Profitability of Large Pharmaceutical Companies Compared With Other Large Public Companies

Ledley, Fred D.; McCoy, Sarah Shonka; Vaughan, Gregory; Cleary, Ekaterina Galkina

doi:10.1097/01.ogx.0000695056.94192.53

Cited by 4 publications

(6 citation statements)

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“…One final consideration regarding whether a drug's price is reasonable is fairness. Pharmaceutical companies are disproportionately profitable compared with non‐Pharma Fortune 500 companies 26 . It is possible that a curative therapy for a devastating infantile disease may have an exorbitant price that is “valuable” based on impact on QALYs, yet the price would not be fair when viewed through the lens of reasonable profits relative to research and discovery investment.…”

Section: The Concept Of “Externality”mentioning

confidence: 99%

A crisis in US drug pricing: Consequences for patients with neuromuscular diseases, physicians, and society, part 2

2020

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Escalating drug costs place patients at risk for financial toxicity and demand that physicians understand and act on the ethical and economic principles related to drug pricing. This manuscript reviews these principles and provides clinicians with a framework to think about the value of the drugs prescribed for patients with neuromuscular diseases. A key component of addressing the drug pricing crisis will be establishing a value based (benefit/cost) drug pricing framework. Determining the value of a drug is difficult and requires estimating the benefit and costs to patients and society while integrating indirect and contextual variables. Other considerations in drug pricing include "externality," the value to society derived from innovation. The Institute for Clinical and Economic Review (ICER) is a leading independent research organization providing clinicians with value-based price "benchmarks." All physicians must educate themselves in drug pricing principles and be prepared to have conversations regarding individual and societal value with the patients they serve.

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Section: The Concept Of “Externality”mentioning

confidence: 99%

A crisis in US drug pricing: Consequences for patients with neuromuscular diseases, physicians, and society, part 2

2020

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“…A key consideration here is the profitability of healthcare corporations, especially pharmaceutical companies, whose earnings exceed those of even the most successful large companies in other industries 9 . Hence, with regard to access to resources and capacity, the magnitude of influence from self‐interested individuals is infinitesimal compared with the potential for influence from self‐interested healthcare corporations 10 .…”

Section: What Is Conflict Of Interest?mentioning

confidence: 99%

Disclosing conflict of interest does not mitigate healthcare bias and harm: It is time to sever industry ties

James

2020

Eur J Clin Investigation

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Concerns have long been expressed about industry entanglement in health care. 1,2 Early editorial commentary to raise awareness 1 was soon followed by editorial policy requiring authors to disclose financial ties to industry. 3 Disclosure provisions later earned international imprimatur by being added to the World Medical Association's Declaration of Helsinki. 2 The aim of the present commentary was to examine the effectiveness of disclosure for mitigating bias and harm from industry entanglement in healthcare research, education and practice. How to cite this article: James JE. Disclosing conflict of interest does not mitigate healthcare bias and harm: It is time to sever industry ties.

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“…Nonetheless, given the increase in expensive new pharmaceuticals and reports on the relatively high levels of profitability among pharmaceutical companies, 7,8 prices and profit margins are receiving attention. The increased reliance on price negotiations in several jurisdictions, presumably aimed at reducing profit margins and changing the division of surplus, is also relevant to mention here.…”

Section: Introductionmentioning

confidence: 99%

Do Profit Margins of Pharmaceuticals Influence Reimbursement Decisions? A Discrete Choice Experiment Among Dutch Healthcare Decision Makers

et al. 2022

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This study aimed to investigate whether the profit margins of pharmaceuticals would influence the outcome of reimbursement decisions within the Dutch policy context. Methods:We conducted a discrete choice experiment among 58 Dutch decision makers. In 20 choice sets, we asked respondents to indicate which of 2 pharmaceutical treatment options they would select for reimbursement. Options were described using 5 attributes (disease severity, incremental costs per quality-adjusted life-year, health gain, budget impact, and profit margin) with 3 levels each. Additionally, cognitive debriefing questions were presented, and for validation debriefing, interviews were conducted. Choice data were analyzed using mixed logit models, also to calculate marginal effects and choice probabilities.Results: Results indicated that the specified levels of profit margins significantly influenced choices made. Decision makers were less likely to reimburse a product with a higher profit margin. The relative importance of profit margins was lower than that of the included traditional health technology assessment criteria, but not negligible. When asked directly, 61% of respondents indicated that profit margin should play a role in reimbursement decision making, although concerns about feasibility and the connection to price negotiations were voiced. Conclusions:Our results suggest that if available to decision makers the profit margin of pharmaceutical products would influence reimbursement decisions within the Dutch policy context. Higher profit margins would reduce the likelihood of reimbursement. Whether adding profit margin as an additional, explicit criterion to the health technology assessment decision framework would be feasible and desirable is open to further exploration.

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Profitability of Large Pharmaceutical Companies Compared With Other Large Public Companies

Cited by 4 publications

References 0 publications

A crisis in US drug pricing: Consequences for patients with neuromuscular diseases, physicians, and society, part 2

A crisis in US drug pricing: Consequences for patients with neuromuscular diseases, physicians, and society, part 2

Disclosing conflict of interest does not mitigate healthcare bias and harm: It is time to sever industry ties

Do Profit Margins of Pharmaceuticals Influence Reimbursement Decisions? A Discrete Choice Experiment Among Dutch Healthcare Decision Makers

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