A. R.&D. EXPENDITURES: HUMAN USE PRODUCTS Section A reports the total cost (worldwide) incurred for all drug or medical research and development directed toward providing products for human use, as financed by pharmaceutical manufacturers, including parent, affiliated, and subsidiary companies. [Millions of dollars] I. Company-financed R. & D. expenditures for human use pharmaceuticals: (a) Total amount spent within firm.... (1) In the United States.. (2) In foreign countries.. 8.6 217.8 10.2 These figures include cost of salaries, other direct costs, service, routine supplies, and supporting costs, plus a fair share of overhead (administration, depreciation, space charges, rent, etc.) for human pharmaceutical research and development. Excluded from this section are costs of drug or medical research and development conducted on grant or contract for other companies, Government agencies, etc. Capital expenditures for research and development plant or equipment, or expenditures for training of research personnel are excluded, also. [Dollars in millions] II. Company-financed drug R. & D. expenditures, veterinary end-use: Worldwide expenditures (additional to sec. I totals above) expended specifically for veterinary pharmaceutical research and development.. III. Governmental grants for R. & D.: Grants and contractual payments received from governmental agencies for research and development by firms (amounts not shown in secs. I or II above)......-- IV. Scientific personnel (in lieu of the separate definitive research personnel report of the last 3 years, firms have furnished only summary data for 1962). (See definitions on p. 10.): B. REPORT ON CAPITAL INVESTMENT IN R. & D. For 44 companies whose worldwide total of dosage and bulk sales amounted to $2.84 billion in 1962, and $230.6 million in R. & D. for human-use drug R. & D., the following aggregate data were reported: [In thousands of dollars] 1. Investment in facilities and equipment for research and development (lines (a) to (d): at cost before depreciation): 1 (a) Land.. 204 (b) Building... 8,043 5, 458 136, 003 (c) Scientific and technical equipment: (2) Other R. & D. instruments, equipment, and devices.. (1) Central facility instruments and instrument systems (d) Other capital investment.. Total cost. Less depreciation.. Book value.. 144 companies included. C. DRUG RESEARCH ACTIVITY, 1962 For calendar year 1962, reporting firms have estimated the number of chemicals or other substances obtained or prepared by or on behalf of the firm, which are subjected to biological testing, and those subjected to clinical testing, with the hope that they would be active in the following medical categories (each substance counted only once in each vertical column, for its major suspected medical use; where use could not be predicted, the substance was counted under "Not otherwise classified"). For definitions of headings, see notes following the table. 1 The medical or physiological categories cited were adapted from the classification "New and Nonofficial Drugs," for example, "Cardiovascular and Hematological Agents" would include heart muscle depressants, sclerosing agents, vasodilator and antihypertensive agents, agents affecting blood coagulation, hemostatics, blood derivatives, etc. 2 This group includes all chemicals, compounds, mixtures, filtrates, or other substances obtained, prepared, extracted, or isolated for a medical research purpose (antibiotic beers, etc., are included). Because in many instances chemicals made for nonmedical purposes are obtained by the pharmaceutical industry for medicinal screening, the entry "Not otherwise classified" was used for such items, as well as for substances in medical categories not listed above. 3 This group includes all chemicals, substances, etc., which have been or are being subjected to biological tests or screens. Materials obtained from outside the organization, or prepared in previous years, were included if at least some of the testing occurred during 1962. Routine in vitro screens were excluded, but all in vivo procedures, tissue culture studies, pharmacological or biochemical workups and the like were included here. Ma This group includes all chemicals, substances, etc. which have been or are being tested on humans. terials obtained from outside sources, or prepared during previous years, were included if at least some of the clinical testing occurred during 1962. D. ESTIMATES OF EXPERIMENTAL ANIMAL USE IN R. & D., 1962 The total numbers of animals of the type indicated were used in research and development activity conducted or financed by reporting firms. Animals employed in phase 1-2-3 clinical tests in veterinary laboratories were excluded. Drug or medical research and development.-The definition of "drug or medical research and development" is identical to the one used in the survey which the PMA has conducted annually since 1959. It is as follows: For the purposes of this survey, the term "drug or medical research and development" includes basic and applied research activities and development carried on or supported in the medical, biological, chemical, and pharmaceutical sciences, and in related sciences, including psychology and psychiatry, if the purpose of such activities is concerned ultimately with the utilization of scientific principles in understanding human diseases or in improving human health. Section A. II. provides the sole exception to human applicability of research, in that it relates to research specifically for veterinary end-use. Activity in pursuit of the following objectives is included: (1) Planned search for new knowledge, whether or not the search has reference to a specific application. (2) Application of existing knowledge to problems involved in the creation of a new product or process, including work required to evaluate possible