As competition between life science companies intensifies, traditional markets – especially those in the Unites States – are beginning to see secondary markets catch up. Suburbs are becoming more and more popular for companies as rents increase and specialized labor talent demand higher wages. Additionally, countries like Brazil, China and India are beginning to dominate relocation efforts as the global market grows.
Despite traditional premier markets such as Boston, Raleigh-Durham-Chapel Hill and San Francisco still drawing the most talent and the most money, clusters in emerging areas are poised to rapidly gain shares in generic drugs, biosimilars, medical devices and often-neglected drugs for rare conditions. According to JLL’s fourth annual Life Science Outlook Report, generic drugs alone – which stand near $45 billion – are positioned to makes leaps in global market share due to international focus on cost controls. Further, as the U.S. sees many of our known chronic conditions move to developing nations, the need for these generics grows exponentially.
Findings from the JLL Annual Report indicate:
- Average annual salaries for those in the life sciences rose 6% between 2011 and 2014 in the U.S. To employ the best scientists, organizations have to think about following the talent, but that means finding ways to cut costs in other areas such as land and buildings, which often means looking to new geographic regions.
- Small and mid-sized biopharma firms are experiencing M&A at unprecedented rates. Between revenue struggles to produce the next blockbuster drug and regulatory impact of the Affordable Care Act (ACA), larger firms are having to look to diversify portfolios and create high-impact drugs.
- Emerging markets, especially international regions, allow companies to grow at a lower cost, but also come with regulatory and infrastructure challenges. However, as GDP in Asian countries grows along with aging populations, there is often extra support for new market entrants.
- A growing middle class in countries such as Indonesia, Mexico, India and China are creating new avenues, growing demand and a potentially strong future market for medical devices, generic drugs and investments into the life sciences industry.
- Domestically, the states with the most FDA drug approvals in the pipeline are New Jersey (20%), California (17%) and Massachusetts (13%). It can therefore be expected that an influx of people for research, production, distribution and commercialization will continue in these areas.
- Biosimilars are continuing to have strong growth and approval around the world. While Europe led the way, China’s market has become one of the worlds soundest due to the aging population, low insurance rates and approval processes that are less restrictive than those in the U.S. This will also likely occur in countries like Russia as the government places limitations on imported drugs.
- Countries are creating income tax exemptions in geographic areas that support an influx of entrepreneurs and corporations – large and small. For example, pharma entrepreneurs in Turkey do not have to pay income taxes until 2023, attracting investors, researchers and developers from oversees.
