THE FUTURE OF LIFE SCIENCES IN NEW JERSEY:

PUBLIC POLICY CHALLENGES AND OPPORTUNITIES

ISPE NJ Supplier Showcase 2013September 12, 2013

Dean J. ParanicasPresident and Chief Executive OfficerHealthCare Institute of New Jersey

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NJ-based trade association for research-based life sciences companies

25 members, including many of the world’s largest biopharmaceutical and medical technology companies

WHAT IS HINJ?

Represents the life sciences in Washington and Trenton

Advocacy organization promoting patient access, innovation and industry-NJ economic synergy

HINJ

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Working together with labor leaders and elected officials

to pursue policies that protect patients around the world while

PROTECTING JOBS HERE IN NEW JERSEY

WWW.HINJ.ORG

WHAT IS HINJ?

Industry’s economic impact on NJ

Business model and market forces

A competitive playing field

Need for a vibrant “Innovation Ecosystem”

TODAY’S PRESENTATION 4

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“MEDICINE CHEST OF THE WORLD”

NJ/NY one of nation’s largest life sciences clusters

Life sciences is NJ’s largest industry sector

13 of world’s top 20 biopharmaceutical companies

11 of world’s top 20 medical technology companies

Industry nerve center global, North American or US HQ’s or significant presence

LIFE SCIENCES IN NEW JERSEY

6DRIVING NEW JERSEY’S ECONOMY

NEW JERSEY’S LIFE SCIENCES $24.2 billion economic impact* 51,000+ full-time employees* 60,000 indirect jobs* $8.4 billion in R&D spending* $8.1 billion in purchasing from NJ

vendors** $700 million in capital construction* $161 million in contributions to NJ

charities* $961 million in taxes and rebates paid

in NJ* 501 biopharma products in

development* 79 med tech new product applications*

* Source: 2011 HINJ Economic Impact Report** Source: We Work for Health 2012

Why New Jersey?

Opportunities to collaborate with each other Most talented life sciences workforce in the

world Multiple research universities Access to capital markets Transportation hub: world-class airport, ports,

surface transportation Comprehensive and specialized vendor

support Communities of interest Quality of life

DRIVING NEW JERSEY’S ECONOMY 7

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More than 5,000 vendors located throughout NJ

Represent 60,000 spin-off jobs in NJ* Purchase more than $8.1 billion worth of

goods and services annually** Organized into New Jersey Life Sciences

Vendors Alliance (NJLSVA) – Approximately 700 members

* Source: 2011 HINJ Economic Impact Report** Source: We Work for Health 2012

DRIVING NEW JERSEY’S ECONOMY – LIFE SCIENCES VENDORS

www.njlifesciencevendoralliance.org

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75% of health-care spending for chronic disease

Medicine represents 10.1% of the cost of health care

84% of all prescriptions are for generics medications

Medication non-adherence costs $300 billion per year

MARKETPLACE DYNAMICS

5/5,000 compounds enter a clinical trial

ONLY 1/5 approved for market

10-15 years and $1.5 billion to develop and commercialize drugs

Patent clock starts from compound discovery

RESEARCH AND DEVELOPMENT

$50 billion spent on R&D IN 2011 $8.4 billion spent in NJ

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Evolving industry business model• Financial constraints• Consolidation• Changing dynamics

New Jersey’s continued visibility as a life sciences leader• Increasing competition for

industry investment

Volatile political environment

Perception of industry as a “cash cow”• Plug federal budget gaps• Absorb revenue reductions

“NEW REALITY” INDUSTRY DRIVERS

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Sequestration

Medicare Part D Rebates

IPAB

Importation

ACA Implementation

FDA

Key National Issues

THE INDUSTRY’S FUTURE

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Intense competition from other states/countries for life sciences investment (a highly coveted industry)

 Where will the industry invest its next dollar(s)?

New Jersey? California? Massachusetts? North Carolina? Ireland? Singapore?

SUSTAINING NEW JERSEY’S LEADERSHIP

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HINJ works closely with NJ’s federal and state lawmakers to ensure an attractive US and NJ investment climate

Adverse impacts on life sciences disproportionately affect NJ due to industry concentration (e.g., Medicare Part D rebates, medical device tax)

SUSTAINING NEW JERSEY’S LEADERSHIP

Building New

Jersey’s “Innovation Ecosystem”

15SUSTAINING NEW JERSEY’S LEADERSHIP

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Life Scienc

es

* Source: Jones Lang LaSalle “Life Sciences Cluster Report,” 2011

“Innovation Ecosystem”

SUSTAINING NEW JERSEY’S LEADERSHIP

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Why is Restructuring New Jersey Health Sciences Education Important?

“New Jersey must develop a structure to foster better collaboration between its businesses and its institutions of higher education. With better cross-pollination between public and private research, New Jersey’s economy could launch more creative entrepreneurship and more beneficial commercialization.”

─Report of the Governor’s Task Force on Higher Education-Dec. 2010

RESTRUCTURING NEW JERSEY HEALTH SCIENCES EDUCATION

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WHAT’S INVOLVED?

RESTRUCTURING NEW JERSEY HEALTH SCIENCES EDUCATION

Rutgers Biomedical and Health Sciences

From UMDNJ

From Rutgers

Cancer Institute of New Jersey

Graduate School of Biomedical Sciences

New Jersey Medical School Rutgers School of Dental

Medicine (formerly New Jersey Dental School)

School of Health Related Professions

School of Nursing School of Public Health University Behavioral

Health Care Robert Wood Johnson

Medical College of Nursing Ernest Mario School of

Pharmacy Institute for Health, Health

Care Policy and Aging Research

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CHALLENGES OPPORTUNITIES Rutgers’

attractiveness as a partner

Convincing companies to choose Rutgers

Integration hurdles

Enhanced competitiveness

Jobs and economic growth

More innovative new products

IMPLICATIONS FOR NEW JERSEY

RESTRUCTURING NEW JERSEY HEALTH SCIENCES EDUCATION

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KEY TAKEAWAYS

The outlook:PROMISING

NJ continues to be a leader in the life sciences

Life sciences is NJ’s most important industry sector

Industry investment in NJ is continuing

State is taking necessary measures to compete

Higher ed restructuring holds great promise for NJ’s life sciences

Federal issues will be carefully monitored

IN CONCLUSION…

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Questions/Discussion