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States Take the Lead in Advancing US Biopharma Industry Development

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States have taken the lead in advancing strategic policies and programs to attract, retain, and grow an innovative biopharmaceutical presence in the United States, according to a new report conducted for the Pharmaceutical Research and Manufacturers of America (PhRMA), which represents leading US biopharmaceutical research companies.

States have taken the lead in advancing strategic policies and programs to attract, retain, and grow an innovative biopharmaceutical presence in the United States, according to a new report conducted for the Pharmaceutical Research and Manufacturers of America (PhRMA), which represents leading US biopharmaceutical research companies. The report, Economic Growth for the 21st Century: State Efforts to Attract and Grow the Biopharmaceutical Industry, details the rise of policies and programs that are intended to create innovation-led, industry-cluster development efforts. An industry cluster is a group of firms, related economic actors, and institutions that are located near one another and that draw advantages from their mutual proximity and connections.

It’s not hard to see why so many states have made attracting and keeping the biopharmaceutical industry such a priority. Nationally, the biopharmaceutical sector leads all US industries in R&D activity and is among the leading industries in generating patents and venture capital, directly employing nearly 854,000 workers. For each direct biopharma job created, another 4.21 jobs are generated; the industry supported a total of 4.4 million jobs in 2014. Biopharma jobs are both high wage and high quality. These factors, along with a broad geographic footprint of economic activity and innovation related to the industry, help drive the number of states focusing on biopharmaceutical industry development. States compete with one another to make attracting biopharma a priority because the biopharmaceutical industry and the larger biosciences are economic engines that provide jobs across a range of occupations.

However, the bar for advancing biopharmaceutical innovation and industry development is much higher than it is for other innovation-led industries, the report notes: “Among the factors that distinguish biopharmaceutical development are the especially close ties between industry, academia, and clinical care required to advance innovation; the long, costly, and uncertain process of new product development associated with the high level of regulatory oversight and rigorous clinical trials required for biopharmaceutical product approvals; and the specialized nature of research capabilities, facilities, and talent associated with biopharmaceutical R&D.”

These intertwined factors have meant that states must pay more attention and dedicate more resources to the process of fostering biopharmaceutical industry development, including heightened efforts by states supporting biopharma research across universities and industry, ensuring available capital for newly emerging ventures, creating business incentives, and developing talent. In addition, states must have programs that catalyze commercialization of biopharma research discoveries.

The report describes 4 key findings (with an associated 7 key economic practices for advancing biopharmaceutical research, represented here in boldface) on how states are evolving their policies to advance biopharmaceutical development.

1. States have remained steadfast in their commitment to attracting and growing a biopharmaceutical presence in 5 program areas:

  • 41 states are pursuing targeted strategy for biopharma-related development.
  • 45 states are ensuring leading-edge bioscience research capacity and infrastructure.
  • 48 states are advancing innovation and entrepreneurial development to leverage their R&D efforts for economic development.
  • 44 states are addressing the availability of financial capital that assists biopharma companies.
  • 42 states are supporting innovation-oriented business incentives for biopharma companies.

​​2. States continue to broaden their range of development efforts to meet new challenges to industry growth, with increased efforts to advance the science, technology, engineering, and math talent pipeline and to promote advanced manufacturing capacities.

3. States with long-term commitments (10 years or longer) to developing the biopharmaceutical industry are experiencing major impacts from their investment. North Carolina, Arizona, and Texas, in particular, report high employment rates and higher revenues related to their investments in the biopharmaceutical industry.

4. Two leading states in the biopharmaceutical industry—Massachusetts and Connecticut—have expanded biopharma development significantly in recent years and have developed initiatives that include competitive awards for start-ups. Connecticut, for example, has initiatives that are helping the state to become a national leader in personalized medicine.

The report concludes that a commitment to biopharmaceutical industry development is broadly shared among states, suggesting that there exists a national consensus on the importance of approaches to pursuing continued growth in the biosciences at the state level. States recognize that supporting biopharmaceutical development requires a comprehensive and integrated approach, and 45 states are actively involved in 5 or more of the 7 program activity areas reviewed in this report.

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