The recently released study, “Comprehensive measurement of biopharmaceutical R&D investment,” provides an insight into the scale and complexity of R&D investment within our industry. This analysis, which encompasses both public and private companies at various stages of development, offers a transparent and replicable measure of R&D investment in 2021.
The total global R&D investment in the biopharmaceutical sector for 2021 was estimated at $276 billion, significantly higher than previous estimates that often focused solely on the largest public companies. This investment was spread across 4,191 companies, with commercial-stage companies accounting for the lion’s share at 74% of the total investment. Notably, the top 20 companies by revenue contributed 50% of the R&D investment, underscoring the important role of industry leaders in fuelling innovation.
One of the most striking revelations from the study is the intensity of R&D investment, which globally stands at 27% of revenue and a remarkable 34% in the United States. These figures surpass previous estimates and reflect a robust commitment to innovation within the industry.
The study also highlights the substantial contribution of development-stage companies, which dedicated $73 billion to R&D, representing 26% of the total investment. This significant investment by smaller companies, often overlooked in traditional analyses, is a testament to the dynamism and diversity of the biopharmaceutical R&D landscape.
At a time when the cost of developing a new drug is staggering, and the attrition rates remain high, let’s not lose sight of the long-term benefits of sustained R&D investment.
Chandra, A., J. Drum, M. Daly, H. Mirsberger, S. Spare, U. Neumann, S. Martin and N. Kirson (2024). “Comprehensive measurement of biopharmaceutical R&D investment.” Nat Rev Drug Discov.
