R&D Spending by US Pharma and Biotech Firms Reaches Record High

April 3, 2008
Patricia Van Arnum
ePT--the Electronic Newsletter of Pharmaceutical Technology

US pharmaceutical and biotechnology research companies invested $58.8 billion in research and development in 2007, according to analyses by the Pharmaceutical Research and Manufacturers of America and Burrill & Company.

Washington, D.C. (Mar. 24)-US pharmaceutical and biotechnology research companies invested $58.8 billion in research and development (R&D) in 2007, according to analyses by the Pharmaceutical Research and Manufacturers of America (PhRMA) and Burrill & Company (San Francisco). This R&D level was a record amount, and an increase of nearly $3 billion from 2006.

PhRMA-member companies spent an estimated $44.5 billion on pharmaceutical R&D last year, up from the previous record of $43.4 billion in 2006, according to the PhRMA survey. The Burrill & Company analysis shows that non-PhRMA pharmaceutical research companies in the United States spent an estimated $14.3 billion on R&D last year, compared with $12.7 billion in 2006.

Although the rate of R&D growth was slower than in prior years, research spending as a percentage of sales remained high. Over the past seven years, US pharmaceutical research companies have invested around 18% of sales on R&D.

More drug candidates are in the pipeline. There are more than 2700 drugs in development in the US; five years ago, there were about 2000.