NEW REPORT: GREED WATCH: Big Drug Companies Continue to Put Profits Over People

Big Drug Companies Raked in $22.3 Billion in Profits in the Second Quarter of 2024, Spent Nearly $27 Million on Lobbying, and Spent $62 Billion On Stock Buybacks and Dividends In The First Half of 2024

Big drug companies have raked in eye-popping revenues this year. 14 of the biggest drug companies reported $184.2 billion in revenue between April and June, and over $22 billion in net profits, reflecting the record-high prices these companies charge for drugs.

Drug companies have been allowed to charge whatever they want for too long. They make billions while charging Americans prices up to eight times higher than in other high-income countries like Germany or Australia, forcing patients to cut pills and skip doses to make ends meet. Fortunately, the Biden-Harris administration and Democrats in Congress passed the Inflation Reduction Act, lowering drug costs for people on Medicare by finally giving Medicare the power to negotiate lower drug prices.

Drug companies are also rewarding their shareholders handsomely rather than making their products more affordable to patients. The fourteen companies have spent hundreds of millions or billions on dividends and stock buybacks this year so far. Additionally, Bristol Myers Squibb, Novartis, and Novo Nordisk spent more lining the pockets of shareholders than on their research and development budgets. Research shows that pharmaceutical manufacturers could lose $1 trillion in revenue over a decade and still be the most profitable industry.

Table 1: Q2 2024 Big Drug Company Revenue, Profits, and Spending

* dividends only
** share repurchases only
*** unreported or net loss
**** data not reported on a quarterly basis
a CHF converted to USD based on the average quarterly exchange rate of 0.90 CHF to $1.00
b EUR converted to USD based on the average quarterly exchange rate of €0.935 to $1.00
c DKK converted to USD based on the average quarterly exchange rate of 6.971 kr. to $1.00
d GBP converted to USD based on the average quarterly exchange rate of £0.791 to $1.00
e  Roche H1 numbers included in quarterly total, since Q1/Q2 numbers are unavailable

Big Drug Companies Remain Highly Profitable & Expanded Investment Activity This Quarter, Countering the False Claims that Medicare Negotiation Undermines Innovation.

In the year following the passage of the Inflation Reduction Act, drug companies increased investment in bringing new drugs to market through higher spending on research, development, and acquisitions. In fact, following the passage of the Inflation Reduction Act, investment in research and development spending reached $161 billion in 2023, a 16.6 percent increase over 2022 and a nearly 50 percent increase since 2018. And despite the big drug companies arguing that the new law disincentivizes investment in small molecule drugs, a recent investor report confirms that the opposite is true. 

Big drug companies continue to harp on the Inflation Reduction Act, pushing lawsuits to halt Medicare Negotiation and claiming it hurts innovation – all while touting innovative new drug portfolios to Wall Street:

• Johnson & Johnson CEO Joaquin Duato touted his company’s “relentless focus on advancing the next wave of medical innovation” and admitted that he anticipated his business “growing 3% plus next year and then 5% to 7% out through 2030” – despite Medicare Negotiation impacting three separate drugs manufactured by Johnson & Johnson. The company also spent approximately $17 billion purchasing new products for its pipeline in the first six months of 2024.
• AstraZeneca executive Dave Frederickson admitted, “I think that IRA represents a couple of headwinds that we’ve spoken through, I think that they’re manageable, and I think we’ve got a portfolio that allows us to grow through it” – despite suing to overturn the Negotiation Program so they can continue to charge whatever they want for their drugs. The company also spent $2.4 billion to acquire Fusion Pharmaceuticals, Inc. in June 2024 and over $1 billion to acquire Amolyt Pharma in July 2024.
• Merck CEO Robert Davis bragged about “the growing breadth of our pipeline,” noting, “We have the potential to bring as many new drugs to market in the next five years, as we launched over the next ten years, across a greater number of therapeutic areas and modalities and with a significant proportion having blockbuster-plus potential” – all despite suing the federal government to halt Medicare Negotiation. The company also acquired two additional companies for a combined $2.6 billion in 2024.
• Eli Lilly CEO David A. Ricks attributed massive quarterly revenue growth of 36 percent year-over-year in part to the continued success of Jardiance, a drug whose list price has doubled since it launched over a decade ago. Ricks serves on the board of directors for pharmaceutical trade group PhRMA, which is suing to block Medicare Negotiation so drug companies can continue charging whatever they want for drugs. The company also announced an agreement to acquire Morphic for approximately $3.2 billion this quarter.

