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
worldwide.
In recent years, 40% of the new drugs approved by the FDA were created
by
New Jersey firms. (This all according to a study by
PriceWaterhouseCoopers
for the Healthcare Institute of New Jersey (HINJ), found at
http://www.hinj.org/pwc.pdf )
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
1886.
Then Merck moved in 100 years ago, Roche 80 years ago, and
Schering-Plough
60 years ago. The momentum, or ‘critical mass’ as he calls it,
gathered,
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
and
others.
The HING study states that “New Jersey has more scientists per square
mile
than any other state in the nation.” Many of these scientists are
“fed”
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
future
for the growing demand and the state is making plans to deal with the
shortage.
The last two governors of New Jersey, according to Healey, have
instituted
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
http://www.njbrc.org/finance/techfinance.html
New companies coming into the state are allowed to turn their tax
losses
and credits into cash to grow their businesses. There are also
“construction
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, http://www.locationusa.com/Profiles/nj.html)
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
becoming
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!
cath-ga
Research strategy:
Google searches of
Merck, Johnson & Johnson, Wyeth,
Phrma.org, http://www.phrma.org/
Health Care Institute of New Jersey
New Jersey financial incentives
New Jersey pharmaceutical incentives
Phone calls to Merck, Phrma, and HINJ |
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