Strengthening Private Sector R&D

Medical progress typically starts with general scientific exploration known as “basic research.” Americans have traditionally devoted about 1 percent of their health care tax dollars to finance basic research at universities, hospitals and other research institutions across the country. Using the clues uncovered by basic research, businesses develop life-saving medical advances. Patient advocacy organizations and other non-profits also invest in research, as do some state and local governments. But the private sector is by far the largest U.S. funder of medical research and development, followed by the federal government. 

Private sector medical advances take many forms, including treatments, tools, preventative measures, medical devices and more.

Industry stats:

  • America’s biopharmaceutical industry is the global leader in medical innovation, with more than 300 new medicines approved by the Food and Drug Administration in the last decade. (PhRMA)
  • Biotechnology R&D provides high-wage jobs across the country for 1.42 million Americans employed directly in biosciences jobs. This industry supports an additional 6.6 million jobs, resulting in a total employment impact of more than eight million jobs in the biomedical sector. (Battelle)
  • More than 810,000 people work in the biopharmaceutical industry in the United States, and the industry supports a total of nearly 3.4 million jobs across the economy. (PhRMA)
  • “Though many individual firms and some industries increased their investment, industry investment in R&D as a whole was flat in 2013 due to the slow global economy, continued rationalization of R&D activities in selected industries and the private-sector impact of federal budgets and sequestration.” (2014 Global R&D Funding Forecast, Battelle)
  • China is expected to overtake the U.S. in total public and private R&D within five years. (OECD, 2014)

Examples of private sector advocacy topics:

  • clinical trials,
  • intellectual property,
  • technology transfer,
  • tax reform – particularly repealing the medical device tax and making the R&D tax credit permanent,
  • broad patient access to safe and effective medicines,
  • healthcare-related regulatory and reimbursement climate,
  • and a free flow of information to patients.

Policy Contacts

Director of Policy and Advocacy
Funding research gives all of us a better chance of living a healthier life.
Pam Hirata, heart disease survivor