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In relation to total revenue, the pharmaceutical industry is among the biggest investors in research and development (R&D). Based on data from the Pharmaceutical Research and Manufacturers of America (PhRMA), the industry in the United States spent around ** percent of global revenues on R&D in 2024. 

Analyzing the revenues and R&D expenditure

Members of the PhRMA trade group generated global revenues of approximately *** billion U.S. dollars in 2024, with domestic revenues accounting for ** percent of that figure. With regard to R&D expenditure, PhRMA members spent some *** billion U.S. dollars worldwide in 2024, with spending in their domestic market accounting for around ** percent of the global figure. 

Product lifecycles in the pharmaceutical industry

Pharmaceutical manufacturers require time and money if they are to develop new innovative medicines: it can take 10 to 15 years to develop a new medicine, at an average cost of approximately *** billion U.S. dollars. Due to patents and exclusivity, brand name drugs can expect to be on the market for an average of twelve years before a generic version enters. Generics contain the same active ingredients as branded drugs but can be considerably cheaper. The healthcare system in the United States generated around *** billion U.S. dollars in savings through generic medicines in 2023.