Dollars Invested in Pharmaceutical and Medicine Manufacturing Research and Development

Investment in research and development work (R&D) in the field of pharmaceutical and medical manufacturing is critical to developing new and innovative medical products that improve our nation’s health and address unmet health needs.

Data Source: Bureau of Economic Analysis (BEA), US Department of Commerce

Metrics Calculation

The Bureau of Economic Analysis (BEA) at the US Department of Commerce draws industry estimates of R&D investment from the National Science Foundation (NSF) Survey of Industrial R&D (SIRD), the most comprehensive data available on R&D activity for domestic business in the United States.

The calculations converting the nominal dollar values of National Health Expenditure data to 2010 Adjusted dollars were performed by the Office of the Assistant Secretary for Planning and Evaluation using the Bureau of Labor Statistics Consumer Price Index (CPI) to adjust for inflation (http://www.bls.gov/cpi/cpifaq.htm#Question_1).  The Health System Measurement Project uses the CPI for all nominal value conversions.  The CPI adjusts values for economy-wide inflation rather than health care-specific inflation. 

Additional Information

Inclusion Criteria: Investment in R&D consists of both R&D performed internally for a business's own use, and purchased R&D.   For total  purchased R&D-industry-funded R&D performed by academic institutions, nonprofits serving households, federally funded research and development centers, and state and local government; domestic purchases of R&D from other for-profit companies and imports of R&D; R&D purchased from a R&D services (NAICS 5417) domestic subsidiary for use in pharmaceutical and medicine manufacturing establishments; purchases of non-science and engineering R&D from for-profit R&D services establishments (NAICS 54172); cost of R&D performed in a company headquarters (NAICS 551) or R&D services auxiliary (NAICS 5417) and transferred for use in pharmaceutical and medicine manufacturing establishments.

Exclusion Criteria:  For own-account R&D-Measure value excludes the costs for R&D performed in company headquarters (NAICS 551), R&D services subsidiary establishments and auxiliary establishments (NAICS 5417); the cost of R&D funded by federal, state and local governments and nonprofit institutions serving households; the cost of R&D sold to other domestic businesses and exported R&D; the own-account software R&D amount for the entire time series.

Dollars Invested in Pharmaceutical and Medicine Manufacturing Research and Development ($MM)

Dollars Invested in Pharmaceutical and Medicine Manufacturing Research and Development