The pharmaceutical industry leads the world in R&D investment: it now exceeds 200 billion a year

Aerospace and defence investment is eight times higher than in the aerospace and defence industry, seven times higher than in the chemical industry, and twice as high as in the IT industry.

A report by the International Federation of Pharmaceutical Industries predicts that investment will continue to grow by more than 4% a year in the coming years.

New therapies for hepatitis B and HIV and the development of mRNA technology, some of the most significant advances in the last year


The pharmaceutical industry now spends more than 200 billion euros a year on R&D, making it the industrial sector that spends the most money on research and development in the world. This is highlighted by the International Federation of the Pharmaceutical Industry (Ifpma) in its annual report Facts and Figures 2022: The Pharmaceutical Industry and Global Health, which explains the contribution that this sector makes every year to health, well-being and the global economy.

Specifically, according to the study, pharmaceutical companies dedicated a total of 198,000 million dollars (201,000 million euros at the current exchange rate) to R&D activities in 2020 (the last year with official figures). This amount represents a much higher investment than in other high-tech sectors. The report notes that R&D investment in the pharmaceutical industry is up to 8.1 times higher than that of the aerospace and defence industry, 7.2 times higher than that of the chemical industry and 1.2 times higher than that of software and computer services companies.

Moreover, this investment is sustained over time and growing steadily. The report highlights that global R&D spending in the pharmaceutical sector has grown at an average annual rate of 4.7% between 2012 and 2020 and is forecast to grow at a rate of 4.2% between 2020 and 2026. This projected growth rate will bring the pharmaceutical industry’s R&D investment to $254 billion by 2026, a 28% increase on current investment.

The International Pharmaceutical Industry Federation highlights in the report the reasons why this sector needs to invest so much and for so long in order to obtain results. It points out that the cost of developing a new drug is currently around $2.6 billion and that it is an obstacle course. On average,” the study notes, “researchers identify a promising compound from among 5,000-10,000 selected compounds. Researchers then extensively test the compound to ensure its efficacy and safety, a process that can take 10-15 years for both a drug and a vaccine.

“These data demonstrate that, beyond our role in the fight against Covid-19, the pharmaceutical industry is one of the most innovative sectors in the world and underline our industry’s continued commitment to improving the quality of people’s lives. Our industry is working on innovations that are transforming healthcare and addressing unmet medical needs. Today, our scientists are discovering the new treatments that will transform the lives of future generations,” says Ifpma CEO Thomas Cueni.

More than 3,000 drugs in cancer research

The analysis also highlights some of the fruits of this continued investment in R&D for new medicines. As recently published by the European Federation of the Pharmaceutical Industry (Efpia), there are currently more than 8,000 drugs in clinical trials worldwide, 10% of them for rare diseases. Now, Ifpma details that among the drugs under investigation by the pharmaceutical industry, most are cancer treatments (3,148), followed by drugs in the area of immunology (1,677), neurology (1,668) and infectious diseases (1,488).

In addition to these medicines in development, there are “many promising success stories already in the pipeline,” says the report, which cites the progress made in the past year in the treatment of hepatitis B and HIV as examples. “These new therapies have been shown to eradicate the virus from infected cells, saving patients from lifelong treatment.

Among the latest milestones achieved by the industry, the report also highlights the development of mRNA technology. Decades of trials have led to the development of this new technology that has been instrumental in Covid-19 vaccines and may now be a life-saving therapy for patients with aggressive forms of brain cancer, it notes.

“The future is uncertain, but it will be better for everyone as long as our industry continues to overcome the barriers of science,” says Cueni.



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