American pharmaceutical company Merck & Co. increased its research and development (R&D) expenses significantly during the pandemic years 2020-2022 to approximately 13.5 billion U.S. dollars. However, 2023, saw ma massive increase up to 30.5 billion dollars, mostly due to higher charges for business development transactions and increased development spending particularly in the therapeutic areas of oncology,
cardiovascular, infectious diseases and vaccines.
Finding a cure for rising research costs
To increase the quality of its innovation, Merck & Co. has entered into arrangements with other companies, and lower payments made to its collaborative partners was one reason for the reduction in R&D costs in 2018. But in the course of the following two years R&D spending became again increasingly important and reached a record high of 30.5 billion dollars in 2023. In 2023, Merck & Co. had approximately 72,000 employees worldwide, with around one fifth employed in research activities.
How much does the pharma industry spend on research?
Merck & Co. is a member of the trade group PhRMA (Pharmaceutical Research and Manufacturers of America). Members of the group spent a collective 101 billion U.S. dollars on R&D in 2022, with expenditure within the United States accounting for a share of 75 percent . The pharmaceutical industry is one of the biggest investors in R&D: PhRMA members spent over 19 percent of their consolidated worldwide revenues on R&D in 2022.
Merck & Co.'s expenditure on research and development from 2006 to 2023
(in million U.S. dollars)
Values for 2006-2020 were taken from previous annual financial reports.
* The increase was primarily due to higher
charges for business development activity in 2023, including charges of $10.2 billion for the acquisition of Prometheus, $5.5 billion related to the formation of a
collaboration with Daiichi Sankyo and $1.2 billion for the acquisition of Imago.
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Merck & Co.. (February 26, 2024). Merck & Co.'s expenditure on research and development from 2006 to 2023 (in million U.S. dollars) [Graph]. In Statista. Retrieved November 10, 2024, from https://www-statista-com.ezproxy.canberra.edu.au/statistics/282738/expenditure-on-research-and-development-by-merck-and-co/
Merck & Co.. "Merck & Co.'s expenditure on research and development from 2006 to 2023 (in million U.S. dollars)." Chart. February 26, 2024. Statista. Accessed November 10, 2024. https://www-statista-com.ezproxy.canberra.edu.au/statistics/282738/expenditure-on-research-and-development-by-merck-and-co/
Merck & Co.. (2024). Merck & Co.'s expenditure on research and development from 2006 to 2023 (in million U.S. dollars). Statista. Statista Inc.. Accessed: November 10, 2024. https://www-statista-com.ezproxy.canberra.edu.au/statistics/282738/expenditure-on-research-and-development-by-merck-and-co/
Merck & Co.. "Merck & Co.'s Expenditure on Research and Development from 2006 to 2023 (in Million U.S. Dollars)." Statista, Statista Inc., 26 Feb 2024, https://www-statista-com.ezproxy.canberra.edu.au/statistics/282738/expenditure-on-research-and-development-by-merck-and-co/
Merck & Co., Merck & Co.'s expenditure on research and development from 2006 to 2023 (in million U.S. dollars) Statista, https://www-statista-com.ezproxy.canberra.edu.au/statistics/282738/expenditure-on-research-and-development-by-merck-and-co/ (last visited November 10, 2024)
Merck & Co.'s expenditure on research and development from 2006 to 2023 (in million U.S. dollars) [Graph], Merck & Co., February 26, 2024. [Online]. Available: https://www-statista-com.ezproxy.canberra.edu.au/statistics/282738/expenditure-on-research-and-development-by-merck-and-co/