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Mass. Biopharma Employment Grows Between ’01 and ’08, But Slower Than Projections

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By Alex Philippidis

Massachusetts' biotechnology and pharmaceutical workforce grew about 43 percent between 2001 and the start of the economic downturn last year — far stronger than the state's declining overall employment, but slower than projected in studies earlier this decade.

The state finished last year with a projected 45,905 biopharma jobs, up from the roughly 30,000 jobs recorded for 2001, according to the Biotechnology Employment and Investment Update, released late last month by the Massachusetts Biotechnology Council, the state's biopharma industry group.

The gain of almost 15,000 jobs shown by the Massachusetts biopharma industry came during a period when the state lost 56,000 jobs overall — a contrast trumpeted by MBC as a sign of the industry's strength despite growing competition from several states and nations for the jobs and other economic benefits of biopharma employers.

"Compared to an economy that as a whole has lost some jobs in that same period, that we grew by over 42 percent is significant," Peter Abair, who oversaw the Update as the MBC's director of economic development, told BioRegion News this week. "Certainly the numbers show that we're still performing at a very high level."

The biopharma job growth recorded in the latest report lags behind percentages anticipated in several reports produced by MBC and other groups in recent years. The difference reflects differing methodologies used by the studies in identifying and counting biotech and pharmaceutical jobs, Abair said in an interview.

Biopharma Job Breakdown

Abair told BRN that in 2007, the latest available year for data in the County Business Patterns database produced by the US Census Bureau, Massachusetts had a total 44,698 biopharma jobs consisting of:

• 19,378 R&D life-sci positions (52 percent of the total 37,266 sciences R&D jobs statewide);
• 11,865 pharma manufacturing jobs;
• 7,775 hospitals jobs (4.5 percent of 172,795);
• 2,410 university jobs (1.9 percent of 126,841);
• 1,128 drug wholesale jobs (15 percent of 7,521);
• 965 analytical laboratory instrument manufacturing jobs (25 percent of 3,860);
• 934 testing lab jobs (33 percent of 2,831); and
• 243 irradiation apparatus manufacturing jobs (10 percent of 2,432).

"We've come up with what we think is a good, conservative estimation of employment in the industry," Abair said. "Ours tends to be the lowest of the numbers that's used, but we also want to be as conservative as possible."

For 2008, he said, MBC projects a 2.7 percent increase in biopharma jobs, accounting for the 45,905-job projection. The growth percentage came from a review of data from Massachusetts Employment and Wage ES-202 reports for the life-sci R&D, pharma manufacturing and college/university categories — accounting for 86 percent of total industry jobs — then deriving weighted values for all three based on their percentages of industry jobs to calculate their expected growth rates.

Actual census bureau job figures for 2008 by NAICS code won't be ready until next July.

Seeing Double

The job growth rate recorded in the update lags behind the near-doubling of biopharma jobs anticipated in this decade by MBC and a partner back in 2002.

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The biotech council and the Boston Consulting Group envisioned the state's biopharma jobs more than doubling by 2010 under the middle of three growth scenarios contained in MassBiotech2010: Achieving Global Leadership in the Life Sciences Economy. That scenario anticipated the state creating more than 90,000 new jobs — with one third of them, or 30,000 being directly in the biopharma industry, joining the 30,000 jobs recorded for it in 2001. The remaining two-thirds of the jobs, or more than 60,000, were expected to be support positions, such as lawyers, accountants, and vendors serving the industry.

The middle scenario assumed the state would capture roughly 75 percent of the new R&D jobs and 50 percent of new manufacturing jobs created by Massachusetts-based biopharma companies — percentages the 2002 report said were based on historical data.

MassBiotech2010 also laid out a rosy scenario that assumed the state would create 48,000 new biopharma jobs, plus another roughly 100,000 support positions, by capturing nearly all new R&D and headquarters jobs, and 75 percent of new manufacturing jobs, created by Massachusetts biopharmas.

The report also presented a gloomy scenario in which Massachusetts would create just 6,500 direct biopharma jobs and about 13,000 support positions by attracting only 50 percent of new R&D jobs and 25 percent of new manufacturing and headquarters jobs generated by Massachusetts biotech companies would be located in the state.

Unlike MBC's Update, the 2002 report's employment criteria specifically cited jobs in clinical research organizations, and bioinformatics companies, though the most recent report included hospital and university jobs not cited by MassBiotech2010.

MBC's job criteria are tighter than those used by PricewaterhouseCoopers, the New England healthcare Institute, and the Massachusetts Technology Collaborative in the 2007 and 2008 editions of their report Super Cluster: Ideas, Perspectives, and Updates from the Massachusetts Life Sciences Industry. Both studies counted jobs in the wholesale trade and medical and testing laboratories categories along with the biotech, pharmaceutical, medical device, and teaching hospitals research categories studied by MBC.

