Drug companies planning to raise prices on cancer drugs and other life-saving treatments are justifying the move by claiming it’s necessary to fund research and development, but the claim rings hollow given that they spend more on shareholder rewards than on R&D, according to a new study.
Accountable.US, a liberal-leaning consumer-advocacy group, found that in the period from 2019 to 2021, the five biggest U.S. drug companies spent $112 billion on R&D, but $125 billon on stock buybacks and dividends. Accountable.US did a dive into 2021 and 2022 earnings from Pfizer Inc. PFE , Bristol Myers Squibb Co. BMY , AstraZeneca PLC AZN AZN and Sanofi SA SAN SNY and found that all four are planning to raise drug prices, even after strong gains in earnings and heavy spending on shareholder returns.Pfizer, for example, enjoyed a 140% increase in net income in 2021 followed by a 42% increase in the first nine months of 2022.
Sanofi said the report mischaracterizes its work, “and seeks to draw correlations that are misleading at best. The four companies have donated more than $500,000 to House Republican leaders and nearly $300,000 to Republican current members of the House Financial Services Committee, she observed. Patrick McHenry, the North Carolina Republican who chairs the financial-services committee, alone received $130,000.