The world’s leading 30 pharmaceutical companies spent a combined $112 billion
on research and development (R&D) in 2013, an increase of $723 million over
the previous year, according to research and consulting firm GlobalData.
The company’s report states that Roche was the R&D spending leader,
outlaying nearly $10 billion in 2013. Meanwhile, Novartis and Johnson &
Johnson (J&J) increased their R&D spend the most between 2012 and 2013,
with each adding around $500 million to their respective clinics. Novartis’
R&D spending grew by 5.6% to $9.8 billion, and J&J spent $8.2 billion,
which was up by 6.8% from 2012.
Adam Dion, an Industry Analyst with GlobalData, says that the increase in R&D spending was partly due to drug makers advancing their pipeline programs into later-stage clinical trials, which are generally more costly.
Adam Dion, an Industry Analyst with GlobalData, says that the increase in R&D spending was partly due to drug makers advancing their pipeline programs into later-stage clinical trials, which are generally more costly.
Dion comments: “Roche’s R&D spending was bolstered by continued
investments in its oncology and neuroscience therapeutic areas, such as the
company’s investigational anti-PD-L1 antibody targeting lung cancer, and the
advancement of its programs for Alzheimer’s disease.
“Novartis’ R&D spending grew largely due to its Alcon subsidiary, which
allocated additional resources to R&D to develop new eye care products. The
company’s Vaccine and Diagnostics products business invested heavily to bring
to market its meningitis B vaccine, Bexsero.”
Despite the sector increase in R&D spending, a number of large
pharmaceutical firms pulled back on clinical investment in 2013.
The analyst explains: “In efforts to improve profit margins, cost-cutting still remains a strategic necessity for some players. Many companies reduced their workforces to help stabilize profits in the aftermath of patent losses.
The analyst explains: “In efforts to improve profit margins, cost-cutting still remains a strategic necessity for some players. Many companies reduced their workforces to help stabilize profits in the aftermath of patent losses.
“Pfizer shaved over $1.2 billion in R&D spend after losing market
exclusivity on Lipitor and Caduet, while Merck continued with its multi-year
restructuring program, cutting over $600 million from its clinical operations
in 2013 after its respiratory therapy Singular saw its patent lapse.”