Pharma R&D investment tops €29.3 billion
R&D made by the biotechnology and pharmaceutical industry
topped $38.8 billion (€29.3 billion) during 2004. This beats the
$34.5 billion total set in 2003 and demonstrates the steady
increase in R&D over more than two decades, from an estimated
investment of $2 billion in 1980.
The biopharmaceutical industry is the most research-intensive major industry in the US and the country exceeds Europe in biopharmaceutical R&D investment.
According to Pharmaceutical, Research and Manufacturers of America (PhRMA), the $38.8 billion invested in R&D represents a 12.6 per cent increase over expenditures in 2003 and is more than four-and-a-half times the investment in 1990. Of this $38.8 billion, PhRMA member companies spent an estimated $30.6 billion in R&D within the US, and an estimated $8.2 billion in R&D conducted abroad.
As a result of this spending, between 1993 and 2003, the US Food and Drug Administration (FDA) approved more than 363 new medicines, biologics, and vaccines for the prevention or treatment of more than 150 diseases and conditions.
"I am proud that the US biopharmaceutical industry is America's most research-intensive industry and is the world's largest source of investment in discovering better treatments, exceeding the international pharmaceutical industry and the National Institutes of Health."
"The human and economic cost of disease is too high and new medicines are needed to reduce those costs," said PhRMA president and CEO Billy Tauzin.
Pharmaceutical investment in the US has seen it climb to a higher rate of spending than in Europe. Indeed, a report from Cap Gemini Ernst & Young revealed that European countries developed and produced the majority of new pharmaceuticals but its share of new launches on the world market has been steadily declining in recent years.
Between 1990 and 2002, R&D investment in the US rose more than fivefold, while in Europe it only grew 2.5 times. This slow paced investment in Europe means that the European life sciences sector has lost much of its talented workforce to the US where better career opportunities exist.
Between 1997 and 2002 there were 787 foreign investment projects in the European life sciences industry, with the UK and France the top European recipients, notes the report, with Ireland, Germany, Belgium and Spain following close behind.
It shows that the Nordic countries are now well placed to become the 'hotbed' for biotechnology research within the EU, thanks to facilities for R&D, a supportive infrastructure, incentives available for start-ups and close links between universities and commercial companies.
Meanwhile, the complexity of regulatory requirements makes Europe less attractive than the US for life sciences investment. Unlike the US, which has only one regulatory agency for all states, Europe has 15 single regulatory authorities in the current EU and as many as 40 across the whole of Europe.
And the large number of ethics committees across Western Europe also has an impact on the EU as a place for fast drug development. In comparison a multi-centre study in the US requires just one central ethics committee and, where applicable, local ethics committees for individual centres.
EU enlargement brings the opportunity to reduce the 'innovation gap' between the US and Europe. A more attractive and innovative environment that allows European talent to flourish should help to reverse the trend of the EU workforce seeking careers elsewhere.