A new report from the center-left watchdog group Accountable US found that most major drugmakers spent more on marketing costs and shareholder payments than on research & development.
The report looked at eight companies that manufacture the 10 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.
Among 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 developing drugs.
Merck was the sole company in the report that spent more on research and development than it did 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, sued to block the government’s Medicare negotiation program. Several federal judges having ruled in favor of upholding the program.
“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,” Accountable US Executive Director Tony Carrk said in a statement.
“The fact is, pharma industry R&D investment is vastly outpaced by billions upon billions in industry profits, rewards to wealthy investors, and on lobbying and political spending sprees,” Carrk added. “Despite what Big Pharma’s lawyers and lobbyists claim, executives could have passed record profits onto patients with more reasonable prices.”
The report also noted that several of the drugmakers have in recent years made new hefty acquisitions or have announced plans to acquire new companies. AstraZeneca, Amgen, Bristol Myers Squibb and Eli Lilly all acquired new companies in 2023 totalling roughly $38 billion in spending.
The Hill has reached out to the companies listed in the report as well as the pharmaceutical trade group PhRMA for comment.