Biopharmaceutical industry has huge impact in region
Research area strong but not production
Life sciences and medical research firms and institutes account for almost 5 percent of all the economic activity in the Buffalo Niagara region, according to an industry-backed study released Thursday.
But while the report showed that the growing biopharmaceutical industry is an expanding source of scientific and medical research, industry officials also said more needs to be done to position the region so it can cash in when those new drugs and other products move into production.
"New York is very, very good on the research side, but where a lot of the impact comes from on the economic development side is in the manufacturing," said Nancy Bergsteinsson, a director at Archstone, the Connecticut-based consulting firm that did the study.
"It's a place where ideas can incubate. The next step is how do you create an environment where these can be developed commercially," she said. "A lot of the products that are developed in the state are sold to other companies" and produced elsewhere.
The study found that the biopharmaceutical industry accounted for nearly $2 billion in economic activity in the region, based on 2006 data. The industry accounted for more than 4,600 jobs in the region and contributed indirectly to another 6,200 positions. That's slightly less than 5 percent of the overall economic activity in the region, which the U.S. Bureau of Economic Analysis pegged at $41 billion in 2006.
"We are a vital part of the engine in Western New York," said Candace S. Johnson, the deputy director of Roswell Park Cancer Institute, which alone employs more than 1,000 in its research activities.
The industry is home to 42 biopharmaceutical companies and institutes, from small firms that are trying to develop new drugs, like Cleveland Biolabs and Kinex Pharmaceuticals, to research institutes like Roswell Park Cancer Institute and the University at Buffalo's Center for Excellence in Bioinformatics.
Those entities are working on 30 new drugs, said Nathan Tinker, the executive director of the New York Biotechnology Association, one of the study's sponsors.
"We do really well at basic research. We do really well at developing early stage companies," Tinker said. "But when they get to about 20 people, they flee the state."
Tinker blames the state's high taxes and uncompetitive business costs, in part, for driving biopharmaceutical companies out of New York when the time comes to begin production. He also says the state's disclosure rules for drug companies are too far-reaching.
Instead, New York should move to take advantage of its large pool of qualified college graduates, which gives companies a ready supply of potential workers, by offering lucrative incentives and preparing the needed infrastructure so drug firms can move quickly into production at a competitive cost once they complete the long process to obtain regulatory approval, he said.
Some of the drugs now being developed by local companies may not be approved for use for another five years, but Tinker said it's important for the region to have the infrastructure in place when those drugs are ready to move into production.
"Help us create a landscape that is conducive to the development of these drugs," Tinker said.
"Experience here at UB and at Roswell shows how it can be done right," said Assemblywoman Francine Del Monte, D-Lewiston. "We must accelerate our efforts to compete with Massachusetts and California."
Despite the state's budget crisis, Del Monte said New York must do more to help biopharmaceutical companies commercialize their new drugs and products. She supports offering those companies incentives to increase their investment here, such as a research and development tax credit, as well as incentives for so-called "angel investors" who provide funding for fledgling firms.
e-mail: drobinson@buffnews.com
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