The original Super Cluster report or Volume 1, released in 2007, showed a 3.5 percent, or 2,500-job, increase in Massachusetts life-sci employment between 2001 and 2005, which rose from 71,600 jobs to 74,100 jobs. That percentage rose a year later in Volume 2, to 8 percent, reflecting an increase of 5,725 jobs between a revised 2001 figure of 71,522 jobs, and the 77,247 jobs recorded for 2006.

A report last year offered an even higher figure for life-sci employment that included med device as well as biopharma jobs — 84,080 as of 2006, according to Growing Talent: Meeting the Evolving Needs of the Massachusetts Life Sciences Industry, a report produced by the University of Massachusetts Donahue Institute for the MBC and Massachusetts Life Sciences Center, the quasi-public state agency that oversees the state's $1 billion Life Sciences Act.

That report projected the state's biopharma and medical device industries would create 11,000 net new jobs between 2006 and 2014 — not counting a wave of new manufacturing expansions planned by life-sci giants [See Manufacturing Growth, below] or jobs created as a result of the $1 billion Life Sciences Act, signed into law last year by Gov. Deval Patrick.

Growing Talent urged the life-sci industry, the state, and all its schools to ensure that the 11,000 projected jobs can be filled by workers from inside the state [BRN, Sept. 22, 2008]. Industry-academic programs and policies designed to accomplish that goal are being hashed out by the Massachusetts Life Sciences Education Consortium, whose members include MBC, the Massachusetts Biotechnology Education Foundation, and the state's colleges and universities, Abair said.

The employment totals of Growing Talent and Super Cluster exceeded those counted by UMass Donahue and the Massachusetts High Technology Council in a 2007 study.

A Critical Alliance: The Biotechnology & Pharmaceutical Industries in Massachusetts counted 48,242 biopharma jobs in Massachusetts as of 2004, up 44 percent from the 33,618 shown for 1998. Despite that job growth, however, Massachusetts during the six-year period dipped two positions on the top-10 list of

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states with the largest biotech workforces, falling from fifth to seventh place as Michigan and Pennsylvania surpassed the Bay State, with California leading in both years.

A Critical Alliance and Super Cluster were two of three studies that cited worrisome job trends within Massachusetts' biopharma sector in recommending more state spending, and more favorable tax and regulatory policies, for the industry — in the 18 months before Patrick announced the Life Sciences effort from the exhibition floor of the 2007 BIO International Convention in Boston [BRN, June 16, 2008; May 14, 2007].

In the third study, the tech collaborative's economic development arm, the John Adams Innovation Institute, cited what it called anemic employment growth in concluding that Massachusetts' biotech and pharmaceutical industries were being increasingly challenged with success by other states.

“Although we are making progress in a number of areas, our comparative position is negatively affected by the fact that Massachusetts is a complex place to do business, especially given inconsistencies in the local permitting process and the reputation for an unpredictable regulatory environment,” according to Taking Stock of Progress and Challenges: Massachusetts Life Sciences Supercluster, a 16-page study released in October 2006.

Manufacturing Growth

MBC's Update highlighted one key area of biopharma job growth: A 43.6 percent increase, above the overall biopharma industry average, in the number of biomanufacturing jobs statewide. That number grew from just over 8,000 in 2001, to about 12,000 in 2008, the biotech council found.

That number, Abair said, should grow further over the next few years as pharma and biotech giants follow through on announced plans to expand their manufacturing operations, in part to consolidate costs with existing R&D centers they run in the state. Some examples:

Bristol-Myers Squibb expects to complete federal approvals next year for its $750 million, 400,000-square-foot first phase of a biologics manufacturing plant in Devens, Mass., expected to employ 350 people. That workforce is expected to grow to 1,000 people when all phases are completed. BMS chose Massachusetts over North Carolina and New York after being promised $60 million in state and local incentives.

Shire is building a 190,000-square-foot manufacturing facility slated to be complete by the beginning of 2011, part of a $394 million expansion of its campus at the Lexington (Mass.) Technology Park that includes shifting the headquarters of its Human Genetic Therapies division from Cambridge, Mass., and more than doubling the company's Massachusetts jobs over eight years by adding 680 staffers to its existing workforce of 675 people.

Genzyme is carrying out a $250 million expansion of a manufacturing plant in Framingham, Mass., projected to create 300 new jobs. Last year the quasi-public Massachusetts Life Sciences Center approved a $5.2 million grant to the city of Framingham toward infrastructure for the project.