The Companies Manufacturing Drugs Being Negotiated By Medicare Brought In Billions in Revenue and Profits from Taxpayers and Patients and Spent It Lavishly To Reward Shareholders.

This quarter, the ten drugs selected for Medicare’s first round of negotiations brought in $18.1 billion in revenue, while the companies that manufacture these drugs raked in $16.2 billion in combined profits and spent nearly $25 billion rewarding shareholders in the form of stock buybacks and dividends:

• Amgen, the manufacturer of Enbrel, reported $8.4 billion in revenue and spent $1.2 billion on dividends for investors. Amgen has increased the price of Enbrel by 701 percent since it launched.
• AstraZeneca, the manufacturer of Farxiga, reported $12.9 billion in revenue and $1.9 billion in net profits. AstraZeneca has increased the price of Farxiga by nearly 87 percent since it launched.
• Bristol Myers Squibb, which jointly manufactures Eliquis with Pfizer, raked in $1.7 billion in profits this quarter. Bristol Myers Squibb and Pfizer have increased the price of Eliquis by 124 percent since it launched.
• Johnson & Johnson, which manufactures three of the ten drugs with lower prices being negotiated – Xarelto, Stelara, and Imbruvica – made $22.4 billion in revenue and $4.7 billion in net profits, while spending $136 million on stock buybacks. Johnson & Johnson has increased the price of Stelara by nearly 185 percent since it launched.
• Merck, which manufactures Januvia, raked in $16.1 billion in revenue and $5.5 billion in net profits and spent more than $251 million on shareholder compensation. Merck has increased the price of Januvia by 293 percent since it launched.
• Novartis, which manufactures Entresto, reported $12.5 billion in revenue and $3.2 billion in net profits while spending $11.3 billion on investors. Novartis has increased the price of Entresto by 83 percent since it launched.
• Novo Nordisk, the manufacturer of Fiasp/NovoLog, far exceeded even their earnings expectations, bringing in $9.8 billion in revenue and $2.9 billion in net profits while spending $2.5 billion on shareholder compensation. Novo Nordisk has increased the price of the drug by 82 percent since it launched.
• AbbVie, which jointly markets Imbruvica with Johnson & Johnson, brought in $14.5 billion in revenue and $1.4  billion in net profits this quarter. AbbVie and Johnson & Johnson have increased the price of the drug by 114 percent since it launched.
• Eli Lilly, which jointly markets Jardiance with privately-held Boehringer Ingelheim, brought in $11.3 billion in revenue and $3.0 billion in net profits while rewarding shareholders with over $1 billion in dividends. Eli Lilly and Boehringer Ingelheim have increased the price of the drug by 103 percent since it launched.
• Pfizer, which jointly markets Eliquis with Bristol Myers Squibb, brought in $13.3 billion in revenue and $41 million in net profits and spent $2.4 billion rewarding shareholders with dividend payments.

Table 2: Q2 2024 Revenue For Drugs Selected For Medicare Negotiation

*Revenue for Jardiance, which is co-manufactured by Boehringer Ingelheim, only includes Eli Lilly.

Big Drug Companies Are Suing to Block Medicare from Negotiating Lower Prices and Spending Millions On Lobbying. 

Big drug companies are suing to ban Medicare from negotiating lower prescription drug prices for millions of Americans. If they get their way, patients will pay more so the drug companies can make more money. Seven big drug companies have filed separate lawsuits against the federal government to overturn the Inflation Reduction Act, and multiple lobbying groups representing big drug companies have also filed lawsuits. These lawsuits have already faced serious setbacks; drug companies are zero for six in the courts. This quarter alone, a New Jersey district court rejected Novo Nordisk’s case, and a federal judge in Connecticut rejected Jardiance co-manufacturer Boehringer Ingelheim’s case.

Meanwhile, these same drug companies and their allies are spending millions of dollars lobbying Congress to protect their profits. 16 of the biggest drug companies spent $26.8 million this quarter on lobbying. Big drug companies have already been increasing their lobbying efforts dramatically, this year with industry group PhRMA’s advocacy spending growing 20 percent last quarter compared to 2024.

Table 3: Big Drug Companies Spent Nearly $27 Million On Lobbying In Q2 2024