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Pfizer CEO: How The Biopharmaceutical Industry Creates Value (And Jobs) For The U.S. Economy

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POST WRITTEN BY
Ian Read
This article is more than 5 years old.

Pfizer announced it will invest $465 million to build a new Modular Aseptic Processing Facility in Kalamazoo County, MI. The 400,000-square-foot facility, which will produce critical life-saving injectable medicines for patients around the world, is expected to generate an additional $49 million for the local economy and create 450 new highly skilled jobs over the next several years.

These last two points highlight the significant economic value that biopharmaceutical companies create for the U.S. economy, as well as the importance of advocating for policies and regulations that incentivize innovation and growth.

The most fundamental way in which the industry creates value is by discovering and manufacturing innovative medicines that help people live longer, healthier, more productive lives. For example, a National Bureau of Economic Research study found that cancer survival rates resulting from new treatments created an estimated 23 million additional life-years and roughly $1.9 trillion in social value from 1988-2000. Similarly, an Annals of the Rheumatic Diseases report found that rheumatoid arthritis patients receiving novel biologic treatments were able to work 31 weeks longer over a two-year period than patients on conventional therapies.

But the industry’s value creation is even more tangible when you look at its impact on GDP and job creation. According to a study commissioned by the Pharmaceutical Research and Manufacturers of America (PhRMA), the U.S. biopharmaceutical industry contributed nearly $700 billion (or 3.7%) to the U.S. GDP in 2015. That same year, the industry directly employed more than 800,000 people while supporting more than 3.9 million additional jobs across the country through its supplier and partner relationships.

Many of the jobs created by the industry are highly skilled, including scientists, engineers, trained technicians and expert tradesmen. Nearly 95% of the 450 new jobs in Pfizer’s Kalamazoo County expansion, for example, will fall into one of these categories. And when you have highly skilled jobs, you pay higher wages. The industry’s average compensation of $129,500 (including wages and benefits) per worker is more than double U.S. private sector average. This speaks to the complexity of drug development and manufacturing processes, which require significant effort and financial investments to ensure consistently high levels of quality and compliance within a highly regulated industry.

The State of Michigan recognizes the value the biopharmaceutical industry creates and–through the active engagement of the Michigan Economic Development Corporation (MEDC)–continues to be a valuable partner. Michigan is one of more than 40 states that are pursuing targeted strategies for biopharma-related development, have in place innovation-oriented business incentives for the industry, or both.

Many of these states are reaping significant economic benefits as a result of their commitments. Arizona’s Bioscience Roadmap, for example, helped generate a 49% increase in bioscience jobs from 2002-2015–outpacing U.S. growth of 13.7%. Similarly, Texas’s Industry Cluster Initiative has led to the state’s biopharmaceutical employment rising more than 8 percentage points higher than the nation from 2007-2014.

To ensure the U.S. biopharmaceutical industry continues to create value for local, state and national economies, we need policies and regulations that incentivize innovation and investment. The new tax code, which has spurred additional investment, was a good start–but there is more work to be done.

Among the priorities we must consider are increased funding to support basic research; addressing unfair trade and IP practices by other nations; enacting healthcare reforms that allow appropriate reimbursement for the cost of innovation; and increasing private and public investment in STEM-based workforce training–including apprenticeships–to ensure we have a future workforce with the skills needed to run increasingly complex manufacturing operations.

We have entered an exciting new era in drug discovery, development and manufacturing, with scientific advances that will result in future breakthroughs and cures. If we make the right investments and enact the right policies, these advances will deliver the dual benefit of transforming the lives of millions of patients around the world and creating exciting new opportunities for U.S. workers.