PhRMA member companies’ robust investment in research and development (R&D) has led to advances and discoveries that are transforming health care and our approach to treating patients for a broad range of chronic and rare conditions, as well as urgent new health challenges like COVID-19.
From new data released today, in 2020 alone, PhRMA member companies invested $91.1 billion in R&D, the highest level of investment on record, according to the 2021 PhRMA member annual survey. The survey also found that in 2020, approximately one out of every five dollars of revenue was devoted to R&D – among the highest R&D intensity ratios of all industries – and that PhRMA member company R&D spending accounts for most of the estimated $102 billion spent by the entire U.S. biopharmaceutical industry on R&D in 2018, the latest figure available.
Over the past two decades, member companies invested a grand total of more than $1 trillion in the research and development of new and better medicines. These biopharmaceutical companies are at the heart of a robust R&D ecosystem that has led to the development of innovative treatments and cures for patients, with more on the horizon:
- The U.S. Food and Drug Administration (FDA), through the Center for Drug Evaluation and Research and the Center for Biologics Evaluation and Research, approved 58 novel medicines in 2020, including two new medicines to treat Ebola, new treatments for rare neurodegenerative and inflammatory conditions affecting children, and a gene modified cell therapy for a rare form of lymphoma.
- Among potential medicines in clinical development, 74% are potentially first-in-class, meaning they represent an entirely new way of treating a medical condition.
- There are currently more than 1,300 new medicines and vaccines in development to treat cancer, potentially adding to the tremendous gains already realized. The United States has witnessed a 31% decline in cancer death rates since peaking in the early 1990s. Researchers attribute 73% of these outcomes to new treatments, including new medicines.
Recent reports have shown a significant amount of R&D devoted to addressing unmet needs, including more than 800 medicines in development for diseases that disproportionately affect racial and ethnic communities and nearly 90 medicines in development against drug-resistant infections.
The complex R&D enterprise is the foundation for the 4 million jobs the biopharmaceutical sector supports throughout the economy, including the 125,000 biopharmaceutical researchers working tirelessly to develop new treatments and cures. The U.S. biopharmaceutical sector at large accounts for roughly one-sixth of total domestic R&D spending by U.S. businesses, the single largest share of all U.S. business R&D.
Thanks to our member companies’ continued investment in R&D, we are closer every day to discovering the next lifesaving advance to benefit patients.
To read the annual PhRMA member survey, click here.
Tim McClung
Tim is a director of policy & research at PhRMA.
Tim McClung
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PhRMA member companies’ R&D investments reach record high of $91.1 billion in 2020
Research and Development
Economic Impact
PhRMA Member Company
PhRMA member companies’ R&D investments reach record high of $91.1 billion in 2020
PhRMA member companies’ R&D investments reach record high of $91.1 billion in 2020