprised of women.
Compensation — Reflecting their high-skill and education levels, employees who work in the industry receive top wages and benefits. The average salary for HINJ member employees was $88,090 in 2004, up 3.1 percent from 2003. Members reported that the average total compensation in 2004 (including wages and benefits) averaged $110,017 in 2004, up 13.5 percent from last year. HINJ member payroll has increased despite a slight decline in overall employment. Experts point to changes in employee mix, severance packages and market wage increases as factors.
Capital Projects — Spending on capital projects continues to be a hallmark of HINJ members. In 2004, that position was maintained as capital expenditures totaled $1.35 billion, an increase of 12.5 percent over the previous year. In addition to investments in renovations and maintenance, the industry’s construction of new facilities accounted for 46 percent of all industry construction.
Charitable Contributions — In 2004, HINJ members gave generously to charitable causes. Contributions in 2004 were $132 million for health-related programs, arts, social services, and community activities, as well as educational initiatives. Worldwide giving by HINJ member companies is estimated at roughly $2.2 billion, making HINJ members one of the most generous philanthropic agents in the global arena. Product donations accounted for 64 percent of all giving.
This is the eighth annual study commissioned by HINJ to assess the impact of the industry on New Jersey’s economy. HINJ first commissioned Coopers & Lybrand to conduct an economic impact study in 1997 and has commissioned annual updates since then with PWC, IBM Business Consulting, and for the past two years, Deloitte. Data is collected from HINJ’s 23 members and the study has employed a variety of widely accepted economic multiplier formulas from sources.
Founded in 1997, the HealthCare Institute of New Jersey serves as a unified voice for the state’s research-based pharmaceutical and medical technology industry. Deloitte, one of the nation’s leading professional services firms, provides audit, tax, financial advisory services and consulting through nearly 30,000 people in more than 80 U.S. cities.