Since Q4 2007, research spending in the U.S. has dropped 4 percent--or $1.9 billion. But report in BusinessWeek today lists 25 major U.S. corporations that, despite the economic downturn, have boosted R&D spending significantly in 2009. Of those 25, 13 were biotech and pharmaceutical companies, with Merck taking the top spot for increased spending. By comparison, only eight tech companies made the list.
The reasons for the spending come back to the much-talked-about patent cliff. Big Pharma is increasing R&D so its pipeline is sufficient to replace the billions of dollars in products that are going off-patent over the next few years. Some of that money is being used to mine the industry for licensing deals, while other companies are simply spending more on clinical trials as products in their pipeline advance to later stages. The industry's buyout spree has also contributed to an increased R&D budget.
More R&D spending may not solve the industry's problems though. Critics note that pumping more money into research has not resulted in more sales, and the industry's new drug offerings have dropped.
Merck (up $371 million from 2008), Biogen Idec ($185.4 million), Eli Lilly ($159.1 million), Bristol-Myers Squibb ($144 million), and Gilead ($98.6 million) were the top five companies to make the list. View this chart to see data on all 25 companies.
- here's the BusinessWeek piece