R&D spending has been relatively stagnant. While industry revenue increased by 45 percent, or $241 billion from 2008 to 2014, industry spending on R&D increased just 8.5 percent in that same period, from $82 billion to $89 billion (GAO 2017). By some measures, R&D expenditures are actually falling, as more firms are outsourcing R&D to third parties. In that seven-year period, purchased R&D increased from $20.5 billion to $31.2 billion while in-house R&D fell from $61.7 to $58.2 billion (GAO 2017). Finally, the industry can only claim partial credit for recent medical breakthroughs. The federal funding provided by taxpayers contributes around 25 to 30 percent of all R&D spending per year, and a Bentley College study found that all 210 drugs approved between 2010 and 2016 were rooted, in whole or in part, on National Institute of Health (NIH)-funded research (Cleary et al. 2017).

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