The top 16 pharmaceutical companies spent $159.1 billion on R&D in 2025, down 3.6% from $165 billion in 20241
Johnson & Johnson reduced R&D expenses by nearly 15% to $14.7 billion, largely due to exiting programs in infectious diseases and vaccines in 20231
AbbVie had the steepest decline with 29% less R&D spending, though adjusted for $4.48 billion in impairment charges, actual spending rose by $1 billion1
Bristol Myers Squibb dropped R&D spending by 11% to $9.95 billion due to lower impairment charges and strategic productivity initiatives1
Merck cut R&D expenses by 12% in 2025 thanks to lower business development charges1
Pfizer's R&D spend fell 4% to $10.21 billion due to restructuring costs1
Companies increasing R&D investment included Amgen with a 22% increase to $7.27 billion, Regeneron with 14% growth to $5.85 billion, GSK with 18% increase, and AstraZeneca with 5% growth to $14.23 billion1
The decline does not necessarily signal slower innovation but may reflect efficiency gains from adopting AI and machine learning technologies2
R&D spending reductions reflect strategic pipeline prioritization as companies focus on projects with highest potential for commercial success amid patent cliffs and regulatory challenges2
Improving R&D productivity is cited as the top priority by 41% of biopharma executives, as the average cost of bringing a new drug to market now exceeds $2 billion6
Sources:
1. https://www.biospace.com/business/pharma-r-d-spend-drops-3-6-as-pipeline-prioritizations-take-shape
2. https://www.thebiointel.com/article/pharma-rd-spend-drops-pipeline-prioritizations
6. https://www.deloitte.com/us/en/insights/industry/health-care/life-sciences-and-health-care-industry-outlooks/2026-life-sciences-executive-outlook.html