Top 10 pharma companies by R&D spend

Tech companies may get all the glory for cranking out new gadgets every year, but several pharma companies are spending close to as much on innovation. In fact, both Roche and Johnson and Johnson are among the companies that are the top 10 R&D spenders across all industries in the U.S.

Investments in new drug treatments are also growing. According to a report by Evaluate Pharma, R&D spending climbed by 5 percent in 2019, and among the top 11 pharma companies reached a total of $77.6 billion. 

Although Roche, J&J and Merck continue to lead the list of R&D spenders in terms of total dollars, the picture looks slightly different when viewed as a percentage of sales or revenue. On average, pharma companies spend about 17 percent of their revenue on R&D. 

And although oncology and gene therapies have dominated the focus of R&D efforts in recent years, substantial investments in coronavirus treatment and vaccine could have an impact after this year.

Here are the top R&D companies from 2019 according to Evaluate:

Eli Lilly

R&D spend as a percentage of sales: 27.86 percent
Total R&D investments: $5.6 billion

In raw terms, Eli Lilly is one of Big Pharma’s lowest spenders on R&D, but as a percentage of its sales, it tops the list. Last year, the company acquired Loxo Oncology for $8 billion (the biggest buyout in its history), signaling a shift to more innovation investments.

Bristol-Myers Squibb

R&D spend as a percentage of sales: 23.4 percent
Total R&D investments: $5.89 billion

BMS struck one of 2019’s biggest M&A deals when it snatched up cancer and inflammatory disease specialist Celgene for $74 billion, which will help boost its R&D profile. Celgene has become a juggernaut in pharma R&D and in 2018 spent a whopping 37 percent of its revenue on innovation investments (the largest percentage in the industry), according to GlobalData. 

AstraZeneca

R&D spend as a percentage of sales: 22.92 percent
Total R&D investments: $5.32 billion

Sales of several key oncology drugs, such as the blockbuster Tagrisso, have helped buoy AZ’s budget for R&D. Although the company nixed a few research projects aimed at oncology last year, AZ is still one of the market’s leading cancer researchers, with 190 unique cancer products, according to data from Informa Pharma Intelligence. 

Roche

R&D spend as a percentage of sales: 21.33 percent
Total R&D investments: $10.29 billion

Another leader in oncology, Roche has 240 unique cancer products (the most in the industry), and there’s plenty more in the works. According to Roche, the company has the most diverse oncology pipeline with more than 20 immunotherapy molecules. Roche’s acquisition of Spark has also given it a leading position in gene therapies.

Merck

R&D spend as a percentage of sales: 21.34 percent
Total R&D investments: $8.73 billion

Merck’s blockbuster Keytruda has given the company plenty of big approval wins in recent years. But Merck is also working to ensure that its drug developers have more to brag about in the coming years, and has treatments for HIV, heart failure and more in phase 3 trials. 

Johnson & Johnson

R&D spend as a percentage of sales: 20.83 percent
Total R&D investments: $8.83 billion 

J&J’s research spending jumped by about 5 percent between 2018 and 2019, displaying its continued commitment to innovation investments. The mega-company also scored approvals for two blockbusters last year — Imbruvica and Darzalex. J&J also won a green light from the FDA for a novel ketamine depression treatment, one of the first approvals for that indication in decades.

Novartis

R&D spend as a percentage of sales: 18.2 percent
Total R&D investments: $8.39 billion

Novartis says it currently has 25 blockbusters in its pipeline that it plans to bring to market in the coming years. So far, the Swiss-based company is off to an impressive start with six drug approvals in 2019. Last year, the company’s Zolgensma also became the first gene-therapy approved for spinal muscular atrophy.

Pfizer

R&D spend as a percentage of sales: 17.31 percent
Total R&D investments: $7.99 billion 

As many of its drugs go off patent, Pfizer promised to deliver a whopping 15 new blockbusters to market between 2018 and 2022. Pfizer is also one of several Big Pharma companies in the hunt for a coronavirus vaccine. 

AbbVie

R&D spend as a percentage of sales: 15.42 percent
Total R&D investments: $4.99 billion

With its best-selling Humira set to fall off the patent cliff in 2023, AbbVie has been keeping its R&D investments steady, and is targeting indications such as Alzheimer’s, Parkinson’s, Crohn’s, cancer and more.    

Sanofi

R&D spend as a percentage of sales: 15.11 percent
Total R&D investments: $6.07 billion

Sanofi’s R&D spend has been increasing every year since 2008. As the company loses ground in diabetes to increased competition, it has been shifting focus to high-growth areas such as oncology and immunology.

Top image courtesy of Michal Parzuchowski via Unsplash.com.