R&D spending across the global pharmaceutical sector climbed 1.5% in 2024, according to unreleased data from Evaluate Pharma.
Even with strong macro headwinds—inflation, rising costs, geopolitical tensions—the global pharmaceuticals industry continued to pump more money into R&D investments in 2024.
That’s according to data from analyst firm Evaluate Pharma, which in an email gave BioSpace a sneak peek at their World Preview 2025 report, set to be published in June 2025. Pharma R&D spending in 2024 grew by 1.5%, a relatively modest jump by the industry’s own standards, considering that from 2022 to 2023, budgets soared 11.5%. Still, R&D spending last year was staggering: drugmakers the world over pumped nearly $288 billion into research and development.
“R&D is central to refreshing product portfolios, which have a natural lifecycle owing to patents and exclusivity periods,” Daniel Chancellor, VP of thought leadership at Norstella, Evaluate’s parent company, told BioSpace. “Without reinvestment into R&D (or business development), revenues are increasingly at risk of competition and will inevitably decline.”
This is why Evaluate estimates that the industry will continue to grow their R&D budgets through the end of the decade—which, as per its yet-to-be-released data, could reach just under $340 billion by 2030—even as the political and economic environment grows increasingly unwelcoming.
“R&D spending will continue to grow, thankfully because industry revenue growth is robust,” Chancellor assured BioSpace. He qualified this assertion, however, by noting that Evaluate “expects R&D margins to decline” as companies continue to enact “cost containment measures” to surmount the increasing number of external challenges to their businesses. These challenges include tariffs, drug pricing and the cost of capital.
In the context of these high-level barriers, Guglielmo Bruni Roccia, senior pharmaceutical industry analyst at BMI, a Fitch Solutions company, offered a more pessimistic view of R&D spending patterns in the coming years. President Donald Trump’s Most Favored Nation drug pricing policy, for example, “could result in compression of U.S. revenues, which would in turn reduce available R&D funding,” Roccia told BioSpace.
“With constrained revenue streams, we expect pharmaceutical companies will likely prioritize R&D projects with greater certainty of profitability and where they have a greater competitive advantage,” he added.
Still, there is reason to be optimistic. Experts who spoke with BioSpace pointed to the industry’s spending spree, particularly in manufacturing, as a promising signal.
“Infrastructure investments enhance R&D capabilities, indicating a complementary rather than competitive relationship,” Roccia explained, noting that a manufacturing push “will support and potentially boost R&D activities rather than hinder them.”
Norstella’s Chancellor agreed, adding that “these new facilities will rely on the success of R&D to produce the drugs of tomorrow, as well as meeting demand for current portfolios.”
Dealmaking appears to be continuing at pace, as well. Despite an increasingly tricky political thicket, the first quarter witnessed a rush of M&A and licensing deals, with the industry earmarking some $40 billion for business development initiatives.
This bodes well for the industry, since deals contributed heavily to the encouraging R&D trend in 2024. All top spenders in this list are anchored by a major contract at least hundreds of millions of dollars in value, bolstered by additional spending to beef up their pipelines.
Below, BioSpace looks at the pharma industry’s most prolific investors in R&D and how they are using these budgets to advance their business.