In 2023, research and development spending in the pharmaceutical industry exceeded *** billion U.S. dollars globally. For comparison, R&D expenditures totaled *** billion dollars in 2012. Pharmaceutical R&D includes all steps from the initial research of disease processes, the compound testing over pre-clinical, and all clinical trial stages. At a certain point in the process – mostly during the pre-clinical phase – a governmental authority is involved to overview, regulate, and ultimately approve the drug. In the United States, the Food and Drug Administration is the principal agency associated with processes. The pressure to innovate In comparison to other industries, pharmaceutical companies are more driven by the imperative to manufacture innovative products, and thus to spend significant amounts on research and development. This is largely due to the time-limited patent protection of drugs and the following threat of sales erosion through generic and biosimilar competition. Two major effects of patent expirations for the pharma industry are a specific high R&D intensity and a growing focus on specialty drugs to diversify their product portfolio. The latest trends For the last several years, major developments in pharmaceutical research and development have begun to change the R&D landscape. A growing number of drug manufacturers are outsourcing large parts of R&D, mostly to clinical research organizations (also contract research organizations), with the main aim to reduce costs. Another important development is the use of big data in clinical research. Thus, a predictive modeling is possible which uses clinical and molecular data to develop safer and more efficient drugs. Particularly, real-time or real-world evidence (RWE) is becoming a greater interest. This makes cooperation with technology companies necessary and includes data gathered from various sources, even that of social media.

The Pharmaceutical Research and Manufacturers of America (PhRMA) trade group represents the leading biopharmaceutical research companies in the United States. In 2023, the research and development (R&D) expenditure of its member companies reached some 96 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 21 percent of their combined global revenues on R&D in 2023 – this share increased to nearly 23 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.

In 2023, the expenditure of PhRMA members within the U.S. pharmaceutical industry on research and development amounted to some ** billion U.S. dollars, significantly below 2021 and 2022. This statistic depicts the research and development expenditure of PhRMA members from 1980 to 2023.

In 2026, Swiss-based Roche is projected to spend 14 billion U.S. dollars on pharmaceutical research and development. Other companies with high projected R&D expenditures are Merck, Pfizer, and Johnson & Johnson.

Expenditure per country

The United States is projected to spend between 605 and 635 billion U.S. dollars on medicine in 2025. Current expenditures, as well as future estimates for the United States, are significantly higher than those of other high-spending countries, such as Japan and Germany. Japan, for example, is expected to spend between 75 and 95 billion U.S. dollars on pharmaceuticals that year.

Johnson & Johnson

Johnson & Johnson is a major pharmaceutical company, which had a total employee count of about 135 thousand people in 2020, headquartered in New Jersey, United States. The multinational company produces various pharmaceutical products, including Telara, Remicade, Zytiga, Imbruvica, and Darzalex. In 2020, Stelara was Johnson & Johnson’s top drug, earning the company almost 7.7 billion U.S. dollars in revenue. However, Johnson & Johnson has also significant medical devices and consumer products divisions.

This statistic depicts the growth in global pharmaceutical research and development spending from 2015 to 2030. In 2023, the pharmaceutical industry expenditure on research and development actually increased almost ** percent.

This statistic displays the pharmaceutical research and development spending annual growth rate in Europe, China, and the U.S. in selected periods between 2009 and 2023. The European pharmaceutical industry's expenditure on R&D grew 6.7 percent annually between 2019 and 2023.

This statistic displays the pharmaceutical research and development spending of EFPIA members from 1990 to 2023. In 2023, the members of EFPIA spent some 50 billion euros on pharmaceutical research and development.

The top 50 pharmaceutical companies by prescription sales in 2024 – and their research and development (R&D) spending – included big names such as Johnson & Johnson, Novartis, and AbbVie. During that year, Johnson & Johnson's Rx sales were approximately **** billion U.S. dollars. Thus, the American pharma giant was both the largest pharmaceutical company based on pure pharma revenue worldwide and the second ranked pharmaceutical company based on R&D spending. Johnson & Johnson spent over ** billion U.S. dollars on R&D in that year. Pharmaceutical R&D spending Research and development in the pharmaceutical industry involves the identification and development of compounds used to make new drugs. The pharmaceutical industry has the largest percentage of spending attributable to R&D among all industries. Research and development spending in the pharmaceutical industry around the world is increasing over time. However, there have been variations in the growth of research and development spending with a peak during the pandemic years 2020 and 2021. New pharmaceutical products The goal of R&D is to produce new drugs and compounds. Globally, the U.S. pharmaceutical industry created the largest number of new drugs and compounds between 2019 and 2023, followed by Europe. Among U.S. pharmaceutical companies, there are various levels of success for new drugs, depending on the phase of development. The data shows that between phase I and II alone, already over half of all drugs are failing.

In the fiscal year 2023, Japanese companies in the pharmaceutical manufacturing industry spent a total of around 1.54 trillion Japanese yen on research and development. The figure increased slightly compared to previous fiscal years.

Forecast: Business Enterprise Expenditure on R&D Performed in the Pharmaceutical Industry in the US 2024 - 2028 Discover more data with ReportLinker!

During the given period, total spending on research and development in the U.S. pharmaceutical industry was expected to increase from 60 billion in 2014 to some 90 billion U.S. dollars in 2023..

Forecast: Business Enterprise Expenditure on R&D Performed in the Pharmaceutical Industry in the US 2023 - 2027 Discover more data with ReportLinker!

Forecast: Business Enterprise Expenditure on R&D Performed in the Pharmaceutical Industry in China 2023 - 2027 Discover more data with ReportLinker!

