Employment in the biosciences sector is growing at a faster clip in Western New York than in Upstate New York and the state as a whole, fueled by strong performance locally in the areas of biomedical research, medical testing and drug distribution, an economic-impact analysis by an industry trade group found.
The industry employs more than 7,400 people in the region, up 4 percent over the most recent five-year period, and supports more than 77,000 jobs here, producing a $5.6 billion total economic impact, according to the MedTech Association’s 2014 Bio/Med Industry Report.
The biosciences sector is a focus of economic-stimulus efforts in Buffalo Niagara and in Albany, with the state investing tens of millions of dollars to boost drug development and biomedical research here.
But the industry faces challenges, too, from a decline in federal research funding, rapid changes in health care technology and new regulations in the Affordable Care Act.
“There’s budgetary pressures, regulatory pressures, the shift to a value-based health care model – this perfect storm of trends that’s really causing our companies to have to look internally and change how they innovate,” Jessica Crawford, president of MedTech, which represents the state’s biosciences companies, said in an interview Thursday in Buffalo.
The wide-ranging industry includes companies that make biomedical equipment and supplies, manufacture and prepare medical drugs, produce vaccines and conduct lab testing. Key area bioscience companies include Baxter International, which manufactures infusion pumps at a plant in Medina, and Greatbatch, the medical device and pacemaker battery maker, which has facilities in Clarence and Alden.
“We have a steady supply of highly skilled, highly motivated, very dependable, very hard workers,” Nelson Patterson, a Baxter vice president, said in the MedTech report.
MedTech includes Niagara, Erie, Chautauqua, Cattaraugus and Allegany counties as Western New York, leaving out Baxter’s 550 New York workers from the local total.
The 234 bioscience companies in the five local counties employed 7,464 workers in 2012, among 28,591 workers across upstate and 74,557 throughout New York, MedTech reported.
Between 2007 and 2012, while Western New York saw the number of bioscience jobs rise by 4 percent, upstate saw a drop of 4 percent and New York overall saw a drop of 2 percent. Jobs in the industry remained flat nationwide over that period.
Statewide, gains in the research and testing lab sectors were offset by steeper job losses in medical devices and pharmaceuticals, as those sectors felt the sting the recession.
In addition to strong showings in contract biomedical research and lab testing, the Western New York region also employs more biochemists and biophysicists than the national average, Crawford said.
Bioscience jobs are valued because they pay more than jobs in other industries. The average biomedical job in Upstate New York pays nearly $71,900, roughly $30,000 more than the $41,373 average private-sector job, according to Battelle’s technology partnership practice, a contributor to the report.
MedTech found that every bioscience job in Western New York supports an additional 1.7 jobs at vendor or supply-chain companies, with 21,768 workers directly or indirectly tied to the industry here, earning $1.3 billion in total compensation.
“That’s an extremely high multiplier, so you get a bigger bang for your buck related to the biosciences versus most industries,” Crawford said.
The bioscience industry pulls in billions of dollars in research and development funding, as well, and New York inventors received 6,400 bioscience patents between 2009 and 2013.
But the decline in federal R&D funding makes initiatives such as the state’s Buffalo Billion even more valuable, said Crawford, who wants to see the program expanded statewide.
Further, bioscience companies are having to reinvent themselves in the face of new regulations featured in the Affordable Care Act, including a fundamental reshaping of the health-care payment model and a tax on medical-device makers. Other changes, such as the increasing adoption of electronic health records, present challenges and opportunities for MedTech members, Crawford said.