Pharmaceutical companies involved in Medicare negotiations spent more on shareholder payments and marketing than on research and development last year: Report

A new report from the center-left watchdog group Accountable US found that most major drug companies spend more on marketing and shareholder payments than on research and development (R&D).

The report identifies eight companies (Johnson & Johnson, Amgen, AstraZeneca, Bristol-Myers Squibb, Eli Lilly, Merck, Novartis, and Novo Nordisk). ).

Of these eight companies, four spent more on shareholder payments than on research and development: J&J, Bristol-Myers Squibb, Novartis, and Novo Nordisk.

Five of the companies (J&J, Amgen, AstraZeneca, Novartis, and Novo Nordisk) spent more on administrative and marketing costs than on drug development.

Merck & Co. was the only company in the report that spent more on research and development than on executive compensation, marketing, management and shareholder payments.

Most of the companies mentioned in the report, J&J, Bristol-Myers Squibb, AstraZeneca, Novo Nordisk, Novartis, and Merck, have filed lawsuits seeking to block the government's Medicare negotiation program. Several federal judges have ruled in favor of the program.

“CEOs of major pharmaceutical companies often cite investments in research and development to excuse charging older Americans the highest prices in the world for lifesaving medicines. many, but they never consider that spending in its proper perspective,” U.S. Director Tony Kirk said in a statement.

“The reality is that the pharmaceutical industry's R&D investments far outweigh industry profits, rewards to wealthy investors, and massive lobbying and political spending,” Kirk added. “Despite the claims of Big Pharma's lawyers and lobbyists, management could have passed on record profits to patients at a more reasonable price.”

The report also noted that several pharmaceutical companies have made large new acquisitions or announced plans to acquire new companies in recent years. AstraZeneca, Amgen, Bristol-Myers Squibb and Eli Lilly all acquired new companies in 2023, spending a total of about $38 billion.

The Hill has reached out to the companies named in the report and the pharmaceutical industry group Pharmaceutical Research and Manufacturers of America for comment.