Nearly £21 billion was spent on research and development by leading UK firms during 2006, marking growth of 9% over 2005, show figures published by the Department for Innovation, Universities and Skills (DIUS) last week.

And according to the annual R&D Scoreboard - an international league table of R&D active companies published in collaboration with the Department for Business, Enterprise and Regulatory Reform (BERR) - the pharmaceuticals and biotechnology sector was the top performer in terms of contribution to R&D, both in the UK and around the globe.

In the UK, pharma and biotechs among the top 850 (in terms of R&D spend) sank £7.4 billion into R&D, up 10.5% over 2005. Drug giants GlaxoSmithKline and AstraZeneca held the lion’s share of this investment, together representing a whopping 73% of the year’s total spent by the industry, with the former shelling out £3.46 billion (up 10% on last year) and the latter £1.99 billion (up 15%) on R&D.

“The results of the survey show clearly what an important contribution the pharmaceutical sector makes to the overall UK R&D picture,” Ian Coleman, Partner at PricewaterhouseCoopers (authors of this year's report), told PharmaTimes UK News. Furthermore, it shows that “the UK pharmaceutical companies continue to match international benchmark levels of R&D investment”, he added.

Productivity waning
On the downside, despite a steady rise in R&D spending over the past ten years, productivity - as measured by the number of new molecular entities and biologics approved by the approval agencies – is dwindling.

According to the report, this trend underscores the fact that boosting investment in R&D alone will not necessarily generate novel products, and that there are many other important ingredients to successful R&D, such as the right strategic investments, therapy areas, alliances, streamlining in-house R&D processes and recruiting the right people, it says.

The report cites Shire’s current performance as an illustration of the challenges of R&D investment; the group has one of the highest R&D ratios at 16.8% but its profitability – at 2.2% - is one the lowest.

Global picture
Worldwide, R&D investment in the global pharmaceuticals industry grew by 16% last year, knocking technology hardware (up 13%) off the top spot as the largest global R&D sector.

The sector accounted for 19.4% or £47.4 billion of R&D investment by the top 1,250 global firms, with Pfizer crowned king for its hefty investment of £3.88 billion, marking 2% growth over 2005.