Thursday, 6 November 2014
Pharmaceutical industry gets high on fat profits !
Imagine an industry that generates higher profit margins than any other and is no stranger to multi-billion dollar fines for malpractice.
Throw in widespread accusations of collusion and over-charging, and banking no doubt springs to mind.
In fact, the industry described above is responsible for the development of medicines to save lives and alleviate suffering, not the generation of profit for its own sake.
Pharmaceutical companies have developed the vast majority of medicines known to humankind, but they have profited handsomely from doing so, and not always by legitimate means.
Last year, US giant Pfizer, the world's largest drug company by pharmaceutical revenue, made an eye-watering 42% profit margin. As one industry veteran understandably says: "I wouldn't be able to justify [those kinds of margins]."
Stripping out the one-off $10bn (£6.2bn) the company made from spinning off its animal health business leaves a margin of 24%, still pretty spectacular by any standard.
In the UK, for example, there was widespread anger when the industry regulator predicted energy companies' profit margins would grow from 4% to 8% this year.
Last year, five pharmaceutical companies made a profit margin of 20% or more - Pfizer, Hoffman-La Roche, AbbVie, GlaxoSmithKline (GSK) and Eli Lilly.
More on this story here.