Following the Labor Department’s latest Consumer Price Index (CPI) report, a new analysis from government watchdog Accountable.US found big drug companies that are reportedly set to raise prices on over 350 medications are doing so out of greed, not necessity. A review of 2022 earnings reveals pharmaceutical giants Pfizer, Bristol Myers Squibb (BMS), AstraZeneca, and Sanofi reported billions in increased earnings, stock buybacks, and dividends before announcing price hikes in January.
Among the findings, Pfizer plans to increase the prices of nearly 100 drugs, including “7.9% increases on cancer drugs Ibrance And Xalkori” despite seeing a 140% increase in net earnings in 2021 and a 42% increase in the first nine months of 2022. Meanwhile, Pfizer has spent $2 billion on stock buybacks and $6.7 billion on shareholder dividends in 2022 so far.
The excuses big drug companies make for lifting prices higher and higher on life-saving medication don’t add up based on their own earnings reports. The industry’s latest unjustified price hikes on families and seniors follow a massive uptick in corporate earnings and giveaways to shareholders. Pharma executives like to hide behind R&D expenses yet they pale in comparison to oversized handouts to a small group of wealthy investors. Only an industry so consumed by greed could look at already exorbitantly expensive cancer treatments and see no price ceiling.”
Liz Zelnick, Director of Accountable.US’ Economic Security & Corporate Power program
At Issue: The pharmaceutical industry often claims that price increases are necessary to fund research and development. In reality, a recent Accountable.US review found that the five-biggest U.S.-based pharmaceutical companies’ $112 billion in R&D spending from 2019 through 2021 had been outpaced by the $125 billion they spent on stock buybacks and dividends over the same period. It suggests the industry’s continued price hikes are a way to extract more money from patients in need and redistribute it to wealthy shareholders.
The latest indicators show the economy is recovering, yet the Federal Reserve seems determined to stop it in its tracks with more aggressive interest rate hikes that threaten millions of jobs and invite a recession. The Fed’s one-track-minded approach to inflation does not adequately address what’s really driving it – corporate greed. Corporations like big pharma keep marking up prices on everyday families despite reporting high profits and rewarding investors in the billions of dollars. Corporate profiteering is a problem that requires Congressional action, but no one is expecting much from the new MAGA House majority that’s in the pocket of industries like big pharma. MAGA extremists would rather perform political stunts against the Biden administration than lower costs for everyday Americans.”
A previous Accountable.US report highlighted how many of these companies, alongside industry trade group PhRMA, had spent over $205 million in recent years fighting efforts to rein in the cost of prescription drugs. Accountable.US found the four companies highlighted in its new analysis have donated over $800,000 in career contributions to conservative extremists of the 118th Congress, including over $500,000 to House Republican leaders and nearly $300,000 to current House Financial Services Committee (HFSC) Republicans, with HFSC Chair Patrick McHenry (R-NC) receiving $130,000 alone.