To stay alive, pharmaceutical companies have to continually develop new drugs to replace the ones that go off patent. But the amount they spend on research and development relative to their revenue varies widely, with Merck (NYSE:MRK), AstraZeneca (NYSE:AZN), Roche (NASDAQOTH:RHHBY), Bristol-Myers Squibb (NYSE:BMY), and Eli Lilly (NYSE:LLY) topping the chart.
Unfortunately, with long development cycles, we won't know for a few years whether the extra dollars being thrown into research and development now will ultimately benefit the companies. In the slide show below, find out more about the reasons behind the companies shelling out so much cash to develop new drugs.
Looking for more dividend ideas?
One of the reasons investors buy pharmaceutical companies if for their dividend, but there's a wide variety of companies that share their profits with investors each quarter. Our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.
Brian Orelli and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.