THE news for workers in New Jersey’s big pharmaceutical companies has hardly been good lately. The state’s status as the capital of pharmaceutical research, manufacturing and marketing is being eroded generally by an evolving global marketplace and locally by the mergers of some of the biggest names in the pharmaceutical industry, each to be followed as surely as plop-plop fizz-fizz by plant closings and layoffs.
If there is any good news in all this, it is for the men and women in white lab coats: New Jersey’s quality of life, and its proximity to capital markets, have helped expand its biotechnical research sector, a sub-industry within pharmaceuticals, with relatively few, but very well-paid, employees, industry members say. But for the office workers, the manufacturers and the well-groomed men and women hired to hand out samples and ball point pens at doctors’ offices, the future is much darker.
“For New Jersey, there are definitely going to be some very consequential changes,” said Raymond Hill, general manager for consulting and services at IMS Health, a consulting firm. “New Jersey has been the heartland for pharma for a lot of companies, but the trend we see is a continued movement of these operations out of state and overseas, where it’s just a lot cheaper to manufacture drugs and to do clinical trials.”
Three major pharmaceutical companies with operations in New Jersey have mergers under way, and each one will involve disruptions in lives and careers. In January, Pfizer, based in Manhattan, announced its plan to purchase Wyeth, a big Madison company. In March, Merck, based in Readington Township in Hunterdon County, announced its intention to merge with Schering-Plough, located in Kenilworth; Merck officials said they expected to eliminate 15 percent of their 105,000-person global work force.
And on March 12, Roche, the Swiss pharmaceutical company with United States headquarters in Nutley, agreed to acquire full ownership of Genentech, the California genetic research company. It announced it would close its manufacturing plant in Nutley, for a loss of 400 jobs, and shift its marketing and sales offices to California.
“In 2008, we had 13.1 percent of the nation’s pharmaceutical jobs — that’s the good news,” said James W. Hughes, dean of the Bloustein School of Planning and Public Policy at Rutgers. “The bad news is that in 1990 we had 20.2 percent, so what we are seeing is that the big new investment in this industry over the past decade has not been coming to New Jersey.”
In 1990, New Jersey was home to nearly 42,000 pharmaceutical jobs; by 2007, that number had shrunk to 37,800, Mr. Hughes said, a decline of 11 percent. That may not be a terrible drop, except when contrasted with the tremendous growth in the industry nationally during the same period, from 207,200 jobs in 1990 to 290,000 in 2008, an increase of 40 percent, according to Mr. Hughes.
Yet there is a bright spot in the way New Jersey has managed to sustain a strong presence of biomedical research, which is where new drugs are created, and where some of the highest-paying work is in the industry. Since 1998, the number of biotechnology research firms in the state has grown from 80 to 240, according to Debbie Hart, president of BioNJ, a biotech trade group. These companies are tiny, some with no more than two or three scientists, she said, but the average number of scientists these firms employ is about 100.
The reason those jobs are still here, and growing, has as much to do with money as with brainpower, Ms. Hart said, since the development of drugs is fueled by venture capital, and the companies like to stay close to investors.
“New Jersey is a very desirable location for biotech, because we have supportive government programs and we have the financial markets literally across the river in New York, as well as billions of dollars in venture capital on Nassau Street in Princeton,” Ms. Hart said. “And New Jersey is a great place to live.”
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