R&D investment Archives - Medical Design Sourcing

Why Merck shelled out $30B+ on R&D in 2023

In 2023, Merck & Co. made a considerable investment in research and development, spending more than $30 billion. This figure represents more than double the company’s R&D spending ($13.5 billion) in 2022.

The closest competitor in terms of R&D investment was Roche Pharmaceuticals, with a 2023 R&D expenditure of roughly $14.7 billion. This sum is less than half of Merck’s spending. Next in line was Novartis, which spent approximately $13.7 billion on R&D. Next in line was Johnson & Johnson Innovative Medicine, which spent about $12 billion.

In 2023, Merck’s revenue narrowly eclipsed that of Pfizer, which fell 41.7% from 2022 levels owing largely to collapsing demand for COVID-19 products.

In 2023, Merck invested roughly half of its revenue in R&D.

The chief drivers of Merck’s R&D spending included the following:

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Are Big Pharma giants getting the right ROI on their R&D investments? A visual exploration

[Image courtesy of Adobe Stock]

While annual reports show broadly similar R&D strategies among Merck & Co., Pfizer, Johnson & Johnson and AbbVie, their 2020–2023 financial metrics reveal a concerning trend. Merck & Co. may be the new top dog of Big Pharma, but the firm’s 1.4% revenue growth in 2023 represents a significant slowdown. Pfizer’s 41.7% revenue decline from its COVID-inflated $100.3 billion peak in 2022 is even more stark. Similarly, J&J’s modest 4.2% growth and AbbVie’s 6.4% revenue dip also signal a departure from previous patterns.

In raw numbers, R&D spending in the pharmaceutical industry has surged over the past few decades, jumping from about $30 billion across the industry to more than $200 billion annually by the 2020s. Despite record-breaking R&D spending hitting $161 billion in 2023, marking a nearly 50% increase since 2018, as IQVIA has noted, …

The story behind Biogen’s 1,000 job cuts and R&D refocus

Cambridge-based biotech Biogen has unveiled plans to cut 1,000 jobs, or 11% of its workforce, as it prepares for the launch of its newly approved Alzheimer’s disease drug, Leqembi (lecanemab) that it developed with Eisai. This move follows a pattern of significant layoffs, with the company having cut 885 jobs last year after the troubled rollout of its Alzheimer’s drug Aduhelm.

The scope and rationale for the Biogen job cuts

Last year, Biogen eliminated 885 positions following the rocky launch of its initial Alzheimer’s drug Aduhelm in 2021. The latest job cuts are part of Biogen’s new “Fit for Growth” strategic plan aimed at prioritizing resources towards high-value programs with growth potential. The plan intends to deliver $1 billion in gross operating expense savings by 2025. After reinvesting $300 million into product launches and R&D, this would result in $700 million in net savings based on the company’s projections.

“As we looked at the R&…

The economic impact of pharma giants’ fight with the U.S. government over drug pricing reform

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Big Pharma firms Merck and Bristol Myers Squibb are challenging President Biden’s Inflation Reduction Act, alleging the law’s plan to lower drug prices infringes on their rights. The U.S. Chamber of Commerce — whose members include drugmakers AbbVie and Eli Lilly — is also aiming to block Medicare from rolling out the program.

In 2022, President Biden signed the Inflation Reduction Act (IRA) into law to fund major healthcare and climate change initiatives. No Republican supported the bill. The IRA allows Medicare to negotiate the prices of certain high-cost drugs. The program would first focus on 10 drugs in 2026. From there, it is slated to expand to 15 drugs in 2027 and 2028, and 20 drugs per year from 2029 on. Only medications on the market for years without competition are eligible.

Assessing the impact of the Inflation Reduction Act on drug …

Here’s what molecular shape can tell you about pharma innovation

Photo by Anna Shvets from Pexels

Is it possible that pharmaceutical innovation has accelerated over the past two decades — with the novelty of small molecule and peptide drugs steadily increasing?

That’s the conclusion suggested by a recent study published in ACS Medicinal Chemistry Letters, which found roughly 65% of FDA-approved drugs in 2020 were structurally novel. Last year’s drug approvals even included at least one new molecular entity based on a novel molecular shape.

The finding flies in the face of the talk of an innovation crisis in the pharmaceutical industry. Before COVID-19 struck, pharma industry observers tended to chide the industry’s recent innovation track record. R&D costs per drug have increased significantly, while drug blockbusters have grown more scarce. Despite the pharma’s historically high-profit margins, the sector generally trailed the S&P 500 in the years leading up to the pandemic.

Get the full story …

Here’s what molecular shape can tell you about pharma innovation

Photo by Anna Shvets from Pexels

Is it possible that pharmaceutical innovation has accelerated over the past two decades — with the novelty of small molecule and peptide drugs steadily increasing?

That’s the conclusion suggested by a recent study published in ACS Medicinal Chemistry Letters, which found roughly 65% of FDA-approved drugs in 2020 were structurally novel. Last year’s drug approvals even included at least one new molecular entity based on a novel molecular shape.

The finding flies in the face of the talk of an innovation crisis in the pharmaceutical industry. Before COVID-19 struck, pharma industry observers tended to chide the industry’s recent innovation track record. R&D costs per drug have increased significantly, while drug blockbusters have grown more scarce. Despite the pharma’s historically high-profit margins, the sector generally trailed the S&P 500 in the …