Reporter's Handbook: Key Industry and PhRMA Facts

Key Industry and PhRMA Facts

Research and Development (R&D)
Time to develop a drug = 10 to 15 years
Development CostsAverage cost to develop a drug
(including the cost of failures)
Early 2000s = $1.2 billion
Late 1990s = $800 million
Mid-1980s = $320 million
1970s = $140 million
R&D Spending by PhRMA Members
Year | PhRMA Member Spending
2013 $51.1 billion (est.)
2012 $49.6 billion
2011 $48.6 billion
2010 $50.7 billion
2009 $46.4 billion
2008 $47.4 billion
2007 $47.9 billion
2006 $43.4 billion
2005 $39.9 billion
2000 $26.0 billion
1990 $8.4 billion
1980 $2.0 billion

Percentage of Sales That Went to R&D in 2013
Domestic R&D as a percentage of domestic sales = 22.7%
Total R&D as a percentage of total sales = 17.8%

Economic Impact of the Biopharmaceutical Sector
Direct jobs = More than 810,000 in 2011 
Total jobs = About 3.4 million in 2011 (including indirect and induced jobs, most recent data)

  • Medicines approved 2001-2013 = more than 400
  • In the 30 years since the Orphan Drug Act was established, more than 450 orphan drugs have been approved
  • Only 2 of 10 marketed drugs return revenues that match or exceed R&D costs

Medicines in Development

  • Medicines in development with the potential to aid U.S. patients = 400
  • Potential first-in-class medicines in clinical development globally = 70%
  • Biologic medicines in development = More than 900

Value of Medicines

  • Cancer: Since 1980, 83% of life expectancy gains for cancer patients are attributable to new treatments, including medicines.
  • Cardiovascular Disease: According to a 2013 statistics update by the American Heart Association (AHA), death rates for cardiovascular disease fell a dramatic 33% between 1998 and 2009.
  • HIV/AIDS: Since the approval of the antiretroviral treatments (ART) in 1995, the U.S. AIDS death rate has dropped by more than 80%. Today, 20-year-olds diagnosed with HIV can expect to live into their early 70s—a life expectancy close to that of the general population.

Generic share of market
2000: 49%
2013: 86%

About PhRMA
The Pharmaceutical Research and Manufacturers of America represents the country’s leading biopharmaceutical research companies, which are devoted to inventing medicines that allow patients to live longer, healthier and more productive lives. PhRMA companies are leading the way in the search for new cures. PhRMA members alone invested an estimated $51.1 billion in 2013 in discovering and developming new medicines. 
PhRMA is headquartered in Washington, D.C., and also has offices in Albany, Atlanta, Baton Rouge, Boston, Denver, Indianapolis, Olympia, St. Paul, Sacramento, Amman and Tokyo.
The association is governed by a 31-member board of directors. There are two categories of membership in PhRMA:

A corporation, subsidiary or division of a company with operations in the United States that is predominantly engaged in the research, manufacturing and marketing of innovative finished dosage prescription pharmaceutical or biological medicines.

Associates shall be persons, partnerships, corporations, or subsidiaries, divisions or units thereof, not eligible for membership as defined above, and not subsidiaries or divisions of or owned by a company engaged in the manufacture or marketing of finished dosage form pharmaceutical or biological products, who are:

Engaged in research and development (significantly engaged, for profit, in biological research on their own behalf directly related to the development or production of ethical pharmaceutical or biological products for the cure, alleviation, mitigation, treatment or prevention of disease).

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