A report from the left-leaning Accountable US found that eight pharmaceutical companies that make the 10 drugs whose prices are currently being negotiated by Medicare spent more on stock buybacks, dividends, marketing and administrative expenses last year than on research and development. It is said that they spent billions of dollars more. -Leaned watchdog groups.
According to the report, eight companies – Johnson & Johnson, Amgen, AstraZeneca, Bristol-Myers Squibb, Eli Lilly, Merck, Novartis and Novo Nordisk – spent $95.9 billion on research and development, compared to The company reportedly spent $162 billion on stock buybacks and dividends. Approximately $500 million will be spent on marketing and administrative costs, as well as board and executive compensation.
“Additionally, these companies spent at least $83.2 million on industry association dues, $10.6 million on political contributions, and $57.8 million on lobbying in 2023 alone,” Accountable.US added. “Meanwhile, according to financial reports, these companies brought in a total of $367 billion in sales in 2023.”
The group said Johnson & Johnson, Bristol-Myers Squibb, Novartis and Novo Nordisk spent more on payments to various shareholders than on research and development. Five companies spent more on administrative and marketing expenses than on R&D. Only Merck & Co. invests more in research and development than in shareholder payments, executive compensation, and marketing and administrative costs.
Six of the companies filed suit seeking to block Medicare price negotiations first enacted under the Inflation Control Act of 2022.
“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.”
A spokesperson for the U.S. Pharmaceutical Research and Manufacturing Industry Association dismissed the report when contacted by The Hill. “This comparison is a myth we often hear. Marketing often lumps everything together, from shipping to distribution to office supplies,” they said. “In fact, the biopharmaceutical industry is one of the most research-intensive industries in America. Companies invested $122 billion in research and development in 2020, and we accounted for more than every other manufacturing industry in sales. We invest an average of 6x more in research and development.”
