Largest drug companies profited more than $700 billion in decade, analysis estimates
|In 2012, the drug companies’ profits reached $83.9 billion, 62 percent higher than in 2003.|
The 11 largest drug companies took $711.4 billion in profits over the 10 years ending in 2012, according to an analysis of corporate filings by Health Care for America Now (HCAN). The global pharmaceutical industry derived much of that profit from the Medicare Part D prescription drug program for seniors and people with disabilities, the analysis states.
In 2012, the drug companies’ profits reached $83.9 billion, 62 percent higher than in 2003.
HCAN reviewed the last decade’s financial filings from 11 prescription drug giants: Pfizer, Johnson & Johnson, Novartis, Merck, Roche, Sanofi-Aventis, GlaxoSmithKline, Abbott Laboratories, AstraZeneca, Eli Lilly and Bristol-Myers Squibb.
The companies’ profits surged in 2006, the first year of Medicare’s Part D prescription drug program.
The 11 drug companies booked $76.3 billion in profits in 2006 -- a 34 percent increase from the previous year. Medicare -- the largest purchaser in the world’s largest drug market -- is prohibited by law from seeking better prices.
Empowering Medicare to get the same bulk purchasing discounts on prescription drugs as state Medicaid programs already get would save the federal government $137 billion over 10 years, according to the Congressional Budget Office.
This proposal has been supported by President Obama and is in the House Democrats’ budget plan.
Drug makers charge customers in the U.S. -- especially the government -- more for the same drugs than they do in places like Canada and Europe, where government health plans bargain with the drug companies. Per capita drug spending in the U.S. is about 40 percent higher than in Canada, 75 percent greater than in Japan and nearly triple the amount spent in Denmark.
The drug companies say they must impose higher prices in the U.S. to pay for research that enables them to innovate and develop new drugs that save our lives. Half of the scientifically innovative drugs approved in the U.S. from 1998 to 2007 resulted from research at universities and biotech firms, not big drug companies, research shows. Drug companies spend 19 times more on marketing than on research and development.