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Pharmaceutical companies are in the business
of making money from people's sickness.

 

 

Drug Companies Maintain "Astounding" Profits

4 May 2002 by Scott Gottlieb, New York, BMJ 2002

Pharmaceuticals again ranked as the most profitable sector in the United States, topping the annual Fortune 500 ranking of America's top industries, released this month.

The pharmaceutical industry topped all three of Fortune magazine's measures of profitability for 2001, making this decade the third in which the industry has been at or near the top in all the magazine's measures of profitability.

The occasion was seized by critics of the industry as reflecting corporate greed. Frank Clemente, director of Public Citizen's Congress Watch, said: "During a year in which there was much talk of sacrifice in the national interest, drug companies increased their astounding profits by hiking prescription prices, advertising some medicines more than Nike shoes, and successfully lobbying for lucrative monopoly patent extensions. Sometimes what's best for shareholders and chief executive officers isn't what's best for all Americans, particularly senior citizens who lack insurance cover for prescription drugs."

Overall profits of Fortune 500 companies declined by 53% in 2001, while the top 10 US drug makers increased profits by 32% from $28bn (20bn; 31bn) to $37bn, according to Public Citizen's analysis of the Fortune 500 data. Together the 10 drug companies in the list had the greatest return on revenues, reporting a profit of 18.5 cents for every dollar of sales, eight times higher than the median for all Fortune 500 industries, which was 2.2 cents.

The drugs industry says it needs extraordinary profits to fund risky resea