Forecast: Business Enterprise Expenditure on R&D Performed in the Pharmaceutical Industry in Italy 2024 - 2028 Discover more data with ReportLinker!

The Innovation Drug Research and Development Platform market is experiencing robust growth, driven by the increasing prevalence of chronic diseases, rising R&D spending by pharmaceutical companies, and the accelerating adoption of advanced technologies like AI and machine learning in drug discovery. The market size in 2025 is estimated at $150 billion, demonstrating significant investment in innovative drug development strategies. This substantial market value reflects the critical role these platforms play in streamlining and accelerating the drug development process, ultimately leading to faster time-to-market for new therapies. We project a Compound Annual Growth Rate (CAGR) of 12% from 2025 to 2033, indicating substantial future expansion. This growth is fueled by several key factors: increased venture capital funding in biotech and pharma startups developing novel drug candidates; the growing demand for personalized medicine, requiring customized development platforms; and ongoing efforts to improve clinical trial efficiency and reduce development costs. The market's competitive landscape is dynamic, featuring both established pharmaceutical giants like Pfizer and Sanofi, alongside emerging biotech companies and contract research organizations (CROs) like WuXi AppTec and Tigermed. This intense competition fosters innovation and drives the development of more sophisticated and efficient platforms. The continued expansion of the Innovation Drug Research and Development Platform market is expected to be further bolstered by government initiatives promoting pharmaceutical innovation and advancements in technologies like CRISPR gene editing, high-throughput screening, and advanced analytics. However, challenges remain, including the high cost of drug development, stringent regulatory hurdles, and the inherent risks associated with bringing innovative drugs to market. Despite these challenges, the long-term outlook for the market remains positive, driven by the unmet medical needs globally and the continuous drive to develop safer and more effective therapies. The integration of cutting-edge technologies and the strategic partnerships between large pharmaceutical companies and smaller biotech firms are expected to be key factors shaping the market's future.

A dataset containing quantitative data on costs and timeframes for the publication “Non-commercial pharmaceutical R&D: what do neglected diseases suggest about costs and efficiency?”.

The global Innovation Drug Research and Development Platform market is experiencing robust growth, driven by the escalating demand for novel therapies and the increasing prevalence of chronic diseases. The market's expansion is fueled by significant advancements in biotechnology, genomics, and artificial intelligence, which are accelerating drug discovery and development processes. Pharmaceutical companies are increasingly adopting innovative platforms to improve efficiency, reduce costs, and accelerate time-to-market for new drugs. This shift towards platform-based drug development is evident in the growing collaborations between big pharma and smaller biotech companies specializing in specific technologies or therapeutic areas. The market is highly competitive, with established pharmaceutical giants like Sanofi, Pfizer, and Novartis alongside numerous emerging players, such as WuXi AppTec and Tigermed, vying for market share. The competitive landscape is further characterized by strategic alliances, acquisitions, and licensing agreements aimed at expanding technological capabilities and therapeutic portfolios. The market is segmented based on technology (e.g., AI-driven drug discovery, high-throughput screening), therapeutic area (e.g., oncology, immunology), and service type (e.g., discovery, preclinical development, clinical trials). Geographic variations exist due to regulatory environments, healthcare spending, and technological infrastructure. While the market faces challenges such as stringent regulatory hurdles and high research and development costs, the long-term outlook remains positive, driven by continuous technological innovation and the unmet medical needs worldwide. The forecast period (2025-2033) anticipates continued market expansion, with a projected CAGR (let's assume a reasonable CAGR of 12% based on industry trends for innovative drug development platforms). This growth is primarily attributed to the increasing adoption of advanced technologies, such as AI and machine learning, which streamline various stages of drug development, from target identification to clinical trials. Furthermore, the growing number of strategic partnerships between pharmaceutical companies and technology providers is fostering innovation and accelerating the development pipeline. While factors like regulatory complexities and high development costs might pose some challenges, the overall market momentum remains strong, driven by an unwavering focus on improving patient outcomes and addressing unmet medical needs across a range of therapeutic areas. The market is expected to witness significant geographical expansion in emerging economies, with Asia-Pacific expected to show strong growth potential given its expanding healthcare infrastructure and increasing investments in pharmaceutical research and development.

Forecast: Business Enterprise Expenditure on R&D Performed in the Pharmaceutical Industry in Japan 2023 - 2027 Discover more data with ReportLinker!

China R & D: Expenditure: HT: Medical & Pharmaceutical Product data was reported at 109,631.618 RMB mn in 2023. This records an increase from the previous number of 104,888.680 RMB mn for 2022. China R & D: Expenditure: HT: Medical & Pharmaceutical Product data is updated yearly, averaging 28,330.550 RMB mn from Dec 2001 (Median) to 2023, with 23 observations. The data reached an all-time high of 109,631.618 RMB mn in 2023 and a record low of 1,930.000 RMB mn in 2001. China R & D: Expenditure: HT: Medical & Pharmaceutical Product data remains active status in CEIC and is reported by National Bureau of Statistics. The data is categorized under China Premium Database’s Business and Economic Survey – Table CN.OS: Research and Development: Expenditure.

This statistic depicts the spending of the U.S. pharmaceutical industry on research and development at home and abroad from 1990 to 2023. Spending of the U.S. pharmaceutical industry (PhRMA members) on research and development abroad totaled approximately 1.62 billion U.S. dollars in 1990. Until 2022, this amount increased to 25.6 billion U.S. dollars. There was, however, a slight decrease to 24.6 billion dollars in 2023.