Dramatic changes under way in retail sales of prescription drugs are forcing pharmaceutical companies to reprioritize their research budgets and rely more on outsourcing and partnership arrangements — and New Jersey must reposition itself to maximize its share of life sciences investments and jobs, according to panelists at the New Jersey International Life Sciences Workforce Summit, held Friday at Princeton University
Dramatic changes under way in retail sales of prescription drugs are forcing pharmaceutical companies to reprioritize their research budgets and rely more on outsourcing and partnership arrangements — and New Jersey must reposition itself to maximize its share of life sciences investments and jobs, according to panelists at the New Jersey International Life Sciences Workforce Summit, held Friday at Princeton University.
U.S. retail sales of prescription drugs are growing at a progressively smaller rate, as is innovation spending, according to Richard Evans, managing director of Sector & Sovereign Research LLC, in Greenwich, Conn.
Domestic prescription drug sales growth fell from 12.8 percent in the decade of the 1980s to 11 percent in the 1990s — and to an estimated 7.2 percent between 2000 and 2010, he said. Innovation spending by pharmaceutical companies is expected to fall from the current 6.4 percent of sales to 4.1 percent in the decade between 2010 and 2020, according to him.
But efforts to find ways to deal with the state's fiscal deficit provide an opportunity "to strategically re-examine our approach to economic development," said Dan Levine, the panel's moderator and principal of MetroCompare LLC, a consulting firm in Scotch Plains specializing in incentives and location consulting.
"The life sciences industry has to be central to that strategy," said Levine, who was assistant treasurer under Gov. Jim McGreevey. "The traditional research model at pharmaceutical companies is facing constraints, and they are adjusting by outsourcing R&D. We have to make sure the outsourcing partners are located in New Jersey."
Paul Chew, chief science officer and chief medical officer at Sanofi-Aventis, in Bridgewater, said his company is "committed in the long term to New Jersey," where it has 3,900 employees, including 1,700 in R&D.
Chew agreed with Levine and other speakers on the threats his industry faces. "Our strategic mission is to transition ourselves away from the traditional pharmaceutical company; we are becoming a global health care company," he said. His company's innovation model is changing from working with limited partners to one that has "embedded external partners and opportunities," he said.
Sanofi-Aventis is finding bigger and faster growing markets in emerging economies, and has recast its business strategy beyond its traditional focus on oncology and diabetes to include aging, fibrosis, inflammation and anti-infective treatments, among others, he said.
Rutgers University could work with pharmaceutical companies in research, technology transfer and commercialization, besides meeting the industry's talent needs, said Michael Pazzani, its vice president of research and professional development. It has strong experience in tapping government research funding, and received $391 million last year, he added.
Pazzani said Rutgers is currently creating an Office of Corporate Partnership to be "a concierge for New Jersey technology companies." The university plans a technology park near its Busch and Livingston campuses that international companies in particular could use as their headquarters and for research activities, he added.
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