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Stem Cell Research Initiative Could Result in Substantial Economic Benefits, Rutgers Report Indicates

October 31, 2005

Examining the components that would most likely be attributed directly to Acting Gov. Richard Codey's proposed $380 million Stem Cell Research Initiative, a Rutgers University study finds that, potentially, the state stands to benefit from an estimated $1.4 billion in new economic activity, approximately 20,000 new jobs, and $71.9 million in new state revenue over the next 20 years.

The authors of the study identify six areas of economic benefits to the state, including the economic impact of public expenditures; savings in health care costs; work time and productivity savings; retention and expansion of the biotechnology industry; and royalty payments to the state. The analysis is dependent upon several variables and the largest uncertainty is whether the current promise of stem cell research will actually yield effective therapies, the authors note.

To analyze how the proposed initiative will affect retention and expansion of the biotechnology and pharmaceutical industries, the authors provide data from the Economic Censuses of 1997 and 2002. The censuses offer measures for the pharmaceutical and medicine industry in terms of establishment, total receipts (sales revenue) and employment. Three scenarios are then examined with respect to the possible effects of the stem cell research initiative on the biotechnology industry in New Jersey.

The study does not calculate all the benefits estimated for the three components of the $380 million initiative, the authors note. Instead, the intent is to identify them as important and substantial effects of stem cell therapies and to estimate the scale and scope of the benefits that New Jersey would realize should effective therapies be implemented on a wide scale. According to the report, the public policy issue is whether New Jersey will be a significant partner in the larger international research effort seeking effective therapies.

Earlier this month, Gov. Codey signed an executive order creating a public umbilical cord and placental bank for use in stem cell research. According to the governor's office, New Jersey is the first state in the nation to create such a bank with public support.

Under the order, the Department of Health and Senior Services (DHSS) will undertake an educational campaign to inform expectant mothers about the opportunity to donate. The ultimate goal is the creation of two pilot programs where the donations can be stored and processed for research. In addition, DHSS will work with the Elie Katz Umbilical Cord Blood Program and the New Jersey Coriell Institute for Medical Research to develop a plan to make placental and umbilical cord blood units widely available for stem cell research throughout the state.

The Economic Benefits of the New Jersey Stem Cell Research Initiative is available at: http://policy.rutgers.edu/stemcell.pdf. The executive order is available from the governor's website at: http://www.state.nj.us/governor/

Links to this paper and more than 1,000 additional TBED-related research reports, strategic plans and other papers can be found at the Tech-based Economic Development (TBED) Resource Center, jointly developed by the Technology Administration and SSTI, at http://www.tbedresourcecenter.org/.

New Jersey