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Biopharmaceutical Industry Contributions to State and U.S. Economies
Oct 01, 2004
Ross DeVol, Perry Wong, Armen Bedroussian, Lorna Wallace, Junghoon Ki, Daniela Murphy and Rob Koepp

There is a good reason why governments across the country and around the world are fighting hard for biopharmaceutical dollars: These companies have the potential to add thousands of jobs and millions of dollars to their economies.

This study shows the strong economic impact that the biopharmaceutical industry has on state and U.S. economies - more than 2.7 million jobs and $172 billion in real output in 2003 when one includes the full impact the industry has on all sectors of the economy.

More important, the 10-year projections in this study show that this impact will grow stronger in the next decade. By 2014, the total employment impact will increase to over 3.6 million and the real output figure will reach $350.1 billion. These projections are based upon the assumption that government policies continue to encourage basic and applied research and development in the biopharmaceutical field.

The study shows that several states - New Jersey, Massachusetts, Pennsylvania, California and Maryland among them - are already in position to take advantage of this industry's economic development, while others like Nevada, Vermont, Florida and West Virginia are on the cusp of developing an important biopharmaceutical economy.

The study provides a state-by-state examination of the industry's economic impact in four main areas:

Industry Geographic Location and Performance: This section shows the economic importance of the biopharmaceutical industry state by state, measuring the concentration and growth of employment and output. The top states in this category are New Jersey, Indiana, Massachusetts, North Carolina and Pennsylvania.

Innovation Pipeline: This section measures a state's assets necessary to produce a strong and viable biopharmaceutical industry, including such things as the skills of its workforce and the amount of research and development dollars it receives. The top states in this category are Massachusetts, Maryland, Connecticut, New Jersey and Pennsylvania.

Multiplier and Tax Impact: Institute researchers looked at how much additional economic activity is created by the biopharmaceutical industry, including and indirect and induced impacts - additional jobs and output that are created in other sectors - and tax revenues States showing the biggest results here are California, New Jersey, Pennsylvania, North Carolina and Illinois.

10-year Industry Projections: This section projects the likely growth of the biopharmaceutical industry in each state by employment and output, based on an Institute economic model. The states showing the biggest gains in absolute numbers in the next decade include California, Massachusetts, Pennsylvania, New York and Maryland.

The study was made possible, in part, by support from PhRMA, the industry trade group. The results can be used by government and economic development officials to evaluate their biopharmaceutical assets and determine what is needed to grow and nurture the industry in their states.

View statistics. (This interactive site allows you to review data by individual states or categories.)

View fact sheet.