New Brunswick, NJ, February 26, 2001 — New Jersey’s pharmaceutical companies are developing approximately one-third of all new products and indications now in clinical trials and awaiting FDA approval. In addition, New Jersey-based pharmaceutical and medical technology companies are showing significant increases in employment and capital investment.
The HealthCare Institute of New Jersey announced these findings and others today as the results of a study conducted by PricewaterhouseCoopers that measured the impact of the industry on the state. The study, conducted at the end of 2000, collected 1999 data from the Institute’s 20 members, which are research-based pharmaceutical and medical technology companies.
“Our industry represents not only a tremendous force in New Jersey’s economy, but also a commanding presence in the process of discovering and developing new medicines,” said William H. Tremayne, president of the Institute.
“The industry’s emphasis on research and development creates major capital investment in the state and generates higher salaries for the nearly one-quarter of the industry’s employees in New Jersey who hold jobs in R&D,” Tremayne continued. “This creates benefits not only to New Jersey’s economy, but also to the billions of people around the world whose lives are saved and improved by our medicines and medical devices.”
In June 2000, there were 3,590 new products and indications in clinical trials or awaiting FDA approval worldwide. Nearly 30 percent, or 1,055, were being developed by New Jersey-based companies. In 1999, 44 percent, or $19.9 billion, of total worldwide R&D expenditures of $45.4 billion were from the Institute’s member companies who are listed among the Top 50 pharmaceutical companies.
Out of the 10 companies that produced the best pipelines in 1999, 7 of them were Institute members and were responsible for 68 percent of the compounds in development in all 10 pipelines in 1999. These same seven companies were responsible for 67 percent, or $18.3 billion, of the total R&D spending by the companies with the 10 best pipelines.
New Jersey led the nation in 2000 with 40 percent, or 12 of 33, new drug approvals. New Jersey-based medical technology companies were third in the nation with four original pre-market approvals or PMAs (the equivalent of an FDA new drug approval) in 1999. The four PMAs represent 12 percent of the total approved in 1999. New Jersey-based companies had 16 supplemental PMAs approved in 1999.
Medical technology companies in New Jersey received clearance for 219 newly improved devices (510K approvals) by the FDA in 1999. Only California and Massachusetts medical technology companies had more product approvals than New Jersey companies.
Member companies employed 60,527 individuals in 1999, up 5 percent from 1998 employment of 57,629. The estimated direct and indirect employment is 106,441 jobs. This figure includes member company employees, employees of non-member pharmaceutical and medical technology companies, and jobs created in companies in other industries to service members.
Applying formulas used by the New Jersey Commerce and Economic Growth Commission, PricewaterhouseCoopers determined that the pharmaceutical and medical technology industry supports 149,017 jobs across the state.
This total includes direct and indirect employment and jobs created by increase in population and spending resulting from the pharmaceutical and medical technology industry’s presence in the state.
PricewaterhouseCoopers found that the average base salary for the industry was $73,948, up from $65,235 in 1998. Total compensation (including bonuses and excluding benefits) for those employed in the industry was $85,525, up from $80,223 in 1998.
Capital expenditures showed the most dramatic increase. For 1999, capital expenditures (defined as renovation, maintenance and new construction) totaled $1.5 billion, up 25 percent from the 1998 figure of $1.2 billion. Using a multiplier model provided by the New Jersey Commerce and Economic Growth Commission of approximately 1.63, the cumulative effect on New Jersey’s economy is $2.4 billion.
“New Jersey is the physical center for the pharmaceutical and medical technology industry in the U.S.,” noted Chris Kelly, the partner at PricewaterhouseCoopers who led the study. “The importance of the industry to the global economy serves to heighten the impact it has on New Jersey.”
Worldwide sales for member companies were $127.6 billion in 1999. This represents an increase of 18 percent over the 1998 sales amount of $108 billion. More than one-third of all drugs sold in the world come from companies based in New Jersey. For the industry as a whole, 1999 total pharmaceutical sales of $337.2 billion increased 12 percent from the 1998 figure of $302 billion.
Highlights of the study follow:
Product Development—The The pharmaceutical industry is targeting the special needs of the elderly, women, children and minority populations:
The Elderly
- For elderly patients, member companies are developing drugs to treat disease states such as diabetes, Alzheimer’s and dementia, stroke, heart attack and rheumatoid arthritis.
