A new report from the center-left watchdog group Accountable US shows that most major drugmakers spend more on marketing costs and shareholder payments than on research and development.
The report looked at eight companies that produce the ten drugs whose prices are currently being negotiated by the Centers for Medicare & Medicaid (CMS). These companies include Johnson & Johnson, Amgen, AstraZeneca, Bristol Myers Squibb, Eli Lilly, Merck, Novartis and Novo Nordisk.
Of these eight companies, four – Johnson & Johnson, Bristol Myers Squibb, Novartis and Novo Nordisk – spent more on combined shareholder payments than on research and development.
Five of the companies – Johnson & Johnson, Amgen, AstraZeneca, Novartis and Novo Nordisk – spent more on administrative and marketing costs than on drug development.
Merck was the only company in the report that spent more on research and development than on executive compensation, marketing, administration and shareholder payments.
Most of the companies in the report, Johnson & Johnson, Bristol Myers Squibb, AstraZeneca, Novo Nordisk, Novartis and Merck, have filed suit to block the government's Medicare bargaining program. Several federal judges have ruled in favor of maintaining the program.
“Big Pharma CEOs often cite R&D investments as an excuse to charge American seniors the highest prices in the world for life-saving drugs – but they never put that spending into perspective,” US Executive Director Tony Carrk said in a statement .
“The fact is that R&D investments in the pharmaceutical industry are vastly exceeded by billions and billions in industry profits, rich investor rewards, lobbying and political spending,” Carrk added. “Despite what Big Pharma lawyers and lobbyists claim, executives could have passed on record profits to patients at more reasonable prices.”
The report also noted that several drugmakers have made new major acquisitions or announced plans to acquire new companies in recent years. AstraZeneca, Amgen, Bristol Myers Squibb and Eli Lilly have all acquired new companies in 2023 for a total of about $38 billion in spend.
The Hill has contacted the companies mentioned in the report and the pharmaceutical trade group PhRMA for comment.
