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Coopers & Lybrand Finds Strong Pharma and Medical Device Presence Bolsters New Jersey’s Economy

New Brunswick, NJ, December 11, 1997 — New Jersey’s pharmaceutical and medical technology industry continued to expand in the state through its commitment of $1 billion in capital expenditures for 1998.  That capital investment, targeted primarily to research and development expansion, is expected to produce an increase in the number of pharmaceutical and medical technology employees located here in New Jersey, which is now estimated at more than 60,000 people.

This data is the result of a study conducted by PricewaterhouseCoopers during 1997, which was commissioned by the HealthCare Institute of New Jersey.  

“This report highlights the continued success of New Jersey-based companies that receive FDA approval of drugs,” said HealthCare Institute of New Jersey President William H. Tremayne.  “In 1997, 14 of 38 drugs, or 37 percent, were credited to companies in the Garden State.  In addition, 9 percent of current medical device applications before the FDA come from New Jersey companies.”

“The companies here in New Jersey continue to expand their research and development facilities, which reinforces this state’s claim as ‘the medicine chest of the world,’” Tremayne added.  “As TIME magazine recently pointed out in a feature issue on medicine, the next century will be the biotech century, and New Jersey can be proud that many of its pharmaceutical companies and their employees will be significant participants in the unfolding of this field of discovery.”

Some of the highlights of the research and development capital commitment are:

• Bristol-Myers Squibb’s acquisition of the former Mobil Oil research facility in Hopewell Township for expansion;

• Merck’s new R&D facility of 322,000 square feet now under construction in Rahway, to be opened in 2000;

• The completion of Hoechst Marion Roussel’s Global Development Center in Bridgewater;

• The completion of new facilities for Knoll Pharmaceutical Company in Mount Olive;

• Hoffmann-La Roche’s recently completed major research facility in Nutley;

• Expansion of Schering-Plough’s one-million-square-foot R&D center in Kenilworth, which opened in 1993.

Joseph D. Palo, partner of PricewaterhouseCoopers who oversaw the initial research in 1997 and this update for 1998, said, “The impact of this industry on the state’s economy remains consistently strong.  This comprehensive review of the industry demonstrates the broad impact one industry can have on the state.”

With the relocation of Pharmacia & Upjohn’s corporate offices from London to New Jersey, the industry continues to extend its wide geographic reach throughout the state.  Pharmacia & Upjohn expects to have 1,000 employees in New Jersey in 1999.  

Presently in 16 of the 21 New Jersey counties, the industry’s more than 60,000 employees operate out of more than 120 facilities in over 70 different municipalities.

The 19 member companies of the Institute have an overall $8.5 billion economic impact on the state, of which $3.5 billion is for wages and salaries.  

Broadly, the study shows that:

• In 1996 the Institute’s members produced about 43 percent of all ethical pharmaceuticals sold in the United States, totaling more than $34 billion;

• Total U.S. sales of the Institute’s medical technology members exceeded $4.4 billion, representing 8 percent of the total U.S. medical technology sales in 1997;

• The industry had a high positive influence on the state’s economy, including the approximately $1.4 billion paid to New Jersey manufacturing vendors, suppliers and service providers in 1996;

• It is the cornerstone of the state’s global reputation and standing as a leader in pharmaceutical research and medical technology product development, as exemplified by the fact that in 1996 nearly 35 percent of all patents issued to New Jersey recipients were awarded to the Institute’s member companies;

• Similarly, New Jersey-based pharmaceutical companies received one-third of all FDA approvals of new drugs over the past five years;

• The industry is a committed and conscious supporter of civic, charitable and educational causes, with over $40 million in contributions to non-profit organizations and charities in New Jersey in 1996.

The study also validates New Jersey’s reputation as the premier decision-making center in the worldwide pharmaceutical and medical technology sector.  Eleven of the Institute’s 19 members directed both worldwide and U.S. business functions from locations in New Jersey in 1998, and the other eight member companies are European and Asian companies whose U.S. operations are directed from New Jersey.

HealthCare Institute of New Jersey member companies include:  American Home Products Corp.; Becton Dickinson and Company; Bracco Diagnostics Inc.; Bristol-Myers Squibb Co.; C. R. Bard, Inc.; Eisai Inc.; Hoechst Marion Roussel; Hoffmann-La Roche Inc.; Johnson & Johnson; Knoll Pharmaceutical Co.; Merck & Co., Inc.; Novartis Pharmaceuticals Corp.; Novo Nordisk Pharmaceuticals, Inc.; Nycomed Amersham Imaging; Pfizer Inc; Pharmacia & Upjohn; Roberts Pharmaceutical Corporation; Schering-Plough Corporation; and Warner-Lambert Co.

