New Report: NJ Life Science Sector Remains Profitable But Job Growth Slows
Collaborative Report from HINJ and Deloitte Affirms Influence of Pharmaceutical, Medical Technology Industry to State Economy; Business Challenges Lie Ahead
Bridgewater, NJ, August 18, 2008 — The life sciences industry in New Jersey demonstrated stable growth in 2007, according to a new research study released today. However, the outlook for future growth for the state′s biopharmaceutical and medical technology companies is being tempered by on-going challenges to the industry′s global business model.
Deloitte LLP conducted the study for the Healthcare Institute of New Jersey (HINJ), a statewide industry association. The study was presented at press conferences today at Alpharma Inc., in Bridgewater and Catalent Pharma Solutions in Moorestown, two of the HINJ member companies that provided data for the annual survey.
Joining HINJ in today′s announcement were distinguished Rutgers Dean James Hughes of the University′s Bloustein School for Planning and Public Policy; Patrick O′Keefe, Director of the Research Division of J.H. Cohn Inc.; executives representing Deloitte; and several local officials and business leaders.
The comprehensive report presents an in-depth portrait of the industry′s socio-economic impact on New Jersey, with data including employment figures, direct payroll, spin-off jobs, expenditures for research and development (R&D), vendor support, state and local tax payments and donations to New Jersey charities.
The industry continues to confront new business challenges around the world, and New Jersey is not immune to their impacts, according to HINJ President Bob Franks.
“This report details the tremendously positive impact that New Jersey′s biopharmaceutical and medical technology community has on our state′s workforce, economy, and non-profit community,” said Mr. Franks. “New Jersey′s policymakers, health care leaders and non-profit and business community all understand the important role that the life science sector plays in our state. Against the backdrop of an ever-changing global business model and the challenges our industry faces, the life sciences industry continues to invest in New Jersey and its people.”
Jeff Mraz, Partner at Deloitte, said the research portrays an industry that is a major economic driver within the state.
“The member companies of the life science industry are creating a strong economic foundation for the state and its residents,” said Mraz. “As a significant sector of the state′s population has increasing needs for healthcare and medical technology, we believe the report underscores that a good business climate is essential life support for the healthcare and medical technology industry.”
A detailed breakdown of the study data reveals key findings and provides an analysis of the changes from last year′s Deloitte report, including:
- HINJ member companies had an estimated $27 billion economic impact on the New Jersey economy in 2007, compared to an estimate of $26 billion in 2006.
- In 2007, HINJ member companies employed 61,347, slightly lower than 61,971 recorded one year earlier. The largest subset of these employees (approximately 25 percent) worked in research and development.
- In 2007, HINJ member jobs accounted for an aggregate payroll of $7.7 billion. New Jersey residents held approximately 85 percent of these jobs.
- The average annual salary of employees in the biopharmaceutical and medical technology sector in 2007 was $126,130, which ranks second only to the average base salary of securities and commodity brokers.
- Life sciences employees are active consumers, contributing to the state′s economy with a spending impact of $6.5 billion. (This estimate uses a disposable income measurement from the NJ IMPLAN model.)
- In 2007, New Jersey′s life sciences industry was responsible for the creation of approximately 82,376 “spin-off jobs”.
- HINJ member companies increased their capital construction activities in 2007, to $2.8 billion, an increase of $1.1 billion from the preceding year. Close to 40% of this spending was for new construction projects.
- R&D expenditures also increased over 2006 levels by approximately $400 million, to a total of $7.9 billion in 2007. This research activity includes 900 potential new products and more than 50 new drug applications (NDAs).
This is the 12th annual report commissioned by the Healthcare Institute of New Jersey, which started the annual industry survey in 1997; it is the fifth consecutive annual research report conducted by Deloitte.
In addition to the companies hosting the events today, this year′s report included data from other companies that are members of HINJ, including Baxter, Bayer Healthcare Pharmaceuticals and Lohmann Therapy Systems.
About the HINJ and Deloitte
Founded in 1997, the Healthcare Institute of New Jersey (HINJ) serves as a unified voice for the state′s research-based pharmaceutical and medical technology industry. For more information about HINJ, please visit: www.hinj.org.
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. For more information, please visit: www.deloitte.com/us.
HINJ Media Contact:
Director of Communications
732-729-9619, ext. 344