Deloitte performed a survey of the 22 members of the Healthcare Institute of New Jersey (HINJ), which includes Pfizer and Merck & Co, and concluded that pharma companies are not immune to the economic downturn and changing business environment.
Bob Franks, president of HINJ, added: “Like so many other industry sectors, our report reflects the current climate of the state and national economy.
“While the biopharmaceutical and medical technology community remains New Jersey’s premier industry, this year’s report serves as a stark reminder that we are not immune to global economic downturns or to significant changes to the business model.”
Capital expenditures dropped by 6 per cent to $1.6bn (€1.15bn) and R&D investment fell from $7.9bn to $7.5bn. NJ could have further difficulties in coming years, with the big acquisitions made by Pfizer, Merck & Co and Roche all being potentially detrimental to the state.
Not all doom and gloom
Despite the difficulties facing pharma in NJ the industry’s economic impact on the state rose to a record $29.5bn. This is underpinned by the 88,000 “spin-off” jobs the industry creates through the purchase of goods and services and the capital construction projects.
The average salary and benefits for those employed by pharma in NJ rose by 12.3 per cent to $141,590. Donations to charitable causes increased by nearly 10 per cent, with $221m of the $4.5bn given being used in NJ. Product contributions accounted for most of this.
In addition the taxes paid by HINJ rose from $783m in 2007 to $870m last year, in part because of a doubling in sales and use tax paid, although this is excluded from the overall economic impact figure.