Sorry PhRMA, pharma making record profits

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  • The health care industry has already banked more profits than any other quarter in the past year.
  • As of Aug. 2, 85 publicly traded health care companies have amassed $47 billion of global profit on $545 billion of global revenue in the second quarter.
  • That profit is higher than the $45.6 billion that 118 health care companies posted in the first quarter of this year, and it’s higher than anything recorded in the past year.
  • Pharmaceutical companies continue to rake in the highest profit margins.

Ninety-nine of the largest publicly traded health care companies cumulatively collected $33 billion of profit and $577 billion of revenue worldwide in the third quarter this year, according to earnings reports. Pharma companies collected more than 60% of those profits, but only 22% of the revenue.

  • Eight of the 15 highest net profit margins were at drug companies.
  • Twelve of the 15 highest net profit totals were at drug companies.

Yet PhRMA continues to broadcast their propaganda while patients are dealing with higher co-pays and health insurance rates.

If you thought drug companies cut sales price increases the few companies that actually cut prices most targeted old products that no longer produce much revenue — such as Merck’s 60 percent discount to a hepatitis C medicine that had no U.S. revenues in the first quarter.

Analysts are in broad agreement that the spate of recent concessions won’t hurt bottom lines, or rein in drug prices beyond this six-month period, because many companies already increased prices this year — in some cases, just weeks before publicly pledging to freeze them for the rest of 2018.

The HHS secretary’s rhetoric about high drug prices often targets pharmacy benefits managers not drug companies. Targeting the middlemen is a play directly out of pharma’s strategy book — drug companies have long sought to pin patients’ frustration with rising costs on PBM and PhRMA has been actively using that playbook.

This, of course, plays right into the media’s stories on big pharma which in turn leads to more people asking for big pharma’s head on a plate. The question is not whether pharma makes life saving drugs, the question is “can patients afford them?” . PhRMA’s talking points about investing in R&D also seem moot when we learned that more pharma companies are canning R&D into new antibiotics and Alzheimer’s treatments.

Moguls like Jeff Bezos and Elon Must are using their vast fortunes to start space travel ventures. Perhaps it would be more beneficial for them to tackle our multi-layered health care system that puts profits over patients.

But hey, pharma still has magazine awards to make them feel better.

Originally published at on August 5, 2018.

Written by

Marketing contrarian with over 15 years of developing leading edge and award winning digital marketing initiatives.

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