uses. (3) Application of existing knowledge to problems involved in the improvement of a present product or process. For practical purposes, any scientific or technical activity which could result in a new drug, as defined in the Federal law, would certainly be considered research and development. Chemical synthesis of substances which might become drugs would be included in this definition, and all clinical evaluation of new or old drugs would be. The question, "When does development end and production begin?" is often asked. If the primary objective is to make further improvements on the product or process, then the work comes within the definition of research and development. If, on the other hand, the product or process is substantially "set," and the primary objective is to develop markets or to do preproduction planning, or to make engineering changes in production equipment, then the work is no longer research and development. Routine quality control activities are not included in this survey; figures or estimates in development of quality control methods are included, where available. Scientists. Includes all persons engaged in a scientific work which requires a knowledge of or training in physical, life, engineering, or mathematical sciences equivalent at least to that acquired through completion of a 4-year college course with a major in these fields. Technicians, supporting personnel in medical and health-related research.Includes personnel engaged in research, research administration, clinical evaluation and development; excludes personnel in promotion, sales, business administration, production, and quality control. EXHIBIT II-RESULTS OF PMA SURVEY OF PERSONNEL IN DRUG OR MEDICAL RESEARCH AND DEVELOPMENT, 1961 PHARMACEUTICAL MANUFACTURERS ASSOCIATION, HIGHLIGHTS Washington, D.C., June 22, 1962. 1. In 1961 the pharmaceutical industry employed approximately 13,500 scientists and supporting staff in medical and health-related research-an increase of 2,000 or 18 percent above the 1959 level. 2. The number of research scientists in the industry rose from 6,600 in 1959 to over 7,300 in 1961-an increase of more than 10 percent. 3. The 23 largest companies (those with annual sales of over $30 million) accounted for 85 percent of all research staff; about 15 percent of the total were employed by the smaller firms. Ten large companies with annual sales over $100 million reported well over half of all research personnel and more than 55 percent of the research scientists employed by the industry. 4. Roughly two-fifths of the research scientists held a doctoral degree with only 4 percent having less than a bachelor's degree. 5. About three-fourths of the research scientists were reported in the biomedical sciences and chemistry. Within the biosciences, the largest numbers were found in pharmacology and microbiology. 6. Larger companies reported slightly higher proportions of their scientists in the biosciences and the physical sciences. Smaller companies showed much heavier proportions in pharmacy and pharmaceutical chemistry and the clinical medical sciences. 7. The 23 largest companies added nearly 500 research scientists between 1959 and 1961; roughly 300 or 60 percent of the increment were doctoral level researchers. 8. Pharmaceutical firms indicated needs for some 600 additional research scientists in 1962, representing 8 percent of the present staff. This demand was greatest in the fields of chemistry, pharmacology, and microbiology. Additional requirements reported by smaller firms (those with sales less than $30 million) exceeded 20 percent of their present research staffs. 9. Expenditures per research scientist have risen gradually over the past 3 years, from about $24,000 in 1959 to $26,000 in 1961. EMPLOYMENT TRENDS In 1961 the pharmaceutical industry employed approximately 13,500 scientists and supporting personnel in medical and health-related research1 as compared with 12,900 in 1960 and 11,400 in 1959. It is estimated that the 86 companies from whom reports were received account for 90 percent of pharmaceutical industry sales. The addition of roughly 2,000 research workers represents an increase of 18 percent over the number employed in 1959. It should be noted, however, that three-fourths of this increase took place between 1959 and 1960, with only a modest proportionate gain between 1960 and 1961. The percentage increase over present employment of scientific staff represented by reported needs is nearly inversely proportional to company sales, as measured by the total for each sales group. In sales groups A and B (for sizes, see footnote table 2) firms, for example, additional needs represent 5 and 8 percent, respectively, of 1961 employment. However, firms in group C ($5 million to $30 million) reported a need for 205 more scientists-slightly over one-fifth of present staff. This was both the largest number required as well as the highest proportion. The additional needs expressed by group D firms for 57 more scientific personnel represent a 20-percent increase in staff. HOWARD L. BINKLEY, Director of Economic Research. 1 Includes personnel engaged in research. research administration, clinical evaluation and development; excludes personnel in promotion, sales, business administration, production, and quality control. TABLE 1.-Research manpower in the pharmaceutical industry by level of training and type of personnel, 1961 TABLE 2.-Research manpower in the pharmaceutical industry by sales group and by type of personnel, 1961 1 A-$100,000,000 and over; B-$30,000,000 to $100,000,000; C-$5,000,000 to $30,000,000; D-less than $5,000,000. TABLE 3.-Research manpower in the pharmaceutical industry by type of personnel, 1959-61 TABLE 4.-Number and percent distribution of scientific staff engaged in research in the pharmaceutical industry by major field, 1959–61 |