Tech companies are generally known to be very innovative as they keep coming up with new products and features on a regular basis. Pharma companies, however, are equally (if not more) innovative as they also need to come up with new products, as well as continuously improve their existing products. Moreover, their development and testing phase is also much longer than other industries. That is why they need to make a big investment in the research and development space. Detailed below are the top ten pharma companies with the highest R&D spending.

Top Pharma Companies With Highest R&D Spending

Our list of the top ten pharma companies with the highest R&D spending is based on the company’s 2019 R&D data from Insider Monkey. Following are the top ten pharma companies with the highest R&D spending:

10. Bayer AG ($5.99 billion)

Founded in 1863, it is a German multinational pharmaceutical and life sciences company with headquarters in Leverkusen. Bayer’s R&D spending represented about 12% of the company’s 2019 sales. It is the biggest pharma company in Germany, and is known best for its product, aspirin.

9. AstraZeneca ($6.06 billion)

Founded in 1999, it is a British-Swedish pharmaceutical and biopharmaceutical company with headquarters in Cambridge. AstraZeneca’s R&D spending is about 25% of its 2019 sales. It was among the first to come up with the COVID-19 vaccine, as well as get approval for use on the general public. Even though it recently nixed a few oncology-related research projects, AstraZeneca is still among the biggest cancer researchers.

8. Bristol Myer Squibb ($6.15 billion)

Founded in 1887, it is a U.S. pharmaceutical company with headquarters in New York City. The company’s R&D spending represented about 23% of its 2019 sales. For 2020, its sales were more than $43 billion. In one of the biggest M&A deals of 2019, Bristol Myer acquired Celgene, a cancer drug and inflammatory disease specialist, for $74 billion.

7. AbbVie ($6.41 billion)

Founded in 2013, it is a U.S. biopharmaceutical company. AbbVie’s R&D spending represented about 19% of its 2019 sales. It is an Abbott spin-off with a presence in over 170 countries worldwide. AbbVie’s best-selling Humira is set to lose patent protection in 2023, and that is why it is spending a lot on R&D.

6. Sanofi ($6.75 billion)

Founded in 1973, it is a French pharmaceutical company with headquarters in Paris. Sanofi’s R&D spending represented about 17% of its 2019 sales. This French company partnered with GSK to develop a vaccine for COVID-19. However, Sanofi’s vaccine is expected to get approval in the second half of 2021. Lately, the company shifted focus to high-growth areas such as oncology and immunology.

5. Roche ($6.94 billion)

Founded in 1896, it is a Swiss pharma company with headquarters in Basel. Roche R&D spending was about 22% of its net sales in 2019. It has 240 unique cancer products and more products are in the pipeline. The company claims to have the most diverse oncology pipeline with over 20 immunotherapy molecules. Roche also has a leading position in gene therapies, thanks to the acquisition of Spark.

4. Pfizer ($8.65 billion)

Founded in 1849, it is a U.S. pharma company. Pfizer’s total R&D spending represented almost 17% of the company’s 2019 sales. It was quick to come up with an effective COVID-19 vaccine. Pfizer has already made deals for billions of doses with several countries, including the UK and the U.S. Many of its drugs are set to go off patent, and to make up for it, the company has promised to bring 15 new drugs to the market between 2018 and 2022.

3. Novartis ($9.40 billion)

Founded in 1996, it is a Swiss multinational pharmaceutical company based in Basel. Novartis’ R&D spending was about 20% of its sales in 2019. It has many popular drugs in its portfolio, including clozapine, diclofenac, carbamazepine, valsartan, imatinib mesylate, cyclosporine, letrozole, methylphenidate, terbinafine and more.

2. Merck ($9.87 billion)

Founded in 1891, it is a U.S. pharma company with headquarters in New Jersey. Merck’s R&D spending represented about 21% of its 2019 sales. Some of its most popular products are Januvia (used for treatment of diabetes), Zetia (treatment of high cholesterol), Isentress (treatment of HIV), and Gardasil (vaccine against cervical cancer). Merck operates in more than 140 countries.

1. Johnson & Johnson ($12.24 billion)

Founded in 1886, it is a U.S. company that deals in medical devices, pharmaceutical, and consumer packaged goods. The company’s R&D spending represented about 15% of its sales in 2019. It also worked on developing a COVID-19 vaccine. Johnson & Johnson is among the biggest companies in the pharma industry and also one of the world's most valuable companies, with a presence in over 175 countries.

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