Economic Impact
The Biopharmaceutical Industry Boosts the U.S. Economy
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.
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.
Explore all fact sheets at the Industry Economic Impact page for the entire U.S., the 50 states, the District of Columbia and Puerto Rico on this map or download the full report on the 2022 Economic Impact of the U.S. Biopharmaceutical Industry.
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Economic Impact
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Creating jobs
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.
Overall Economic Contribution
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% of all U.S. output.
Although just a snapshot of the sector’s total impact, these findings demonstrate the importance of a strong and vibrant biopharmaceutical industry in helping other businesses grow and contributing to robust local and national economies.
Through its research, production and overall operations, the U.S. biopharmaceutical industry directly accounts for 1.6% 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% of U.S. GDP.
STEM
In an increasingly competitive global environment, it is critical that the U.S. strengthen its standing in science, technology, engineering and math (STEM) education to stay ahead of other countries, like China and Singapore, in order to continue create more high-wage research and development (R&D) and advanced manufacturing jobs in the U.S. and sustain and grow the economic contributions of R&D-intensive industries like the innovative biopharmaceutical sector. The U.S. biopharmaceutical sector is the envy of the world supporting a total of nearly 4.5 million jobs across the economy, and contributing $1.2 trillion in economic output when direct and indirect effects are considered in the U.S. alone.
The U.S. currently faces a growing gap in STEM skills compared to countries such as Japan, China, and parts of Europe, which are making substantial public investments in STEM education and other key areas of competitiveness, including growing their R&D, manufacturing, and other infrastructure investments. As an industry rooted in science and innovation, the biopharmaceutical industry is particularly concerned about the current shortage of highly-skilled workers in the U.S., a gap that is expected to grow substantially over the next decade leading individual biopharmaceutical companies to deepen their commitment to improving the state of STEM education at all levels in the U.S.
Enhancing Today’s STEM Workforce to Ensure Tomorrow’s New Medicines, reveals how innovative biopharmaceutical companies and their foundations are partnering with colleges and universities to foster the next generation of STEM workers. According to the report, biopharmaceutical companies and their foundations have partnered with 53 individual colleges and universities in support of 75 educational programs emphasizing hands-on, experiential learning through a focus on industry-relevant curricula. These partnerships are happening at all levels of the postsecondary pipeline from various certification and associate’s programs though master’s and doctoral programs and worker training programs.
Related Resources
Vaccines: A high-return investment for Americas health and our nations economy
Vaccines: A high-return investment for America’s health and our nation's economy
Vaccines are one of the best tools we have to keep Americans healthy and prevent serious illness, hospitalizations and deaths. In doing so, routine immunizations not only help protect Americans’ health but also reduce health care costs, support a more productive workforce and strengthen the nation’s economy.
Vaccines
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The Biopharmaceutical Industry’s Sustained Commitment to Inspiring and Advancing Tomorrow’s STEM Workforce
Research finds strong linkages between STEM-intensive industries and desirable innovation and economic outcomes, including the creation of high-growth, high-quality jobs with bright career prospects; new inventions as reflected in patent filings; the development of vibrant technology-driven startups; and ultimately, sustained economic growth and global competitiveness. The innovative biopharmaceutical industry demonstrates these characteristics by leveraging STEM talent throughout every aspect of a medicine’s life cycle, and with a STEM workforce concentration more than five times that of other industries. Yet despite the recognition of the critical role of the STEM workforce to the nation’s innovation economy and growth and amid calls to bolster the country’s manufacturing capacity, the U.S. continues to lag behind other countries in terms of STEM literacy and expertise. Recognizing these challenges, the biopharmaceutical industry has made a significant, sustained commitment to enhancing the nation’s STEM education and talent pipeline by inspiring and developing the next generation of scientists, engineers, and technology professionals. PhRMA member companies have dedicated significant resources to these pursuits and are reaching an impressive, nationwide scale.
The Biopharmaceutical Industry’s Sustained Commitment to Inspiring and Advancing Tomorrow’s STEM Workforce image
STEM
Report