The PricewaterhouseCoopers 1998 findings draw upon 1996 and 1997 survey information gathered from Institute members, as well as data available from public sources.

The following are some examples which illustrate the industry’s positive influence on the state’s economic climate:

Employment

• New Jersey is a leading state in pharmaceutical, medical technology and health care product employment, with more than 60,000 employees active throughout the state.

• Of the member company employees in New Jersey, more than half are women and more than a fifth from minority communities.

• Member companies paid an average base salary of $61,400 to New Jersey employees in 1997, in contrast with the state’s overall average annual salary of $41,000.  This is indicative of the high percentage of Institute member employees with advanced degrees and special skills.

• Institute members provide career opportunities for New Jersey residents with diverse professional qualifications and backgrounds, with full-time employees specializing in basic research, product development, clinical development, corporate administration, manufacturing sales and marketing.

Economic Activity & Spin-Off Effect

• Worldwide sales of Institute members reached approximately $119 billion in 1997, approximately 40 percent of the worldwide healthcare products market of $296 billion.

• Net sales of U.S. healthcare products for Institute members were approximately $73 billion in 1997, an increase of 9 percent over 1996 for those members of the Institute that participated in both surveys.

• Institute members contributed over $8.5 billion to the New Jersey economy in 1997, an amount equal to almost half of the state’s 1999 budget of $17 billion.

• Total payroll of Institute members was approximately $3.5 billion in 1997, an increase of approximately 9 percent over 1996.

• Institute members reported spending approximately $861 million in capital expenditures in New Jersey in 1997, an increase of approximately 15 percent over 1996.  

• Institute members anticipated spending more than $1 billion in 1998, an increase of 16 percent over 1997.

• Pharmaceutical and medical technology firms maintain more than 120 facilities in New Jersey, covering over 70 municipalities, and 16 of the state’s 21 counties.

• Institute members contribute to the state’s economy through property ownership and leases as well.  Member companies occupy land and buildings covering over 84,000 acres with an assessed tax base of more than $2.6 billion.

• Institute members spend approximately $330 million annually in rentals, leasing and utility costs.

Research & Development Institute Pharmaceutical Members

• The research-based pharmaceutical industry invested more than $20 billion, in excess of 20 percent of its sales, in research and development in 1997, which is three to five times greater than R&D to sales ratios in other technology-intensive industries.

• Institute members spent approximately $8.3 billion in research and development expenditures in the United States in 1997, representing an increase of 32 percent over last year’s figures.

• Institute members spent approximately $15.8 billion on worldwide research and development in 1997.

• Institute members reported that the majority of research and development advances in 1997 targeted conditions including cancer, diabetes, HIV/AIDS, hepatitis and cardiovascular diseases.  

Institute Medical Technology (MT) Members

• Institute MT members spent approximately $235 million in medical technology research and development in the U.S. in 1997, representing 6 percent of the $3.9 billion industry total.

• Institute MT members anticipated spending approximately $297 million in medical technology research and development in the U.S. in 1998, an increase of 26 percent over 1997.

• Institute MT members spent approximately $436 million on worldwide medical technology research and development in 1997 and anticipated spending approximately $515 million in 1998, an increase of 18 percent.

• Institute MT members invested 8 percent of sales in research and development initiatives in 1997, while the industry average reported by the Health Industry Manufacturers Association was 6.8 percent.

• Institute MT members have developed numerous innovative products throughout their history in New Jersey, receiving over 1600 patents since 1986, more than 160 of which were granted in 1997.

• Institute MT members have investigated approximately 110 products in various stages of the PMA/510K approval process in 1997, which represents approximately 9 percent of the industry total as reported by the FDA.

Civic, Educational & Charitable Responsibilities

• Institute members contributed over $118 million to company-sponsored indigent drug programs in New Jersey in 1996.

• Institute members conduct and sponsor educational opportunities for over 300,000 U.S. health professionals in the Unites States including doctors, nurses, pharmacists and others critical to the delivery of the industry’s products to patients.  Grants and support for such opportunities in 1996 were valued at approximately $65 million, with $55 million going to accredited institutions.

• Institute members and their employees contributed over $40 million in 1996 to charitable endeavors and non-profit organizations throughout New Jersey.  The HealthCare Institute of New Jersey promotes public awareness of the state’s research-based pharmaceutical and medical technology industry.

Today, the HealthCare Institute of New Jersey includes 19 worldwide pharmaceutical and medical technology companies with headquarters in New Jersey.

 

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