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State’s life sciences sector grows despite recession

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Despite a recession, the number of jobs in Washington state’s life sciences sector rose 9 percent from 2007 through the first quarter of this year, according to a report released at the Washington Biotechnology & Biomedical Associations (WBBA) 2011 Governor’s Life Sciences Annual.

WBBA President Chris Rivera said the upbeat report on state’s life sciences industry was “conservative” — but added there were challenges that threatened the sector’s growth, including burdensome regulation and increased competition from competitors both here in the U.S. and abroad.

The report “Trends in Washing’s Life Sciences Industry 2007–2011”, which was prepared for WBBA by the Washington Research Council, found that the life sciences was now the fifth largest employment sector in the state, after transportation and equipment manufacturing, agriculture, software, and food and beverage manufacturing.

The sector, which does not include hospitals and other health services, employs 33,519 individuals directly, whose employment, in turn, supports as many as 57,000 other jobs indirectly for a total of nearly 91,000 overall, the report said.

In general, life science jobs are well paid, with an annual average wage of $77,490, compared to the state’s average private sector wage of $48,519 a year.

Overall, the sector adds $10.4 billion to the state’s gross domestic product of $340.5 billion in 2010.

Official portrait Washington State Gov. Chris Gregoire

Chris Gregoire

In her address to the conference, Gov. Christine Gregoire said collaboration has been the key to the success of the state’s life science sector.

“Our growing life sciences sector is built on three strong pillars: our educational institutions, our private businesses, and our nonprofit organizations,” she said, which “unlike many around the world are all working together.”

Gregoire cited a number of promising programs designed to support the sector, in particular small start ups, but warned that cuts to education due to the budget crisis threatened the sector.

“We cannot afford to continue to compromise our education system in this state and yet expect that we be on the cutting edge of the knowledge economy,” she said.

Speaker Highlight: Eli Lilly CEO John Leichleiter

Eli Lilly CEO John Leichleiter told the conference that while the U.S. Life sciences and biopharmaceutical sector was the “envy of the world” the sector is “facing today nothing short of a innovation crisis.”

Leichleiter blamed the high cost of research and development, burdensome regulation at home, and increased competition abroad, particularly from China and India.

Leichleiter noted that it now takes $1.3 billion to develop a new drug. At the same time, due to expiration of patents for a large number of top-selling drugs, the industry faces the loss of $150 billion in annual revenue. This means there will be less to invest in “next generation of medicines,” Leichleiter said.

These and other pressures are forcing a “wave of defensive consolidation” among “arge cap pharmaceutical companies, resulting in a “dwindling number of entities capable of taking a discovery to a medicine.”

At the same time,  China and India are “producing more scientists and engineers than we are and are intensely focussesing on developing their innovation capacity,” Leichleiter said.

Leichleiter proposed five policy remedies:

  1. Improve science and math literacty by improving K througn 12 education.
  2. Immigration reform that “allows and encourages top scientists to choose to work in the U.S.”
  3. Strong and sustained federal support for research: Medical research is a long process, he noted, “the funding must be consistent, predictable and sustained” in order to attract researchers and keep them engaged.
  4. Tax reform: Lowering corporate tax rates to the 20 to 25 percent range, more in line with the rates seen in competitor nations.
  5. Regulatory reform: Make drug approval quicker and more predictable and that better balances risks against potential benefits. “The pressure on regulators is to err on the side of avoiding risks, when some patients might accept those risks for the treatments potential benefit,” he said.

University of Washington President Michael Young echoed Gregoire’s and Leichleiter’sconcern about the effect state and federal budget cuts may have to the education system.

Young argued that there were three elements needed for a successful regional high-tech sector: an “innovative, imaginative business community that is willing to take risks”, a university that included “economic development in its mission,” and a supply of well-trained, “entrepreneurial students.”

That third leg was under threat due to budget cuts to public education, he warned.

WBBA also announced 2011 winners of their Innovation Award.

Seattle Genetics was recognized for its work on Adcetris (brentuximab vedotin), approved for the treatment of patients with relapsed Hodgkin lymphoma, and for the treatment of patients with relapsed systemic anaplastic large cell lymphoma.

Amgen was recognized for the FDA approval of Prolia (denosumab) for the treatment of postmenopausal women with osteoporosis at high risk for fractures, as a treatment to increase bone mass in women at high risk for fracture receiving adjuvant aromatase inhibitor therapy for breast cancer, and as a treatment to increase bone mass in men at high risk for fracture receiving androgen deprivation therapy for non-metastatic prostate cancer.

“Success in today’s economy is most directly tied to a region’s ability to grow, retain and attract human capital,” Young said.

Young argued that reason why the U.S. has been able to thrive as as the world economy have evolved from an economy based on first, agriculture, then industry, then services and now knowledge, was that it had an economic and regulatory environment that allowed businesses to adapt, a cutting-edge research infrastructure, and the “mechanisms for the best and the brightest to rise to the top,”

“The mechanisms that has allowed the best and the brightest to rise to the top have been the universities,” Young said, particularly the public universities, which educate the vast majority of America’s young.

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