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74 Doing Business in Connecticut | 2014 Industry sPOtLIGHt › By Aaron Boyd W hile Connecticut's bioscience companies employ less than 0.7 percent of the state's workforce (12,761 direct jobs in a labor force of more than 1.86 million), the deceptively small industry leaves a surprisingly large economic footprint. According to research in the 2013 Economic Impact of the U.S. Biopharma- ceutical Industry, a report commissioned by Pharmaceutical Research and Manufacturers of America (PhRMA), the bioscience sector outperformed the state average in economic output by more than 300 percent in 2011, generating $689,086 per employee compared to the state average of $167,570. Overall, Connecticut's bioscience com- panies generated more than $8.9 billion in value directly; however the report also claims the industry stimulated an additional $7.7 billion in indirect output through vendors and companies that supply support services. One of the companies that supplies support services to larger drug and medi- cal device manufacturers is Norwalk-based International HealthCare. IHC is what's known in the industry as a CRO, or contract research organization. IHC and its 12 full-time employees and 20 contractors support bio-pharma compa- nies in the drug and medical device develop- ment process, according to Jonathan Wong, a clinical research assistant at IHC. "If they need aid in developing a prod- uct to get it through the different phases of the clinical trial, we help with all aspects of that," Wong said, noting that IHC can assist companies at any point along the development process, from initial research, to gathering data through clinical trials, to final report writing that gets submitted to the FDA. Wong said IHC's founder selected Fairfield County because many of its clients were located in the tri-state area (Connecti- cut, New York and New Jersey). However, today the company also does business with companies based around the world. CROs are increasingly be- ing used by Big Pharma because of the very high costs of bringing a drug to market. "It takes an enormous amount of money to bring a drug from idea to market," CURE Bioscience Growth Council Chairman Dr. Paul Pes- catello explained, putting the average cost in the $1 to $2 billion range. "If an IT company has an idea, it will probably cost a lot less money to bring that idea to market — and that's good for the IT world," he said. However, when it comes to pharmaceuticals and other bioscience research, that large upfront cost becomes a boon for the local economy. According to We Work for Health, self-described grassroots advocates for the biopharmaceutical sector, 17 of Connecti- cut's top bioscience companies had substan- tive contracts with a total of 4,365 vendors in 2011, which billed almost $1.2 billion to the industry. "Much of that funding is generated out of state" through venture capital and federal grants, Pescatello pointed out, and almost all of it will be spent in state during the devel- opment of the new drug. "UPS has an entire division dedicated to transporting very sensitive samples," CURE President and CEO Dr. Susan Froshauer said, though she sees data analysis as the real growth area for support services. "ere's an opportunity for folks who know how to process complex data and figure out what it means and if there are pat- terns there," she said. While the industry employs less than 13,000 people directly, PhRMA's economic impact report estimates another 45,297 support sector jobs, including vendors and suppliers, as well as construction workers and daycare centers. "It's the multiplier effect of pharma," Pes- catello said, also noting that salaries tend to be considerably higher in the bioscience field. According to PhRMA's impact report, employees of Connecticut's bio-pharma companies make an average of 151 percent more than the state average. e average for the bioscience industry is $167,629, whereas the state average is $66,724. Connecticut companies paid out approximately $2.1 billion in salaries in 2011, according to the same report, as well as $60 million in state taxes and $401 million to the IRS. q Blockbuster Business CT's bioscience industry is worth $8.9B Bio-Pharma ' It takes an enormous amount of money to bring a drug from idea to market. ' —Paul Pescatello, chairman of the Bioscience Growth Council at CURE PHOTO/© LUCHSCHEN | DREAMSTIME.COM