The subsidy package used to attract Amylin to Ohio was probably too large and inflated by the biotech’s claim it was considering other locations, according to a report which calls for an end to the “economic war among states”.
Creation of high-technology jobs has become a priority for many local and state officials, leading to pharmas and biotechs being offered substantial incentive packages to set up in particular locations.
The wisdom of this approach is questioned in a report by Good Jobs First , a corporate and government watchdog, which cites the establishment and expansion of Amylin’s Byetta (exenatide) manufacturing facility in Ohio as an example.
In 2005 Amylin proposed to establish its manufacturing operations in Ohio and create 52 manufacturing jobs. State officials believed Amylin was also considering a location in Kentucky and offered the biotech an incentive package worth an estimated $3m (€2.1m), according to the report.
Amylin selected West Chester, Ohio for its facility and in October 2006 proposed to expand the site, investing $410m and creating 500 jobs. Over the next six months local and state officials offered various incentives, resulting in Amylin receiving over $100m in subsidies.
This process occurs in many industries at locations around the world. However, the report claims Amylin was already “highly motivated” to select West Chester because of its proximity to its technology partner Alkermes.
Consequently, the report believes state and local officials, driven by economic depression in the region, offered too much to attract Amylin. Furthermore, the report claims there is little evidence Amylin considered other sites for expansion.
Amylin denies it only considered Ohio as a location. A release issued to in-PharmaTechnologist states: “Amylin did consider multiple sites and conducted site searches in several other states before selecting the West Chester site for the facility and the subsequent expansion.”
State and local officials told Cincinnati.com that most of the incentives are performance based and that the Amylin deal was an important step to establishing the region as a location for biotechs.
The report also claims it was risky to invest government funds in a company with one established product, adding that “any stumble in the rollout of long-acting Byetta could put both the taxpayers’ investment and the region’s 400-plus jobs at risk”.
In response, Amylin said it expects the US Food and Drug Administration (FDA) to make a decision on once-weekly Byetta in March. If approved Amylin expects “to have substantial job growth as [it] ramps up commercial manufacturing and other activities”.
The company added that “it has demonstrated a tangible commitment to Ohio and the local community, and has every intention of continuing that commitment for the long-term”.
Good Jobs First is funded by private donations, foundations and labour groups.