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Profitability of Large Pharmaceutical Companies Compared With Other Large Public Companies.

ABSTRACT: Importance:Understanding the profitability of pharmaceutical companies is essential to formulating evidence-based policies to reduce drug costs while maintaining the industry's ability to innovate and provide essential medicines. Objective:To compare the profitability of large pharmaceutical companies with other large companies. Design, Setting, and Participants:This cross-sectional study compared the annual profits of 35 large pharmaceutical companies with 357 companies in the S&P 500 Index from 2000 to 2018 using information from annual financial reports. A statistically significant differential profit margin favoring pharmaceutical companies was evidence of greater profitability. Exposures:Large pharmaceutical vs nonpharmaceutical companies. Main Outcomes and Measures:The main outcomes were revenue and 3 measures of annual profit: gross profit (revenue minus the cost of goods sold); earnings before interest, taxes, depreciation, and amortization (EBITDA; pretax profit from core business activities); and net income, also referred to as earnings (difference between all revenues and expenses). Profit measures are described as cumulative for all companies from 2000 to 2018 or annual profit as a fraction of revenue (margin). Results:From 2000 to 2018, 35 large pharmaceutical companies reported cumulative revenue of $11.5 trillion, gross profit of $8.6 trillion, EBITDA of $3.7 trillion, and net income of $1.9 trillion, while 357 S&P 500 companies reported cumulative revenue of $130.5 trillion, gross profit of $42.1 trillion, EBITDA of $22.8 trillion, and net income of $9.4 trillion. In bivariable regression models, the median annual profit margins of pharmaceutical companies were significantly greater than those of S&P 500 companies (gross profit margin: 76.5% vs 37.4%; difference, 39.1% [95% CI, 32.5%-45.7%]; P?

SUBMITTER: Ledley FD

PROVIDER: S-EPMC7054843 | biostudies-literature | 2020 Mar

REPOSITORIES: biostudies-literature

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Profitability of Large Pharmaceutical Companies Compared With Other Large Public Companies.

Ledley Fred D FD McCoy Sarah Shonka SS Vaughan Gregory G Cleary Ekaterina Galkina EG

JAMA 20200301 9

<h4>Importance</h4>Understanding the profitability of pharmaceutical companies is essential to formulating evidence-based policies to reduce drug costs while maintaining the industry's ability to innovate and provide essential medicines.<h4>Objective</h4>To compare the profitability of large pharmaceutical companies with other large companies.<h4>Design, setting, and participants</h4>This cross-sectional study compared the annual profits of 35 large pharmaceutical companies with 357 companies in ...[more]

PMID: 32125401

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Project description:OBJECTIVES:To define a series of clinical trial transparency measures and apply them to large pharmaceutical and biotechnology companies and their 2014 FDA-approved drugs. DESIGN:Cross-sectional descriptive analysis of all clinical trials supporting 2014 Food and Drugs Administration (FDA)-approved new drug applications (NDAs) for novel drugs sponsored by large companies. DATA SOURCES:Data from over 45 sources, including Drugs@FDA.gov, ClinicalTrials.gov, corporate and international registries; PubMed, Google Scholar, EMBASE, corporate press releases, Securities and Exchange Commission (SEC) filings and personal communications with drug manufacturers. OUTCOME MEASURES:Trial registration, results reporting, clinical study report (CSR) synopsis sharing, biomedical journal publication, and FDA Amendments Acts (FDAAA) compliance, analysed on the drug level. RESULTS:The FDA approved 19 novel new drugs, sponsored by 11 large companies, involving 553 trials, in 2014. We analysed 505 relevant trials. Per drug, a median of 100% (IQR 86%-100%) of trials in patients were registered, 71% (IQR 57%-100%) reported results or shared a CSR synopsis, 80% (70%-100%) were published and 96% (80%-100%) were publicly available in some form by 13 months after FDA approval. Disclosure rates were lower at FDA approval (65%) and improved significantly by 6 months post FDA approval. Per drug, a median of 100% (IQR 75%-100%) of FDAAA-applicable trials were compliant. Half of reviewed drugs had publicly disclosed results for all trials in patients in our sample. One trial was uniquely registered in a corporate registry, and not ClinicalTrials.gov; 0 trials were uniquely registered in international registries. CONCLUSIONS:Among large pharmaceutical companies and new drugs, clinical trial transparency is high based on several standards, although opportunities for improvement remain. Transparency is markedly higher for trials in patients than among all trials supporting drug approval, including trials in healthy volunteers. Ongoing efforts to publicly track companies' transparency records and recognise exemplary companies may encourage further progress.

