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Measuring US Pharmaceutical Industry R&D Spending

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  • Joseph Golec
  • John Vernon

Abstract

Government policy debates on pharmaceutical pricing often turn on whether higher drug prices fund greater company-financed R&D spending. In the US, debate breaks down because each side uses a different measure of R&D spending, and the measures are far apart. Government agencies, Congress and consumer groups use government-generated survey data from the National Science Foundation (NSF), and the pharmaceutical industry uses survey data from the Pharmaceutical Research and Manufacturers of America (PhRMA). This issue is also relevant to academic work because some studies use NSF data, and others use PhRMA data. This article illustrates the pros and cons of these survey data series, and offers a more reliable, comprehensive and replicable alternative series, based on Compustat data. Copyright Adis Data Information BV 2008

Suggested Citation

  • Joseph Golec & John Vernon, 2008. "Measuring US Pharmaceutical Industry R&D Spending," PharmacoEconomics, Springer, vol. 26(12), pages 1005-1017, December.
    • Handle: RePEc:spr:pharme:v:26:y:2008:i:12:p:1005-1017
    DOI: 10.2165/0019053-200826120-00004
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    References listed on IDEAS

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    7. Joseph Golec & John A. Vernon, 2007. "New estimates of pharmaceutical research and development spending by US-based firms from 1984 to 2003," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(4-5), pages 481-483.
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