Organogenesis plans to open a 95,000-square-foot building into which the company would expand its main manufacturing plant, with 60,000 square feet of manufacturing and quality labs, plus shipping/receiving and other support systems. The plant — which Organogenesis says will be the world's largest facility for manufacturing cell therapies — is part of a $53 million expansion of the company's headquarters in Canton, Mass. The expansion, expected to be completed in 2015, is expected to boost the company's workforce to 500 staffers from the 220 working there earlier this year.

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"These have been steady, growing entities here, and their manufacturing operations have continued and grown. Those big players account for the lion's share of those. But we also have a lot of clinical product manufacturing among smaller organizations and contract manufacturing also growing here," Abair said. "It's always difficult to predict very far down the road, but we know where the industry is going in general down the road, and it's going to grow."

Because they're already generating revenue, he said, smaller manufacturers have fared better than the venture capital-backed R&D startups that have traditionally anchored Massachusetts' biopharma cluster over the past year as the economy has soured.

"This remains one of the few places in the world where the expertise really reins. And in this still-new and emerging industry, you need to be where the expertise is," Abair declared.

The manufacturing spurt appears to defy projections in the Growing Talent report, which concluded that the demand for life, physical, and social-science technicians — including technicians for biomanufacturuing plants — was expected to rise 10 percent between 2006 and 2014, compared with 28.9 percent for biochemists and biophysicists, from 1,454 to 1,875 jobs; and 25 percent for medical scientists, from 3,672 to 4,589 jobs.

The growth of manufacturing jobs relative to R&D may also explain why the average annual income for biopharma jobs has dipped in recent years, according to the consensus of studies.

The Update cited an average Massachusetts biotech salary of $89,829, well above the state's overall average of $51,151 — a gap that explains in part why the state has always positioned itself as biopharma-friendly, especially over the past year as the state has carried out Patrick's Life Sciences Act.

Back in 2004, according to A Critical Alliance, the average annual biotech wage in Massachusetts was $98,595, up about 63 percent over the $60,577 recorded for the industry in 1998.

Super Cluster recorded an average annual salary of $97,600 for pharmaceutical jobs, and $101,300 for biotech jobs.

Abair cautioned that the differences in methodologies for counting biopharma jobs may also explain the variety of average annual wage figures cited in past reports.

Focus on Competitiveness

MBC plans to compile new editions of the Update annually. "Our intention, going forward, is to do something every September," following annual July updates by the census bureau of its County Business Patterns, and annual August updates by the state of its ES-202 data," Abair said.

Later this year, MBC will follow up its update with a study examining whether the state's share of biopharma employment has increased or fallen relative to other states. Earlier versions of the competitiveness review during the decade showed Massachusetts gaining share through 2006, Abair added.

"Based on just looking at the job growth numbers through '08, I would say we're still at least maintaining our share, if not growing it. What I expected in 2008, given that the economy turned in the last quarter and we started to see a lot of job loss, was a flat '08 if not a decline. We still added a few jobs based on our projections. That was a bit of a surprise, a pleasant surprise."

There's not enough data to say whether that job growth will continue this year, Abair said. "By the spring, we'll be able to see the '09 numbers trickle out in a little bit more detail. But we started out in a better place than I think we thought."

A future competitiveness analysis would also answer whether the state's biopharma sector will have lost any jobs as a result of Massachusetts' enacting on July 1 a ban on most industry gifts to doctors [BRN, July 6]. The move was opposed by industry advocates, who have expressed fears the ban would discourage job growth by biopharma companies.

"When we work on the policy side with lawmakers, we certainly need to reinforce the reality that other clusters around the world are making real investments, and are adopting pro-biotech policies, and we can't take our position for granted. Any negative anti-biotech, anti-pharma legislation may at some point down the road have an impact when we look at these numbers."


How the Numbers Were Crunched

Biotechnology Employment & Investment Update — a nine-page compilation of statistics typically compiled for the Massachusetts Biotechnology Council's more than 500 members — counts primarily all the Massachusetts pharmaceutical and medicine manufacturing jobs measured by North American Industry Classification System code 3254; just over half of the jobs within NAICS 54171, which covers 32 sub-categories of research and development in the life sciences as well as the physical and engineering sciences; and smaller percentages of the state's job totals in six other NAICS codes that reflect percentages of life-sci workers found by MBC a few years back:

• 33 percent of the testing lab jobs recorded for NAICS 54138.

• 25 percent of the analytical laboratory instrument manufacturing jobs recorded for NAICS 334516.

• 15 percent of the drugs and druggists' sundries merchant wholesale jobs in NAICS 4242.

• 10 percent of the irradiation apparatus manufacturing jobs in NAICS 334517.

• 4.5 percent of the hospitals jobs counted by NAICS 622.

• 1.9 percent of the jobs in colleges, universities, and professional schools counted by NAICS 61131.

The percentages will probably be adjusted every five to 10 years going forward, Peter Abair, who oversaw the Update as the MBC's director of economic development, told BRN.

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