Project description:BackgroundMany patients' and consumers' organizations accept drug industry funding to support their activities. As drug companies and patient groups move closer, disclosure become essential for transparency, and the internet could be a useful means of making sponsorship information accessible to the public. This survey aims to assess the transparency of a large group of Italian patient and consumer groups and a group of pharmaceutical companies, focusing on their websites.Methodology/principal findingsPatient and consumer groups were selected from those stated to be sponsored by a group of pharmaceutical companies on their websites. The websites were examined using two forms with principal (name of drug companies providing funds, amount of funding) and secondary indicators of transparency (section where sponsors are disclosed, update of sponsorship). Principal indicators were applied independently by two reviewers to the patient and consumer groups' websites. Discordances were solved by discussion. One hundred fifty-seven Italian patient and consumer groups and 17 drug companies were considered. Thirteen drug companies (76%) named at least one group funded, on their Italian websites. Of these, four (31%) indicated the activities sponsored and two (15%) the amount of funding. Of the 157 patient and consumer groups, 46 (29%) named at least one pharmaceutical company as providing funds. Three (6%) reported the amount of funding, 25 (54%) the activities funded, none the proportion of income derived from drug companies. Among the groups naming pharmaceutical company sponsors, 15 (33%) declared them in a dedicated section, five (11%) on the home page, the others in the financial report or other sections.Conclusions/significanceDisclosure of funds is scarce on Italian patient and consumer groups' websites. The levels of transparency need to be improved. Disclosure of patient and consumer groups provided with funds is frequent on Italian pharmaceutical companies' websites, but information are often not complete.

Project description:BackgroundOncologists who author clinical practice guidelines frequently have financial relationships with the pharmaceutical industry. It is unknown whether participation on clinical practice guideline committees is associated with differences in the amounts of industry money received.Materials and methodsWe conducted a nested case-control study from August 2013 to December 2018. We manually abstracted membership records of National Comprehensive Cancer Network (NCCN) Guidelines committees for the 20 most common cancers and linked to Open Payments. The study sample included medical oncologists selected to join an NCCN Guidelines committee ("joiners") during the study period. Joiners were matched 1:2 to medical oncologists who had no participation on NCCN committees (controls) by gender, NCCN institution, and medical school graduation year. We performed difference-in-differences (DiD) estimation to assess whether selection to an NCCN committee was associated with the dollar value of payments received from industry, using generalized estimating equations to address correlation between matched pairs and between repeated observations of the same pair.ResultsDuring the study period, 54 physicians joined an NCCN Guidelines committee. These physicians received more payments than matched controls in the year prior to joining ($11,259 vs. $3,427; p = .02); this difference did not increase in the year after joining (DiD = $731; p = .45).ConclusionMedical oncologists selected to NCCN Guidelines committees had greater financial ties to industry than their peers. The potential influence of industry in oncology clinical practice guidelines may be reduced through the selection of committee members with fewer ties to industry.Implications for practiceOncologists who author clinical practice guidelines frequently have financial conflicts of interest with the pharmaceutical industry. This creates concern about the potential for industry influence on guidelines. However, it is unknown whether oncologists who author guidelines have greater industry relationships than their peers. This study compared medical oncologists who were newly selected to join a National Comprehensive Cancer Network (NCCN) Guidelines panel with medical oncologists at the same institutions and at similar career stages. At the time they joined, oncologists joining NCCN Guidelines panels had received more than three times the dollar value of industry payments than their peers. The potential for industry influence may be reduced by the selection of less-conflicted panel members.

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Profitability of Large Pharmaceutical Companies Compared With Other Large Public Companies.

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Profitability of Large Pharmaceutical Companies Compared With Other Large Public Companies.

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