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Roche and Novartis R&D spending hits global record but shrinks in Switzerland

Sign and logo of Novartis building in Basel

Despite a combined $2.1 billion decrease in spending over the last year, pharma giants Novartis and Roche still invested far more than any other Swiss companies.

(© KEYSTONE / GEORGIOS KEFALAS)

Although worldwide research and development (R&D) expenditures have reached an all-time high of $782 billion (CHF786 billion), budgets in Switzerland have declined by 10%.

Those are the latest findings from the PwC auditing and consulting firm, released on Wednesday as part of its 2018 Global Innovation 1000 studyexternal link.

The biggest Swiss companies invested CHF27.7 billion ($27.5 billion) in research overall in 2018. The decline in Swiss investments mainly comes from Basel-based pharmaceutical companies Roche and Novartis. According to PwC, Roche spent around $1 billion less on R&D between 2017 and 2018, going from $11.8 billion to $10.9 billion, while Novartis spent $1.1 billion less, going from $9.6 billion to $8.5 billion.

The two pharma giants are ranked 8th and 12th respectively on PwC’s list of the top 1,000 corporate R&D spenders worldwide between 2012 and 2018, down from 7th and 10th last year. However, they still spent far more than any other Swiss companies. Next on the list were Nestlé, which ranked 94th with R&D investments of $1.8 billion, and engineering group ABB, which ranked 115th with investments of $1.4 billion.

As far as global leaders, Amazon came out on top with $22.6 billion in R&D investments.

However, the study authors also note that companies that have the best reputation as innovators aren’t necessarily those that spend the most on R&D, and that companies that are perceived as being innovative tend to be more financially successful.

“Large investments alone are not enough to promote innovation,” explained Peter Kasahara of PwC Switzerland. “It requires a deep understanding of the needs of end consumers and focusing research projects on the right core areas.”

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