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Research Spending Creeps Upward


Life sciences research and development investment will rise in 2013, even as some of the industry's biggest players pare their R&D spending, according to a forecast.

This article published with permission from The Burrill Report.

Life sciences research and development investment will rise in 2013, even as some of the industry’s biggest players pare their R&D spending, according to a forecast by R&D management giant Battelle and R&D Magazine.

Leading life sciences companies in the United States are on track for 2012 R&D investment levels significantly below 2011, Battelle says, with In 2012 Pfizer cut $1.5 billion and Merck chopped $500 million from their R&D programs, according to Battelle. While Johnson & Johnson spent less on R&D in 2012 than it did in 2011, Eli Lilly, Abbott Laboratories, and Biogen Idec ended up investing slightly more than in 2011, according to data gathered by Battelle and the magazine.

But even with the ongoing reductions in R&D spending by large U.S. life sciences companies, Battelle forecasts a 1.4% increase in total U.S. life science R&D to $82.7 billion in 2013. That small U.S. increase, combined with similar lower levels of growth among European life science firms, and significant growth among Asian life science firms, will lead to 2013 global life science R&D spending of $189.2 billion, a forecasted increase of 4.2% from 2012 to 2013, says Battelle.

Global research and development spending in all industries and academia together is forecast to grow 3.7%, or $53.7 billion, to $1.5 trillion in 2013, according to Battelle.

“In a year of economic upheaval and turmoil, it’s important to remember that R&D is not an instrument that can be quickly turned on and off to trigger economic growth,” says report co-author Martin Grueber, a Battelle research leader.

China will add $23 billion to its gross domestic expenditures on R&D in 2013, the forecast suggests, running on momentum from a decade-long track record of annual double digit increases in R&D investment there and raising the country’s overall R&D spend to $220.2 billion in 2013. By comparison, the total U.S. R&D enterprise will see expenditures grow by 1.2% to $423.7 billion, assuming Congress reaches a compromise on the fiscal cliff or delays its impact beyond January.

“The watchword heading into 2013 is uncertainty, and the effect on U.S. R&D is more unclear than ever,” says Grueber. “The current economic condition and uneasy prospects for the future combined with a federal government funding projection that could range anywhere from flat to significant declines have limited the prospects for 2013.”

But fiscal cliff woes in the Unites States are a small part of a much bigger picture. Globalization of research is creating a race, with nations looking to outspend each other to maintain a competitive edge. This internationalization of R&D now pits the United States, China, Japan, and the European Union against each other, notes Battelle.

The forecast drew upon information from the National Science Foundation, the International Monetary Fund, the White House Office of Science and Technology policy, and other sources.

Copyright 2012 Burrill & Company. For more life sciences news and information, visit

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