New NAM Report Finds Biopharmaceutical R&D Investment Crucial for Patients, the Economy  

Jan 3, 2024 | Blog Post

Thousands of life sciences companies from across the U.S. compete every day to bring the next generation of treatments and cures to market. Within this ecosystem, pharmaceutical manufacturers play a key role in developing new therapies and cures. By mobilizing their scientific expertise, specialized and highly trained workforce and vast research and development (R&D) infrastructure, pharmaceutical manufacturers continue leading the charge in advancing life sciences innovation.  

In a new report, the National Association of Manufacturers (NAM), a PULSE partner, examines the pharmaceutical industry’s significant commitment to R&D and its impact on our economy and our health. The findings of the report, “Creating Cures, Saving Lives: The Urgency of Strengthening U.S. Pharmaceutical Manufacturing,” underscore the economic value of competition policy that incentivizes continued investment in the life sciences ecosystem. 

“Pharmaceutical manufacturers are a major contributor to the U.S. economy, employ millions of Americans and drive innovation,” said Chad Moutray, NAM chief economist. “The industry’s investments in R&D have led to lifesaving treatments and therapies that have improved the quality of life for all Americans.” 

Some key findings from the report are highlighted below:  

  • The pharmaceutical industry is among the most R&D intensive and is driven by significant private sector investment. 
    • The industry invested more than $102 billion in R&D in 2021. 
    • Biopharmaceutical companies invest in R&D at more than 3.5 times the rate of other industries
  • Pharmaceutical manufacturers employ an estimated 291,000 employees and support a total of 1.5 million jobs. 
    • For every one job in the pharmaceutical industry, four jobs are created in supporting industries. 
  • Pharmaceutical manufacturers contribute significantly to the U.S. economy and economic growth. 
    • Pharmaceutical manufacturers contributed $355 billion in value-added output in 2021. 
    • The industry directly contributed $192 billion in 2021, a 24% increase over the previous two years. 

Every dollar that life sciences companies spend on R&D is critical to advancing our understanding of diseases and how to treat them. However, these investments carry with them inherent risk; less than 10% of potential new treatments and cures ultimately come to market, according to the Biotechnology Innovation Organization (BIO).  

“The industry invests in an uncertain future, but this investment requires a regulatory environment that is certain and supports innovation.”

The National Association of Manufacturers

A core tenet of what makes the U.S. life sciences ecosystem among the best in the world is our approach to competition policy that supports pro-innovation mergers and acquisitions (M&A). M&A allows companies to bring together their unique resources, expertise and infrastructure to advance biopharmaceutical breakthroughs. M&A also helps smooth the path to market for new medicines by incentivizing critical investment that offsets the staggering costs of development.  

Unfortunately, the Federal Trade Commission (FTC) and Department of Justice (DOJ) have clearly signaled a more aggressive approach to antitrust enforcement that overlooks the competitive market dynamics that exist within the life science ecosystem. Their recently finalized joint merger guidelines put at risk a critical pathway for companies to partner and collaborate on bringing new therapies to market.  Undue measures to restrict pro-competition M&A undermine the progress we have made in treating and curing the most complex health issues facing patients and ultimately put future treatments at risk too.