The pharma industry allows the US to weather economic storms--props up state economies, makes up 5% of GDP and is key to supporting stable US employment.

The innovative and critical nature of the U.S. biopharmaceutical industry with its significant societal and economic value has long been a key driver of the nation’s economic growth and contributor to state and regional economies. As this study documents, every U.S. state, the District of Columbia, and Puerto Rico has some level of industry employment leading to regional economic activity. The biopharmaceutical industry is a major driver of innovation and economic growth both within the U.S. and globally. The industry’s growth and resilience lead to jobs for significant numbers of highly skilled, highly productive, and highly paid workers across the country. Sustaining this important driver of the U.S. economy is a set of robust and long-standing pro-innovation policies that include strong intellectual property protections, a well-functioning and evidence-based regulatory system, support for research and development, and other policies that recognize both the societal and economic impacts of medical innovation. The Pharmaceutical Research and Manufacturers of America (PhRMA) engaged TEConomy Partners, LLC, to develop an independent estimate of the economic contributions of the U.S. biopharmaceutical industry and its closely integrated supply chain in 2022. The analysis includes estimates for the United States, each of the 50 states, the District of Columbia, and Puerto Rico. A full methodology is included in Appendix A. Key findings from this examination of the broad biopharmaceutical value-chain include the following: • The U.S. biopharmaceutical industry directly employed more than one million workers in 2022, and with its substantial employment multiplier of 4.69, the industry supports more than 3.8 million additional U.S. jobs for a total employment impact of more than 4.9 million jobs supported across the U.S. economy. • The industry has been able to weather economic downturns, demonstrated by solid 30.8% growth since 2015, providing important stability to both the production of life saving medicines and to the U.S. and regional economies in which it operates. • With average annual wages and benefits in 2022 of more than $157,000 per worker —over $60,000 more than the average U.S. manufacturing job, and more than twice the U.S. average across all industries—biopharmaceutical industry jobs are both high-wage and high-quality. • The research and productive nature of the U.S. biopharmaceutical industry generates a productivity level of more than $402,000 per employee in 2022—more than twice that of the U.S. average manufacturing worker and more than three times the average U.S. worker. Executive Summary 1 • A notable characteristic of the U.S. biopharmaceutical industry’s workforce is the reliance on highly skilled, occupationally diverse workforce as the industry employs more than 100,000 workers in each of four occupational categories: Management (163,085), Life, Physical, and Social Science (146,274), Production (140,707), and Business and Financial Operations (102,786). • The U.S. biopharmaceutical industry exceeded $800 billion in direct output in 2022, and with the ripple effect of this production throughout the U.S. economy, supported an additional $850 billion in output through its suppliers and other sectors of the economy, for a total of more than $1.65 trillion. This combined, total output impact represents 3.6 percent of all U.S. output. • Through its research, production, and overall operations, the U.S. biopharmaceutical industry directly accounts for 1.6 percent of U.S. GDP (i.e., its “value added”). Including the economic activity driven in other sectors of the economy the industry generates and supports more than $880 billion in value added within the economy, or 3.4 percent of U.S. GDP. Biopharmaceutical Industry’s Contributions to the U.S. Economy 0.5% 1.1% 1.6% 1.7% 2.4% 2.8% 3.4% 3.6% Employment Labor Income Value Added Output Biopharmaceutical Industry Direct Share of U.S. Total Total Industry Supported Share of U.S. Total Source: TEConomy data, calculations and analysis; IMPLAN U.S. model. 2 Introduction: The Innovative Biopharmaceutical Industry Among U.S. industries, the biopharmaceutical industry is defined by and stands out as a leader in research and innovation. Nowhere was this more apparent than in the last few years as the nation’s biopharmaceutical industry members worked to develop critical vaccines, therapies, and diagnostic capabilities related to the COVID-19 pandemic. However, these capabilities did not develop overnight in response to pandemics but were the reflection of a unique industry driven by innovation that has been investing in this ability for many years. With its high levels of investment in R&D, multi-sectoral structure, significant employment, and broad occupational requirements, the U.S. biopharmaceutical industry brings significant employment and economic impacts to every state in the nation. To measure the size and extent of the U.S. biopharmaceutical industry, PhRMA engaged TEConomy Partners, LLC, to develop an independent estimate of the size of the U.S. biopharmaceutical industry and its total economic impacts on the U.S. and individual state economies (including the District of Columbia and Puerto Rico).