Offensive Medicine is Profitable
I recently wrote about the possibility that the pharmaceutical industry has been paying doctors to expand disease guidelines in order increase the number of people who "need" prescription medication. I was reminded of that post when I read this article that appeared in December in the San Jose Mercury News:
"Drug companies continue to spend more than $150 million a year on their lobbying efforts. Just how brazen are they? They didn't hesitate at all to make Billy Tauzin, the former Republican House representative from Louisiana who negotiated the $500 billion bill to expand Medicare drug coverage, one of the industry's chief lobbyists...
But the pharmaceutical industry remains near the top of Fortune 500 magazine's ranking of the most profitable industries in the United States, realizing a 15.7 percent profit as a percentage of its revenues. That's significantly higher than the electronics, entertainment, insurance and home builders industries.
At the same time, the prescription drug costs to American consumers are out of control. Americans spent more than $240 billion on prescription drugs in 2005."
For the record, that $240 billion is a little low. A later article put the figure at $279 billion and noted pharmaceutical sales were up 7% globally.
If that 15.7% figure is accurate, that means pharmaceutical companies earned around $40 billion in profit last year. I guess that means they actually can afford to fairly compensate the victims of defective drugs.