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WASHINGTON, DC — A new report from government watchdog Accountable.US details how the eight pharmaceutical companies that manufacture the ten medications chosen for Medicare price negotiation by the Biden administration have spent far less on research and development compared to what they spent on other priorities like political activity, executive compensation and handouts to wealthy investors. All but one of these companies are members of PhRMA, which is suing to block Medicare’s authority to negotiate lower drug prices – with many of the companies leading their own lawsuits – while claiming that more affordable medicines will hamper their investments in R&D. It is the same excuse pharmaceutical industry lobbyists have used for years to the question of why the industry charges U.S. seniors and patients by far the highest prescription prices in the world – leaving 1-in-4 Americans unable to afford their prescribed medicines.

However, recent SEC filings and earnings reports shows that these companies – Johnson & Johnson, Amgen, AstraZeneca, Bristol Myers Squibb, Eli Lilly, Merck, Novartis and Novo Nordisk – have collectively spent a total of $95.9 billion on research and development expenses, compared to $162 billion on stock buybacks, dividends, and marketing and administrative costs and nearly $500 million on compensation for their boards and executives. Additionally, these companies spent at least $83.2 million on trade association dues, $10.6 million on political contributions and $57.8 million on lobbying, all in 2023 alone. Meanwhile, these companies pulled in a combined $367 billion in sales in 2023, according to their financial filings.

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Big Pharma CEOs often cite investments in R&D to excuse charging U.S. seniors the highest prices in the world for life-saving medicines – but they never put that spending in proper perspective. The fact is, Big Pharma’s R&D investment is vastly outpaced by billions upon billions in industry profits, rewards to wealthy investors, marketing, and on lobbying and political spending sprees."

Accountable.US Executive Director Tony Carrk

“Despite what Big Pharma’s lawyers and lobbyists claim, executives could have passed record profits onto patients with more reasonable prices. They could have spent less on lobbying and enriching executives than charging thousands more for a single cancer or diabetes treatment pill. But time and again, the big drug industry chose greed to benefit the wealthy few at the expense of millions of seniors and sick patients,” added Carrk.

In addition, Accountable.US found that four of the companies — Johnson & Johnson, Bristol Myers Squibb, Novartis and Novo Nordisk — spent more on combined payments to shareholders in the form of stock buybacks and dividends than they did on research and development in 2023. Five of the eight companies — Johnson & Johnson, Amgen, AstraZeneca, Novartis and Novo Nordisk — spent more on administrative and marketing expenses than research and development in 2023.

Accountable.US’ report comes as the CMS recently released its draft guidance for the second round of pricing negotiations with involved drug manufacturers  – which PhRMA wasted no time smearing, claiming the agency “continues to undervalue and discourage the research and development of medicines.”  

The findings also follow new national polling showing strong support for President Biden’s efforts to lower prescription drug prices and stand up to big drug companies. 

Read the full report. 

 

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