The top 10 pharma R&D budgets in 2016

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Last year, biopharma won its share of new drug approvals, though not as many as we're used to in the U.S., as research spending came to fruition. But drugmakers also suffered a number of R&D setbacks, cut research staff, rejigged their operations and refocused their pipelines. 

Drug R&D also found itself in the spotlight as one of the biggest political issues to arise last year—drug pricing—became inextricably linked to the cost of biomedical research and development. U.S. industry groups PhRMA and BIO, as well as Europe’s EFPIA and the U.K.’s ABPI, have all said, and will continue to say, that the inherent reason drug prices are what they are is because of the huge R&D investment most (though not all) companies funnel into their scientists and labs. 

 It’s a risky business: The majority of drugs that begin phase 1 won’t be approved, and over the years, failures in phase 3 have cost individual companies hundreds of millions of dollars each time. Sometimes failures stem from problems with the studies themselves, sometimes a company simply refuses to give up on a dead asset, but often, a failure in the lab is simply part and parcel of the trial-and-error approach inherent to pharmaceutical and biotech research. 

Based on figures from their 2016 annual reports, the top 10 pharma R&D budgets (all using their GAAP figures) combined totted up to $70.5 billion, with full-year revenue coming in at $404.8 billion. (Más)

Roche
R&D budget (pharmaceuticals and diagnostics): CHF 11.53 billion ($11.42 billion) 
Change from 2015: Up 20% 
Total 2016 revenue: CHF 50.57 billion 
R&D budget as percentage of revenue: 22.8% 

J&J
R&D budget (also includes device and consumer healthcare work): $9.09 billion ($7 billion for pharmaceuticals) 
Change from 2015: Up 0.5% 
Total 2016 revenue: $71.9 billion 
R&D budget as percentage of revenue: 12.6% (10% for pharmaceuticals) 

Novartis
R&D budget: $9 billion 
Change from 2015: Up 0.8% 
Total 2016 revenue: $48.5 billion 
R&D budget as percentage of revenue: 18.5% 

Pfizer
R&D budget: $7.87 billion 
Change from 2015: Up 3% 
Total 2016 revenue: $52.82 billion 
R&D budget as percentage of revenue: 14.8% 

Merck
R&D budget: $7.19 billion 
Change from 2015: Up 7.3% 
Total 2016 revenue: $39.8 billion 
R&D budget as percentage of revenue: 18%