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PhRMA report shows increased R&D spend

US pharmaceutical companies spent $67.4bn in 2010 on developing new drugs and vaccines, according to Pharmaceutical Research and Manufacturers of America

US pharmaceutical companies spent an unprecedented $67.4bn in 2010 on researching and developing new drugs and vaccines, according to Pharmaceutical Research and Manufacturers of America (PhRMA), the industry's main trade group.

Conducted in collaboration with Burrill & Company, the study showed that R&D investment for the year was $1.5bn higher than the 2009 total.

PhRMA member companies spent about $49.4bn on biopharmaceutical R&D last year, a 6.5 per cent increase over 2009, according to the group. Among PhRMA member companies, more than 75 per cent of research dollars were invested in the US.

The trade group released the survey results the day after the Government Accountability Office (GAO) announced the results of a study showing that prescription drug spending in 2009 totalled around $250bn, of which $78bn - or about 31 per cent - was spent by the federal government.

The GAO study, which factored in "the growing national shift in consumer utilisation from brand-name to generic versions of drugs," found that prices for the top 100 medicines increased 2.6 per cent annually between 2006 and 2010, while medical inflation increased 3.8 per cent.

Writing on the trade group's blog, PhRMA communications director Grady Forrer said the GAO study helped contradict recent findings by American Association of Retired Persons (AARP), the membership group for older Americans, which suggested drug prices were increasing. The AARP report was flawed in that it failed to take generics into account, Forrer argues. "That makes for misleading information because as everyone knows, when a generic is available, it is overwhelmingly prescribed."

"Simply put, our system is designed to promote both continued medical advances and cost savings. Brand-name biopharmaceutical research companies are a driving force behind these medical advances," he writes. "Reports that focus only on brand-name medicines exaggerate drug price trends and miss the point that lower-priced, broadly used generics are possible only because they originated as a brand-name medicine."

16th March 2011

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