Print“Despite facing market, scientific, and regulatory challenges, the U.S. biopharmaceutical sector–led by our member companies—has remained a major contributor to American innovation.”
As the world’s top drugmakers looked to new business models and external sources to shore up their innovation portfolios, and ways to do more with less, their investment in innovation remained fairly level with the previous year.
The Pharmaceutical Research and Manufacturers of America, a trade group that includes many of the world’s biggest drugmakers, reported that its members spent $49.5 billion on research and development in 2011, slightly below the $50.7 billion spent by the group in 2010. The data was compiled from the 2012 PhRMA annual membership survey of its 28 full members.
As a group, total R&D spending came to 16.7 percent of total global sales, making biopharmaceuticals one of the most research-intensive industries in the United States, according to a recent report by the National Science Board of the National Science Foundation. In the United States, R&D expenditures among PhRMA members represented 21.1 percent of domestic sales.
“Despite facing market, scientific, and regulatory challenges, the U.S. biopharmaceutical sector–led by our member companies—has remained a major contributor to American innovation,” says John Castellani, PhRMA president and CEO. “Our member companies’ investment represents a boost to America's economy, with 78 percent of those dollars invested on our shores.”
Although there is concern that R&D is increasingly moving offshore, PhRMA members—U.S.-owned companies and U.S.-based divisions of foreign companies—reported that 80 percent of their R&D dollars, or $40.1 billion, were spent in the United States in 2010.
At the same time, PhRMA noted the benefits that have been achieved by the industry, specifically making once deadly diseases into chronic conditions. This includes an 83 percent reduction in HIV-AIDS death rates since 1995, a three-year increase in survival rate overall for cancer patients, and a 31 percent reduction in deaths due to cardiovascular disease between 1998 and 2008.
PhRMA says there are more than 3,200 investigational compounds in development today compared with just more than 2,000 in development ten years ago. Close to 1,000 target cancer and 460 target rare diseases.
Biopharmaceutical research companies are using their greater understanding of the molecular and genetic basis of disease to develop more targeted therapies and personalized medicines, and are building on the benefits associated with partnerships among experts throughout the research ecosystem.
Last year alone, 35 new molecular entities received U.S. Food and Drug Administration approval, including two personalized medicines for cancer, 11 new medicines for patients with rare diseases, the first new medicine for lupus since 1955, and two medicines that are the first in a new class to treat hepatitis C.
Still, it takes 10 to 15 years to develop a new drug cost at a cost approaching $1.2 billion, according to Tufts University Center for the Study of Drug Development. Biopharmaceutical companies will have to be extremely creative to remain profitable. Castellani notes that its members are “adapting to a changing research paradigm” through diverse collaborations and partnerships with experts from across the healthcare spectrum, including academia, government-funded research, and other biopharmaceutical companies.
April 13, 2012
http://www.burrillreport.com/article-rd_spending_for_drug_giants_drops_to_49_5_billion_in_2011.html
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