American pharmaceutical company Merck & Co. increased its research and development (R&D) expenses slightly from approximately 9.75 billion U.S. dollars in 2018 to 9.87 billion U.S. dollars in the last year.
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. In the search for the next groundbreaking medicine, collaborations allow companies to share resources and increase expertise. In 2019, Merck & Co. had approximately 71,000 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 79.6 billion U.S. dollars on R&D in 2018, with expenditure within the United States accounting for a share of 78 percent . The pharmaceutical industry is one of the biggest investors in R&D: PhRMA members spent around 19.5 percent of their consolidated worldwide revenues on R&D in 2018.