Rise in Jobs Seen in Drug Sector

An industry-sponsored study being released today expects employment growth over the next decade in the drug-making sector, already among the highest salaried and most productive in the nation.

Because of this, many state and local governments are trying to lure drug manufacturers to their areas to boost sagging economies.

“The industry is very critical to the future of the economy,” said Milken Institute economist Perry Wong, who co-wrote the report paid for by Pharmaceutical Research and Manufacturers of America. “It’s one industry that is high in growth potential. It is very unlikely to have jobs outsourced.”

The report said jobs in the combined industries of biotechnology and pharmaceuticals were expected to grow 11% from 406,700 workers last year to 536,300 within 10 years.

However, the number of jobs related directly to drug making accounted for less than 1% of the total workforce.

In contrast, Wal-Mart Stores Inc. employs 1.4 million workers. But the study said drug-making jobs are more valuable because they are higher paying and create more indirect jobs. The study concluded that every biotech job created 5.7 jobs in other industries. Every retail job accounts for an additional 0.9 job, according to the report.

Also, the average wage in the industry -- which the report dubs “biopharmaceutical” -- was nearly $73,000.

“These are good jobs and good wages,” Pharmaceutical Research Chief Executive Alan Holmer said.

That’s why governors such as Florida’s Jeb Bush and mayors such as San Francisco’s Gavin Newsom are offering the industry tax breaks, free land and other financial incentives to relocate.

According to another report prepared for Biotechnology Industry Organization and released at its annual convention in June, at least 29 states have formal plans to woo the biotechnology industry and many, like Pennsylvania, are using money gained from the global tobacco settlement to fund biotechnology development projects.

But some economists warn that drug manufacturing is still a tiny industry dominated by a few big companies and highly concentrated in a few regions of the country. Drug companies like to cluster around universities and each other so they can easily swap -- and steal -- technology and scientists, making it difficult for regions to launch a biotechnology industry from scratch, said Joseph Cortright, a Portland, Ore., economist who co-wrote a report on the subject.

“This is an industry that is very tightly sequestered in a few metropolitan areas,” Cortright said. “It has grown fastest in the areas that it is most established, and that points to the fact that there are real business advantages to being located where the clusters already are.”