Quantifying public and private investment in biopharmaceutical R&D: a study of seven middle- and high-income...

Fostering biopharmaceutical R&D has been a key element of industrial and innovation policy worldwide. Typically, this requires complementary investments from the public and private sectors. However, there is little empirical evidence on the extent of public and private biopharmaceutical R&D investment in countries outside of the US and Europe.

We conducted a literature review to assess the biopharmaceutical R&D environment and related public policies in seven middle- and high-income countries outside of Europe and the US, selected for geographic diversity and data availability: Australia, Brazil, India, Japan, Singapore, South Africa, and South Korea (n = 7). We researched and reported levels and shares of public and private investment in biopharmaceutical R&D via an aggregation of granular, public data from the most recent pre-Covid year available for each country, which ranged from 2017 to 2020. We contrast these figures to those estimated from supranational data sources such as the OECD and WHO.

Aggregating across countries, the private sector accounted for 74% of biopharmaceutical R&D spending. Private sector spending within countries ranged from 35% to 92%, with a simple average of 58%. We contextualise differences between these estimates and those from supranational sources. Overall, the public and private sectors both have important roles in biopharmaceutical innovation across countries. The public sector often funds R&D in universities and basic science, with public funding for later stages of R&D, such as clinical trials, varying by country. There are differences in the extent to which countries invest in initiatives to bridge academia and the private sector.

Aggregative biopharmaceutical R&D spending data may lead to different insights than data from supranational sources. Given the complementary nature of public and private R&D spending, countries wishing to encourage biopharmaceutical R&D should consider targeted public sector investment to spur an environment conducive to private investment. Since data are sparse and not always comparable across countries, there is a need for increased and consistent tracking of data on R&D spending. Further research is needed to connect country-specific data to policies that support R&D sector productivity.