Drug firms' high IT spend reflects emphasis on R&D but outsourcing takes its cut


Drug firms' high IT spend reflects emphasis on R&D but outsourcing takes its cut

Business Focus is a weekly column providing at-a-glance statistics and commentary on spending priorities and trends in particular sectors. This week we look at the pharmaceuticals industry.


Pharmaceuticals manufacturers are big investors in research and development, so it is not surprising that their technology spend is well above the UK average.


Among large pharmaceuticals businesses, annual IT expenditure per desktop is £12,589, 49% higher than the UK business average of £8,455.


Among smaller pharmaceuticals firms the differential in technology spend is even more marked, with an average spend of £5,699 per desktop, 82% higher than the UK average spend among SMEs of £3,132.


Large pharmaceuticals companies spend more than the industry average on hardware, software, services and staffing, but it is their spend on IT services – £5,039, against the £3,052 UK average – that is most striking, illustrating the sector’s widespread use of outsourcing.


This is mirrored among small pharmaceuticals businesses, which spend an average of £1,658 per desktop each year on IT services – or nearly double the £850 average among all UK SMEs. The £1,658 figure accounts for a greater proportion of pharmaceuticals firms’ IT spend than any other category, although in-house IT staff clearly still have their place, accounting for £1,449 of annual spend per desktop, well up on the equivalent figure among all SMEs of £728.


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This was first published in May 2006


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