Research and Development

Research & Development Policy Framework

We are in a new era of medicine where breakthrough science is transforming care and our approach to treating patients. Robust investment in research and development (R&D) by biopharmaceutical companies is resulting in advances and discoveries unlike anything we’ve seen before. The application of genomics to develop personalized medicines is enabling physicians to tailor treatments to the unique needs of the patient, and immunotherapies are harnessing patients’ own immune systems to fight off various conditions, including cancer and rare diseases.

Since 2000, PhRMA member companies have invested more than $1.1 trillion in the search for new treatments and cures, including $102.3 billion in 2021 alone. While these investments continue to build upon previous medical advances, they are just beginning to yield results on the latest breakthroughs, opening the door to entirely new ways to tackle some of the most complex and difficult to treat diseases of our time.

For more than 30 years, the U.S. biopharmaceutical industry has been the world leader in the development of new medicines, and PhRMA member companies continue to be at the forefront. The entire U.S. biopharmaceutical invested an estimated $122 billion in R&D in 2020.

America’s biopharmaceutical sector is the most R&D-intensive industry in the U.S. economy. In fact, the biopharmaceutical industry invests on average six times more in R&D as a percentage of sales than all other manufacturing industries.

The biopharmaceutical industry has also made a significant, sustained commitment to enhancing the country’s STEM education and a diverse talent pipeline by inspiring and developing the next generation of scientists, engineers and technology professionals. Thanks to biopharmaceutical industry support, the industry has supported over $200 million in last five years for STEM programs and over 7 million students have been reached by industry-sponsored STEM programs.

The progress we see today is revolutionizing how we diagnose, treat and cure disease, saving patients’ lives and improving quality of life across a broad range of chronic and rare conditions. In this new era of medicine, many diseases previously regarded as deadly are now manageable and potentially curable. Today, there are more than 8,000 medicines in clinical development around the world. Across the medicines in the pipeline, 74% in clinical development have the potential to be first-in-class treatments, representing entirely new approaches to treating a disease. The future has never been brighter as researchers explore new frontiers that just a few years ago may have been regarded as science fiction, but now transform patients’ lives.

Progress toward New Medicines and Vaccines

The biopharmaceutical industry utilizes its scientific and industrial expertise to build on and advance basic science research into safe and effective treatments and vaccines that can be made available to patients. The biopharmaceutical industry is uniquely positioned to take on the necessary risk to advance research into safe and effective treatments. For example:

On average, it takes 10-15 years and costs $2.6 billion to develop one new medicine, including the cost of the many failures.
Only 12% of new molecular entities that enter clinical trials eventually receive U.S. Food and Drug Administration (FDA) approval.
Approximately 7,000 rare diseases exist today yet only 5% have an available treatment.
Nearly 260 vaccines are in the biopharmaceutical pipeline to treat and prevent disease including dozens for COVID-19.
The decades-long investments biopharmaceutical companies have made in new technologies, research and previous vaccines have prepared the industry to act swiftly, without cutting corners, to respond to the COVID-19 pandemic.

Committed to Research

In 2017, PhRMA furthered its commitment to the development of new treatments and cures by establishing new R&D requirements for its member companies. All of PhRMA’s member companies now meet the following criteria:

A three-year average global R&D to global sales ratio of 10% or greater; and
A three-year average global R&D spending of at least $200 million per year.

PhRMA member companies have invested nearly $1 trillion dollars in R&D since 2000, establishing the biopharmaceutical sector as the most R&D-intensive industry in the U.S. economy. In fact, the biopharmaceutical industry invests on average six times more in R&D as a percentage of sales than all other manufacturing industries.

Through investment in R&D, biopharmaceutical researchers and scientists have gained a better understanding of diseases and a greater ability to harness new scientific advances, leading to tremendous progress in the development of treatments and cures for some of the most debilitating diseases patients face.

Updated as of September 30, 2021