The Pharmaceutical Research and Manufacturers of America (PhRMA) trade group represents the leading biopharmaceutical research companies in the United States. In 2022, the research and development (R&D) expenditure of its member companies reached some 101 billion U.S. dollars worldwide.
How much does the pharmaceutical industry spend on R&D relative to revenue?
The development of a new drug costs around 2.6 billion U.S. dollars and can take up to 15 years. In relation to sales, the pharmaceutical sector invests more money in R&D than many other industries: PhRMA members spent 19 percent of their combined global revenues on R&D in 2022 – this share increased to nearly 21 percent when only considering the sales and R&D expenditure from the domestic market of the United States.
Charting the rise of R&D expenditure
Founded in 1958, PhRMA is headquartered in Washington, D.C. and has offices located around the United States. The group’s members collectively invested two billion U.S. dollars into the research and development of medicines worldwide in 1980, but by the start of the 21st century, this figure had increased to around 26 billion U.S. dollars.
Research and development expenditure of total U.S. pharmaceutical industry from 1995 to 2022
(in billion U.S. dollars)
This statistic was assembled from several editions of the same report.
Including PhRMA and non-PhRMA members until 2010.
* Figure for total pharma estimated.
** No data available for total pharma since 2011.
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PhRMA. (August 21, 2023). Research and development expenditure of total U.S. pharmaceutical industry from 1995 to 2022 (in billion U.S. dollars) [Graph]. In Statista. Retrieved June 18, 2024, from https://www.statista.com/statistics/265085/research-and-development-expenditure-us-pharmaceutical-industry/
PhRMA. "Research and development expenditure of total U.S. pharmaceutical industry from 1995 to 2022 (in billion U.S. dollars)." Chart. August 21, 2023. Statista. Accessed June 18, 2024. https://www.statista.com/statistics/265085/research-and-development-expenditure-us-pharmaceutical-industry/
PhRMA. (2023). Research and development expenditure of total U.S. pharmaceutical industry from 1995 to 2022 (in billion U.S. dollars). Statista. Statista Inc.. Accessed: June 18, 2024. https://www.statista.com/statistics/265085/research-and-development-expenditure-us-pharmaceutical-industry/
PhRMA. "Research and Development Expenditure of Total U.S. Pharmaceutical Industry from 1995 to 2022 (in Billion U.S. Dollars)." Statista, Statista Inc., 21 Aug 2023, https://www.statista.com/statistics/265085/research-and-development-expenditure-us-pharmaceutical-industry/
PhRMA, Research and development expenditure of total U.S. pharmaceutical industry from 1995 to 2022 (in billion U.S. dollars) Statista, https://www.statista.com/statistics/265085/research-and-development-expenditure-us-pharmaceutical-industry/ (last visited June 18, 2024)
Research and development expenditure of total U.S. pharmaceutical industry from 1995 to 2022 (in billion U.S. dollars) [Graph], PhRMA, August 21, 2023. [Online]. Available: https://www.statista.com/statistics/265085/research-and-development-expenditure-us-pharmaceutical-industry/