Understanding Our Role in State Economies May 2011

Archstone Consulting recently released data about the economic footprint of the biopharmaceutical research sector at the state level for the year 2008, the most recent year that data were available. This is broken down state-by-state, providing local detail beyond the most recent national data.

Nationally, the sector employs roughly 650,000 workers, supporting a total of nearly 3.1 million jobs across the country. In other words, every direct job in the sector supported 3.7 jobs in other sectors. On average, direct sector employees paid approximately three times as much in federal and state taxes as employees in the rest of the economy. The sector’s contribution to GDP was roughly 3.5 times the average contribution per sector in the rest of the economy. Each direct job contributed more than double the average contribution per worker in the rest of the economy.

This important national economic presence is reflected – in varying degrees – at the state level. The sector’s presence is stronger in some states than in others, but no state is without the economic benefit of biopharmaceutical research companies. We’ve posted the fact sheets for each state on PhRMA’s Web site. This will make it easy for you to read about the impact of the sector in your state and, if you wish, to explore other states that may interest you.

Each fact sheet contains a wealth of information about the importance of the sector in each state. Today, we’ll go over some of the key details included in the Archstone fact sheets and talk a bit about what each data set says about the sector and what it means to the state. We’ll use Colorado as an example.

Biopharmaceutical companies employed nearly 13,000 workers in Colorado in 2008 and supported a total of nearly 55,000 jobs. Direct jobs represent a variety of employment types. For example, 23.8% of biopharmaceutical sector employees work in the life, physical, & social sciences; 22.3% work in architecture & engineering; 15.6% work in computer & mathematical science; and 9.7% work in business & finance operations. This doesn’t capture the full 100%, but certainly demonstrates how varied biopharmaceutical employment is.

Direct biopharmaceutical employees contributed nearly $240 million in federal taxes (including Social Security) and more than $32 million in state taxes. The average biopharmaceutical sector employee contributed much more in taxes (e.g., about $3,500 in state taxes) than the average Colorado worker in the rest of the economy (less than $1,000 in state taxes).

Economic output is the value of the goods and services provided by the sector. In Colorado, the biopharmaceutical research sector contributed nearly $4 billion in output in 2008, and supported total output of nearly $11 billion. Direct output per direct employee in Colorado was roughly $294,000 in the biopharmaceutical sector, compared with $153,000 in the rest of the economy.

Biopharmaceutical research companies invested nearly $380 million on R&D in Colorado in We do have more-recent data on clinical trials at the state-level. In 2010, more than 1,700 clinical trials were being conducted in Colorado. These included: 810 trials for medicines to treat cancers, 98 trials for cardiovascular diseases, 75 trials for HIV/AIDS and 18 trials for Alzheimer’s disease and other dementias.

We hope the data for your own state will help prepare you to discuss at a more local level the important role of the biopharmaceutical sector in your state. Don’t forget – jobs and tax dollars and economic output are important, but the most important benefit of the sector in each state is the hope provided by the work that we do.