Barbara Buono claims New Jersey has lost half its pharma jobs to other high-tax states

New Jersey’s pharmaceutical industry is suffering from some aches and pains.

Thousands of industry jobs have disappeared from the Garden State, according to state Sen. Barbara Buono, who discussed the issue during her Jan. 28 appearance on NJTV’s NJToday.

"New Jersey has lost over half of our pharmaceutical jobs to states you know, not low-tax states like in the South, but high-tax states like New York," said Buono (D-Middlesex), who also is running for governor.

Buono’s claim is largely correct.

Let’s look at what’s going on here before addressing where any jobs have gone.

Buono spokesman David Turner said Buono’s statement refers to New Jersey’s percentage of pharma jobs nationwide lost since 1990. Accordingly, we reviewed U.S. Bureau of Labor Statistics data to compare state and national numbers from December 1990 to December 2012.

New Jersey had 42,300 pharma jobs in December 1990. The nation had 210,400. So New Jersey’s share was 20.1 percent.

In December 2012 New Jersey had 28,100 pharma jobs, compared with 275,100 nationally. That means the state’s share was 10.2 percent.

So Buono is close to her claim that New Jersey lost "more than half" its pharma jobs.

Next, let’s review where the lost New Jersey pharma jobs are going.

James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University in New Brunswick, said New Jersey has lost life sceinces jobs largely because the industry has a new business model for a new type of research and drug development.

"Pharma is putting its cutting edge facilities near university centers of excellence in the life sciences, such as Cambridge, Bay Area, San Diego, etc.," Hughes said in an e-mail. "They want to be in interactive environments, not in insulated suburban facilities. This is the new business model for bio-based drug development. NJ specialized in chemical based drug development. The environments that pharma now wants are all high tax and high cost environments. They are willing to pay any price to be near centers of research excellence, leading scientists, and the leading hospitals for clinical trials."

Dean J. Paranicas, president and CEO of the HealthCare Institute of New Jersey, a trade association that represents the life sciences industry, said infrastructure, government support and high-tech capabilities at higher education institutions also are factors.

"New Jersey is in competition with every state regardless of its tax structure because the life sciences industry is a highly coveted one," Paranicas said.

Mergers among major pharma companies are another reason for the smaller workforce in life sciences.

Within the past few years, Manhattan-based Pfizer bought Madison-based Wyeth; Merck merged with Schering-Plough and cut 15 percent of its workforce; and Roche has moved some jobs to both California and New York City.

A 2011 report from the state Labor Department points out that the recession, cost-cutting measures and expiration of patents also factored into industry job losses.

"Senator Buono attributes this trend to many factors including the Governor’s unwillingness to fully fund our education system and lack of leadership in creating research partnerships similar to other states," Turner said in an e-mail. "Pharmaceutical companies are moving to states with equally high taxes but provide more funding for research and development. In places such as California, Massachusetts, and New York, companies are clearly attracted to the concentration of well-regarded universities that have forged partnerships with private industry."

Hughes and Paranicas said the merger of Rutgers, Rowan and the University of Medicine and Dentistry New Jersey is important for the industry’s needs in high-tech research.

Our ruling

Buono said during a recent appearance on NJToday that "New Jersey has lost over half of our pharmaceutical jobs to states you know, not low-tax states like in the South, but high-tax states like New York."

She’s correct that New Jersey has lost pharma jobs, but it’s not the "more than half" that she claimed.

Jobs have been lost for a variety of reasons, from the industry’s new business model to wanting to be near universities and hospitals of excellence, and more.

We rate this claim Mostly True.

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