You are comparing the research and development (R&D) expenditures of two pharmaceutical companies, Pfizer Inc. and Merck & Co., for the fiscal year 2023.

Requirements:

1. Pfizer reported R&D expenditures of $10 billion for the fiscal year 2023. Merck reported R&D expenditures of $8.5 billion during the same period.
2. Calculate the percentage difference in R&D expenditures between Pfizer and Merck.
3. Analyze and discuss the implications of the difference in R&D expenditures on their respective drug pipelines and innovation capabilities.