With changes, 22 companies are no longer members

WASHINGTON — The Pharmaceutical Research and Manufacturers of America (PhRMA) this week approved new criteria for membership.

With the move, biopharmaceutical companies will have to meet new research-and-development requirements to be eligible to join the organization. PhRMA said the updated membership criteria, which go into effect immediately, came after a three-month review by its board of directors.

After this review, the board voted to drop the “associate” category of PhRMA membership and require companies to have a three-year average global R&D to global sales ratio of 10% or more and three-year average global R&D spending of at least $200 million annually.

Stephen Ubl

The elimination of the associate category means that 15 companies are no longer members, PhRMA said, adding that these firms can apply for full membership if eligible. Also, seven full-member companies are no longer eligible for membership because they don’t meet the new criteria, based on membership information as of Jan. 1, according to PhRMA. Companies can reapply for membership as they meet the new requirements.

PhRMA said the goal of the new criteria is to ensure that the association represents companies dedicated to researching and developing new, cutting-edge therapies for patients.

“We believe our association is best positioned to represent companies that are swinging for the fences and making the long-term investments needed to tackle the biggest challenges facing patients,” stated Stephen Ubl, president and chief executive officer of PhRMA. “Advances in medical discovery are the result of collaboration across the complex ecosystem. There is a lot of exciting science happening at emerging biopharmaceutical companies, and as those companies grow and build out their R&D infrastructure we hope they will choose to join PhRMA.”

The association noted that most member companies invest much more in R&D than required by the new criteria. On average, PhRMA members invest 20% of their sales in R&D, with the biopharmaceutical sector representing 17% of all domestic R&D funded by U.S. businesses, versus 13% for software, 5% for automobiles and 4% aerospace industries.

“By putting in place new membership criteria, the board is sending a clear message that being a member of PhRMA means being committed to doing the time-intensive, scientifically sound research it takes to bring bold new advances in treatments and cures to patients,” commented PhRMA chairman Joaquin Duato, who is worldwide chairman of pharmaceuticals for Johnson & Johnson.

PhRMA said it takes, on average, more than a decade and $2 billion to research and develop a new medication. What’s more, nine out of 10 drugs entering clinical trials never make it to patients.

“It is exactly this trial-and-error process that propels innovation forward,” according to Ubl. “As a result of the perseverance of biopharmaceutical researchers, we are living in a new era of medicine in which scientists know more about the human body than ever before and can attack diseases at the molecular level. This knowledge is transforming how we research and treat Alzheimer’s disease, cancer, heart disease, mental health conditions and many other devastating health conditions.”