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American biopharmaceutical manufacturing: Fueling economic growth now and for years to come

Nicole Longo   |     December 21, 2020   |   SHARE THIS

As the world has grappled with the current pandemic, there has been increased focus on biopharmaceutical manufacturing and its global supply chain. Many wondered whether the biopharmaceutical industry could ensure continued and uninterrupted supply of innovative medicines relied on by so many Americans, as well as develop and supply new treatments and vaccines to address the pandemic. We are nearly a year into this public health crisis, and the biopharmaceutical manufacturing industry has stepped up to help beat COVID-19 in more ways than one. A new report from TEConomy Partners takes a closer look at what makes the U.S. biopharmaceutical manufacturing industry so globally competitive. While highlighting U.S. leadership, the report also makes clear the critical steps needed to secure that leadership: addressing the gaps in infrastructure investments, as well as investing in the growth of a STEM workforce.

The robust presence of the biopharmaceutical industry in the United States results in significant economic contributions that fuel the entire U.S. economy. The industry has a large geographic footprint, with more than 1,300 manufacturing facilities spread across the United States. And for every direct employee – more than 800,000 – the industry supports another four jobs indirectly through vendors and suppliers and through the purchases of industry employees. As a result, the industry supports, in total, more than 4 million U.S. jobs. Looking at biopharmaceutical manufacturing specifically, the report explains, “The vast supply chain of other manufacturers and service providers accounts for more than 1.42 million of these jobs.”

The U.S. biopharmaceutical manufacturing industry is also a global leader when it comes to innovation because of pro-innovation policies in the United States. In 2017, 83% of the top 20 medicines sold in the United States were made here. But the industry’s innovation isn’t limited to medicines. The industry has also been implementing advanced manufacturing innovations that are changing the way we produce medicines – enabling companies to improve the process for building and scaling up manufacturing in the future.

However, the report also highlights that to remain globally competitive, this U.S. leadership must be secured with the types of investments that ensure our nation does not fall behind. For example, there are significant gaps in investment in the U.S. infrastructure compared to other countries that disincentivize continued growth in the United States. Many other countries continue to make significant public investments, coupled with other incentives, that offset the costs related to infrastructure, including building and operating new facilities. Without similar programs in the United States, this leaves the biopharmaceutical industry in our nation at a significant disadvantage to other nations when it comes to costs for labor, energy, raw materials and other critical cost components. To continue to recognize the full economic benefits of biopharmaceutical manufacturing in the United States, policymakers should look for ways to expand collaborations between the public and private sectors tied to innovative biomanufacturing technologies. They should also look for ways to encourage the capacity investments needed to support innovation in manufacturing processes and technologies, including green manufacturing technologies, and drive job growth in the United States.

Additionally, while pro-innovation policies have helped to drive U.S. global leadership thus far, the report’s finding on the STEM workforce in the United States make clear that the current STEM skills gap and the resulting lack of access to a robust STEM workforce is hindering further growth of the U.S. biopharmaceutical industry and will have significant negative impacts to future innovation. The paper notes, “The STEM skills gap is estimated to leave 2.4 million positions unfilled in the U.S. between 2018 and 2028, with a potential economic impact of $2.5 trillion.” To address this significant shortfall, policymakers should support increased investments in growing the pipeline of STEM workers and close the STEM skills gap between the United States and other countries.

We cannot take U.S. biopharmaceutical global leadership for granted. Policies that would mandate massive changes in manufacturing supply chains or policies that would undercut intellectual property rights, for example, would threaten the U.S. biopharmaceutical industry’s competitive edge. The current pandemic has demonstrated just how important it is to have a strong biopharmaceutical industry and the value of carefully built, resilient global supply chains to ensure patients in the United States and around the world have ongoing access to medicines. This new report charts a path forward for U.S. policymakers that will further strengthen the U.S. biopharmaceutical industry’s ability to respond to any potential future public health crisis.

Read the full paper here.

Nicole Longo

Nicole Longo Nicole is senior director of public affairs at PhRMA focusing on Medicare, 340B, importation and more. She previously worked for a D.C.-based public affairs firm where she assisted a wide range of clients with communications efforts on everything from trade policy to agriculture policy to health care policy. Outside the office, Nicole can be found trying new restaurants (usually Italian), taking an occasional barre class and cheering on the Cincinnati Bengals.

Topics: Economic Impact, Manufacturing, STEM, Coronavirus

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