BIG PHARMA POLITICS: Consumers pressure politicians to do something about rising drug prices. Read More
Research published recently in the Journal of the American Medical Association finds business for most pharmaceutical companies is good. As in very profitable.
Between 2000 and 2018, 35 big drug companies brought in a combined revenue of $11.5 trillion, with a gross profit of $8.6 trillion.
While a trillion dollars is difficult for most of us to conceive, the report puts pharmaceutical profits in a context that’s somewhat easier to understand: The median net income margin – which means the percent of revenue received after all expenses are deducted – was 13.7 percent. That’s almost twice as high as 357 non-pharma companies in the Standard & Poor’s 500, used by the authors for comparison. Their profit margin? 7.7 percent.
At the same time Big Pharma’s profits are up, the industry’s favorability rankings hit an all-time low with Americans.
A 2019 Gallup survey found the pharmaceutical industry was the most poorly regarded industry in the nation, ranking last on a list of industries Gallup tests each year.
Americans are more than twice as likely to rate the pharmaceutical industry negatively (58 percent) as positively (27 percent).