R&D Investment By Pharmaceutical Companies Tops $38 Billion In 2004 February 18, 2005 Washington, D.C. —New statistics released today show that PhRMA’s biotechnology and pharmaceutical research member companies invested a record $38.8 billion in research and development on medicines in 2004 (up from $34.5 billion in 2003). This tops a steady increase in R&D over more than two decades, from an estimated investment of $2 billion in 1980. The growth in R&D continues to support important advances by research scientists and physicians that bring better medical treatments to patients, with a growing focus on biologics (treatments generated from living materials such as venom or bacteria). The biopharmaceutical industry is the most research-intensive major industry in the United States and the U.S. greatly exceeds Europe in biopharmaceutical R&D investment. The $38.8 billion invested in R&D represents a 12.6 percent 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 United States, and an estimated $8.2 billion in R&D conducted abroad. PhRMA member companies spent an estimated 18.8 percent of domestic sales on R&D within the United States. “I am proud that the U.S. 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. “We’re working hard every day to create the new medications needed to save lives and improve the quality of life for millions of people. That’s our mission, and it’s a big reason why Americans today are living longer, healthier, more productive lives.” The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading pharmaceutical research and biotechnology companies, which are devoted to inventing medicines that allow patients to live longer, healthier, and more productive lives. PhRMA members invested an estimated $38.8 billion in 2004 in discovering and developing new medicines. PhRMA companies are leading the way in the search for new cures.