- New Jersey-based companies are developing 34 percent, or 94, of the 274 new compounds.
- Member companies are developing 16 new medicines for diabetes. The disease afflicts 6.3 million seniors in the U.S.
- Eleven new medicines are under development to treat Alzheimer’s disease and dementia. Alzheimer’s disease will claim nearly 22,000 lives this year.
- The New Jersey pharmaceutical industry is developing four medicines to treat myocardial infarctions (heart attack), a condition that was responsible for nearly one-half million deaths in 1999.
Women
- New Jersey-based companies are developing drugs for breast cancer, congestive heart failure, diabetes and osteoporosis. A total of 367 compounds are currently in development. Of that total, 110, or 30 percent, are from member companies.
- For breast cancer, the most common form of cancer in U.S. women, 15 new drugs are being developed. Approximately 180,000 women are diagnosed with breast cancer each year.
- Of the 10 million Americans with osteoporosis, 8 million are women. New Jersey-based companies are developing 11 medicines to combat this disease.
Children
- Cancer and asthma are two disease states that affect children. Member companies are developing 86 new compounds, or 40 percent, of the 217 total compounds.
- New Jersey-based companies are developing three new medicines for asthma, a disease that affects 5 million American children.
- Cancer will claim the lives of 2,300 children this year. Member companies are developing 15 new medicines to combat cancer.
Minority Populations
- The New Jersey pharmaceutical industry has developed one new medicine for infant mortality. Infants of minority populations, including African-Americans, Native Americans, Hispanics, and Alaskan natives have mortality rates higher than the national average.
- Member companies are developing 18 compounds for Type II diabetes. African-Americans are 70 percent more likely to suffer from diabetes than Caucasians. The prevalence in Hispanics is nearly double that of Caucasians. For Native Americans and Alaskan natives, the prevalence rate is twice that of the total population.
- New Jersey-based companies have three compounds in development to treat asthma. The disease is 26 percent more prevalent in African-American children than in Caucasian children. African-American children have more severe cases of the disease and have more frequent hospitalizations than Caucasian children.
- Research efforts by member companies have resulted in 10 new medicines for cardiovascular disease. Coronary heart disease mortality was 40 percent higher for African-Americans in 1995 than Caucasians.
- Two new medicines have been discovered by New Jersey-based companies for HIV infection and AIDS. Racial and ethnic minorities comprise 25 percent of the total U.S. population, yet they account for more than half the AIDS cases.
- The New Jersey pharmaceutical industry has 31 new medicines in development for cancer. African-Americans have a cancer death rate about 35 percent higher than that of Caucasians.
- Two new drug candidates for lupus have been developed by member companies. Lupus is a recessive disorder common in special populations in the U.S. The disease is more prevalent in African-Americans, Latinos, Native Americans, and Asians. Young females are at greatest risk for developing the disease.
Employment
- Of the 60,527 employees working at member companies in New Jersey, 22 percent, or 13,379, were in research and development; 20 percent, or 12,228, were in corporate administration; 19 percent, or 11,510, worked in manufacturing; 21 percent, or 12,843, were in sales and marketing; and another 18 percent, or 10,567, were not identified.
- Each pharmaceutical industry job supports 1.4 additional jobs throughout the New Jersey economy.
- Average salaries at member companies of $73,948 are among the highest in the state. Only the chemical and allied product industry reported higher wages, with an average annual salary of $78,662.
Capital Expenditures
- Capital expenditures for 1999 fell into two areas. R&D, production and manufacturing generated the bulk of capital expenditures with $1 billion, while spending for safety, environmental, administrative and general sites made up the balance with $432.5 million.
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.
PricewaterhouseCoopers is the world’s leading professional services organization. Drawing on the knowledge and skills of 150,000 people in 150 countries, the firm helps its clients solve complex business problems and measurably enhance their ability to build value, manage risk and improve performance. The PricewaterhouseCoopers survey is the fourth annual study commissioned by the Institute to assess the impact of the industry on New Jersey’s economy.
For more information about the Institute or the PricewaterhouseCoopers survey, please contact Rebecca Perkins at 732-342-8442.