Merck CEO Frazier finds fault in new studies suggesting pharma profits are too high

Is the pharma industry hiking up drug prices to boost profitability at the expense of hardworking Americans? That question—a favorite of politicians on both sides of the aisle—is at the heart of a special issue of the Journal of the American Medical Association, which features a collection of articles that aim to provide a well-rounded answer.

Perhaps the most damning of the studies compares the profits of the 35 biggest pharmaceutical companies to the S&P 500 as a whole. The study, led by Bentley University, found that between 2000 and 2018 the median annual gross profit margin of Big Pharma was 76.5%, versus just 37.4% for the S&P 500 companies. Earnings before taxes and net income margins were also significantly higher among pharma companies, the authors reported.