The future of the life sciences industry is in New York
State. “Life Sciences" is defined as companies in the fields
of biotechnology, pharmaceuticals, biomedical technologies, life systems
technologies, biomedical devices and organizations and
institutions that devote the majority of their efforts in
the various stages of research, development, technology
transfer and commercialization. Life sciences firms are
moving beyond traditional industry boundaries to create new
health care solutions for patients and providers. By
combining life sciences' core technologies (diagnostics,
devices and drugs) in innovative ways, firms are creating
new technology platforms and products that offer
improvements in safety, effectiveness, convenience and
value. These convergent solutions also are providing life
sciences companies with new avenues for innovation, growth
According to a survey in the July 2006 issue of Business Facilities Magazine, New York State is ranked first in the nation for biotech growth. This science represents a formidable force in the 21st century and New York State is at the forefront of cutting-edge research and developments.
As a world leader in the life sciences industry, New York State remains the destination of choice for many high-profile biotechnology, pharmaceutical and medical manufacturing companies, such as:
- Acorda Therapeutics
- Aureon Laboratories
- Albany Molecular Research
- Bausch & Lomb
- Bristol-Myers Squibb
- Cleveland BioLabs
- Enzo Biochem
- Forest Labs
- J&J's Ortho-Clinical Diagnostics
- Johnson & Johnson
- UCB Celltech
- Welch Allyn
- The pharmaceutical industry consists of drug manufacturers and biotechnology companies, plus the distribution and wholesale companies that handle the products. This industry is concentrated solely on medicinal and biological compounds. The main part of the industry is composed of drug companies who make prescription, generic and over-the-counter drugs for medical or veterinary use.
- Biotechnology companies differ from traditional drug companies in that their work consists of using biological knowledge to manipulate living cells, animals or plants. Biotech is sometimes referred to as a “first cousin” to pharmaceuticals; many biotech companies serve as first-stage Research and Development (R&D) arms of pharmaceutical companies. The biotech field itself is unique in that the industry is not defined by its products, but by the technologies used to make those products.
- The discovery and development of new medicines is an expensive and time-consuming process. The research-based pharmaceutical sector in the United States is the single largest global player in the research and development of new drugs, both in terms of new drugs brought to market and R&D expenditures. According to PhRMA, an industry association, total spending on R&D by U.S. drug firms reached $43 billion in 2007. Pharmaceutical companies rely on patent protection to provide an opportunity to recover their R&D investments.
- Until recently, pharmaceutical research was focused primarily on curing life-threatening or severely debilitating illnesses. But a current generation of drugs, commonly referred to as “lifestyle” drugs, is transforming the pharmaceutical industry. Lifestyle drugs target a variety of medical conditions, ranging from the painful to the inconvenient, including obesity, impotence, memory loss and depression.
- The drug industry has a promising future. With an aging population consuming three times as many drugs as younger people, demand is expected to rise and opportunities to increase. Drug spending is expected to triple from 2000 to 2050. Many new drugs are expected to be developed in the coming years. Advances in technology and the knowledge of how cells work will allow pharmaceutical and medicine manufacturing makers to become more efficient in the drug discovery process.
Medical Technology Industry
- The medical technology industries are part of New York State’s larger biomedical or life science cluster.
- With about $190 billion in annual sales ($105
billion of which is in the U.S.), the worldwide medical
technology industry develops, manufactures and
distributes a wide range of products used to improve
patient health. The industry comprises two main sectors:
Medical Technology Products – the industry’s most profitable sector, typically targeting small patient populations with high technology products that carry significant risk of product obsolescence.
Conventional Hospital Supply – comprises largely commodity-type products.
- Hundreds of small and mid-size specialty medical technology companies operate in the U.S. and throughout the world. U.S. medical technology manufacturers garner nearly half of their revenues in international markets (primarily in Europe and Japan). Demographic trends, both in the U.S. and in many international markets, are expected to continue to contribute significantly to industry growth over the next few decades. R&D spending varies significantly among medical technology manufacturers. Companies that primarily manufacture conventional hospital supply items usually make minimal R&D investments, while those that develop cutting-edge, high-tech devices typically maintain the highest R&D levels. The investment in R&D by the medical technology industry more than doubled during the 1990s and now stands at more than 4 times the average for manufacturers overall. Nearly all of this research is privately funded. Venture capital firms remain an important funding source for start-up medical technology companies.
- Controlling how drugs are delivered is a huge business. Until the biotech age, drugs were generally comprised of small chemical molecules capable of being absorbed by the stomach and passed into the blood stream—drugs that were swallowed as pills or liquids. Many new drug delivery techniques that provide an alternative to needles are in development.
- For more information on the Medical Technology industry, please visit www.medtech.org.
In addition, New York State offers a host of resources
and incentives for businesses in the life sciences area. The
State's high-tech infrastructure boasts an abundance of
Academic Centers and Research Institutions – According to the National Science Foundation’s Division of Science Resources Statistics, New York State is ranked second in the nation for academic research and development expenditures at nearly $3.5 billion and ranked second in the number of scientists and engineering doctorates awarded in 2005 at 2419. In 2005, New York State was ranked third nationwide for the number of grant awards provided to its research institutions at 4,898 and a value of $2.72 billion, according to the National Institute of Health.
Hospitals and Medical Research Institutions – New York State is a preeminent center for health care and medical research and plays a key role in the international medical technology industry. With a high concentration of hospitals, medical research institutions, and leading surgeons and physicians who pioneer new practices and procedures, New York State serves as a major base for clinical trials of medical technology products.
World-class Workforce – New York State is home to many of the world's preeminent surgeons, physicians, scientists and a skilled, high-tech workforce. According to a study commissioned by the Biotechnology Industry Organization in 2004, New York State had more than 33,000 biological scientists in the workforce, the second highest among states.
To induce job creation and investment, New York State offers a variety of tax incentives for business.
There are several credits of particular interest to the Life Sciences industries, including:
- Research and Development (R&D) Tax Credit. Investments in R&D facilities are eligible for a 9% corporate tax credit. Additional credits are available to encourage the creation and expansion of emerging technology businesses, including a three-year job creation credit of $1,000 per employee and a capital credit for investments in emerging technologies.
- Emerging Technologies – New York State has enacted various tax incentives for Qualified Emerging Technology Companies (QETCs), with particular focus on small emerging technologies and the investments they make in qualified research costs.
- New York City Biotechnology Tax Credit – For taxable years beginning in 2010, 2011 and 2012, a refundable credit is available against qualified research expenses for biotechnology firms.
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