This article investigates the role of labor mobility and geographical proximity in the knowledge diffusion process in the US biopharmaceutical industry. The application of social network analysis to patent authorship reveals that labor mobility and co-inventorship are responsible for a large portion of knowledge flows. This finding provides support for recent studies that called into question the notion that technical and commercially valuable knowledge ubiquitously disseminates in high-technology industrial agglomerations, indicating instead that such an explanation is only partially true. Results also suggest that high quality inventions draw (proportionally) more from nonlocal knowledge sources and that network connections are more important for the transmission of knowledge for high quality patents than for low quality patents. The substantial concentration of local knowledge flows suggests that industrially targeted public financial support for research and development activities at the regional and state levels can be considered as supportive of firm performance and by extension economic development.