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Q: Why all Pharmacuetical Headquarters in NJ? ( Answered 5 out of 5 stars,   0 Comments )
Subject: Why all Pharmacuetical Headquarters in NJ?
Category: Business and Money > Economics
Asked by: foutaine-ga
List Price: $70.00
Posted: 03 Feb 2003 11:21 PST
Expires: 05 Mar 2003 11:21 PST
Question ID: 156802
Why are all the major pharmacuetical companies headquartered in New

I work in healthcare and have asked many other people who work in
healthcare/pharmacueticals and they do not seem to know, either.  Just
looking at the Fortune 500 pharmacuetical companies, I've listed them
below, and you'll see what I mean.

There are 14 Fortune 500 pharmacuetical companies -and five of them
are headquartered in New Jersey.  Also, nine of the 14 are
headquartered on the East Coast (I'm more curious about the New Jersey
phenomenon, but any additional information on why the East Coast has
taken the lead on pharmacueticals is certainly welcome).

Also, you should note that it's not just the large pharmacuetical
companies listed below that have chosen New Jersey, even smaller
and/or foreign-based pharmacuetical companies have chosen their
headquarters or USA-headquarters to be in New Jersey.

All Fortune 500 Pharmacuetical companies:

1. Merck (Whitehouse Station, NJ)
2. Johnson & Johnson (New Brunswick, NJ)
3. Pfizer (New York, NY)
4. Bristol-Myers Squibb (New York, NY)
5. Parmacia (Peapack, NJ)
6. Abbot Laboratories (Abbott Park, IL)
7. Wyeth (Madison, NJ)
8. Eli Lilly (Indianapolis, IN)
9. Schering-Plough (Kenilworth, NJ)
10. Amgen (Thousand Oaks, CA)
11. Allergan (Irvine, CA)
12. Genzyme (Cambridge, MA)
13. Ivax (Miami, FL)
14. Forest Laboratories (New York, NY)

Is it perhaps that it's a matter of inexpensive land with proximity to
New York City?  But, why wouldn't Connecticut and upstate New York be
an option, then?  Or is there some legal loophole that allows them to
do business easier and cheaper in New Jersey?

I want to know for two reasons: (1) I'm just very curious to know why
and (2) if there is a logical pattern, then that pattern may be
applied to other U.S. states or European countries where
pharmacuetical companies may benefit and produce pockets of economic
Subject: Re: Why all Pharmacuetical Headquarters in NJ?
Answered By: cath-ga on 03 Feb 2003 15:54 PST
Rated:5 out of 5 stars
Dear foutaine-ga,

The short answer to your question is: location, location, location!
Now for the long answer:

You are quite right in noticing that New Jersey is the the “global 
epicenter” of the pharmaceutical and medical technology industry. The
state is known as “the nation’s medicine cabinet,” and the industry 
employees more than 66,000 people there. New Jersey companies sold 
$146 billion worth of pharmaceuticals in 2000, 41% of the sales
In recent years, 40% of the new drugs approved by the FDA were created
New Jersey firms. (This all according to a study by
for the Healthcare Institute of New Jersey (HINJ), found at )

According to Bill Healey, the Executive Vice President of HINJ, 
New Jersey historically represented the “wide open spaces” to 
New York and European companies seeking to locate their large 
factories. Johnson & Johnson actually originated in New Jersey in
Then Merck moved in 100 years ago, Roche 80 years ago, and
60 years ago. The momentum, or ‘critical mass’ as he calls it,
and a long list of other companies followed suit. 

Continued growth was fostered by three main factors, according to 
Jeff Trewitt, spokesman for “Phrma,” the Pharmaceutical Researchers
and Manufacturers of America. He says New Jersey offers:

1) Proximity to New York and WALL STREET

2) Proximity to easy transportation to Europe through New York (many
of the
    companies are multi-national.)

3) Proximity to very good research institutions: Princeton, Rutgers

The HING study states that “New Jersey has more scientists per square
than any other state in the nation.”  Many of these scientists are
into the industry by the state’s top 5 research institutions:
Princeton, Rutgers University, The University of Medicine and
Dentistry, the New
Jersey Institute of Technology, and the Stevens Institute of
Technology. However, the Work Force Supply and Demand analysis in the
economic report
above shows that there will not be enough trained workers in the
for the growing demand and the state is making plans to deal with the

The last two governors of New Jersey, according to Healey, have
incentive programs to continually attract new pharmaceutical and
medical technology business to the state. You can find a description
of some of
the incentives at

New companies coming into the state are allowed to turn their tax
and credits into cash to grow their businesses. There are also
allowances” that entice new companies into New Jersey, and grants to
companies that create new jobs (see the article on New Jersey at 
Location USA Online,

Connecticut and upstate New York HAVE attracted some of the same
type of pharmaceutical business as New Jersey, but have not been
as successful, according to Bill Healey. Other areas which are
big bio-tech centers include California, Texas, Massachusetts, and
North Carolina.

To sum up, it seems that New Jersey had that initial combination 
of ideal location, successful companies, qualified work force, and 
favorable business climate that encouraged the continued attraction of
similar new firms. It exemplifies the old saying, “Nothing succeeds
like success.”

If there is anything that is unclear or incomplete in this answer,
I hope you will give me the chance to clarify before you rate this
answer. Thank you for the question. It was a pleasure researching 
it for you!


Research strategy: 

Google searches of

Merck, Johnson & Johnson, Wyeth,,

Health Care Institute of New Jersey
New Jersey financial incentives
New Jersey pharmaceutical incentives

Phone calls to Merck, Phrma, and HINJ
foutaine-ga rated this answer:5 out of 5 stars
Great, thank you very much.  I had some prior knowledge, but you were
able to build upon that with empirical information.

There are no comments at this time.

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