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A new study, conducted by researchers at Johnson & Johnson, Harvard University and Analysis Group, highlights the magnitude of biopharmaceutical investment in research and development (R&D) and its profound impact on advancing medicines for patients — both in the U.S. and abroad. These findings underscore the critical role biopharmaceutical companies play in driving the transformational innovations that change how we fight and prevent disease to help solve the biggest health care challenges the U.S. faces.
Here are key takeaways:
- Biopharmaceutical companies are investing in R&D on an immense, global scale. The study indicates that global biopharmaceutical R&D investment is significant, totaling $276 billion across 4,191 global companies in 2021. This analysis provides a more comprehensive view of R&D investment than existing estimates, accounting for both publicly traded and privately owned companies, and for companies that don’t yet have a product on the market and those with at least one approved product.
- The biopharmaceutical industry spends a larger share of its revenues on R&D than any other industry.
- This study puts that share at more than a third (34%) in the U.S., significantly higher than commonly cited estimates of 20-25%.
- U.S.-based biopharmaceutical companies lead the global research race.
- Nearly half (48%) of all global biopharmaceutical companies are headquartered in the U.S., developing life-saving innovations at our doorstep every day.
- U.S.-based biopharmaceutical companies are responsible for nearly twice as much R&D investment as companies based in all the countries of Europe combined, with companies headquartered in the U.S. contributing 55% of worldwide R&D investment compared to 29% for companies headquartered in Europe.
The industry-driven R&D contributions outlined in the report fuel continued innovation and medical breakthroughs for patients, underscoring why we need commonsense policies. These policies include robust intellectual property protections, science-based regulatory agencies and payment and reimbursement that rewards innovation and patient-centric solutions.
U.S. biopharmaceutical companies are at the forefront of developing transformational medicines and vaccines that change patients’ lives, lower health system costs and contribute to a healthier society. Just take what transformational innovation has done for hepatitis (HCV) treatment savings: since curative medications for HCV were approved in 2013, Medicaid has saved an estimated $15 billion in avoided health care costs — and cumulative savings are expected to reach $43 billion by 2026. Meanwhile, childhood vaccines — another cost-effective intervention for fighting disease — have prevented over one million early deaths and can prevent 18 dangerous or deadly diseases.
We need to protect the research and development process and reinforce the spirit of innovation and leadership that allows us to do the impossible today and in the future.
Andrew Powaleny
Andrew Powaleny is the Deputy Vice President of Public Affairs at PhRMA, where he leads communications on scientific, regulatory and intellectual property issues, highlighting the biopharmaceutical industry’s efforts in developing innovative medicines and vaccines while promoting an environment that encourages necessary risk-taking. For five years starting in 2019, he launched and led PhRMA’s grassroots initiative, Voters for Cures, bringing patients and caregivers together to advocate for access to medicine and biopharmaceutical innovation. He also co-founded and co-chaired PRIDE Umbrella, a resource group for LGBTQ+ individuals. Prior to joining PhRMA in 2015, Andrew worked as a communications consultant in Washington, D.C., and as Deputy Press Secretary for the U.S. House Committee on Energy and Commerce under Chairman Fred Upton. He holds a degree in public policy and government from Eastern Connecticut State University, with a minor in music. Outside of work, Andrew enjoys exercise, musical theater and mentoring college students through The Fund for American Studies alumni association.
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