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Topic	Politics Containment Topic 234: Epsteins;Gate
pyresword 08/12/19 5:41:17 PM #257:	red13n posted... pyresword posted... Do medical corporations make obscene amounts of money? It's not clear to me right now how much the of high drug costs goes towards profit and how much goes towards offsetting high development costs. https://www.google.com/search?source=hp&ei=BdtRXeyKHo7z0wL1yLfABw&q=pharmaceutical+profits&oq=pharmaceutical+profits pick an article. Well, from the first article that came up from forbes, it seems to indicate that they DON'T make particularly large profits. (https://www.forbes.com/sites/johnlamattina/2018/01/23/about-those-soaring-pharma-profits/#342e2ef3f9db) [This quote is from a Pharma CEO take with a grain of salt] Is this industry obscenely profitable? There is no evidence of that. If you look at our return on investment, our return on capital, if you look at our P/E, if you look at anything inside this industry looking at the Bloomberg indices we are in the middle. Thats a pretty good speech, but in an era of fake news, how accurate are Reads comments? Actually, available data* are pretty supportive. The average return on equity for key industries from 2014 2016 shows that biopharmas profits stand at 16.2%, significantly lower than Computer Sciences (31.6%), Beverages (27.4%), Aerospace/Defense (23.0%), and Trucking (19.1%) while modestly higher than Software System/Applications (15.2%) and Healthcare Support Services (14.4%). Another measure, Internal Rate of Return (IRR) is even more telling. IRR calculates the sales/cash flows resulting from R&D investments, ties R&D and the returns it generates together, and is a more appropriate metric for biopharma productivity. Deloitte reports that the IRR for biopharma R&D has been steadily falling from 10.1% in 2010 to 3.2% in 2017. Even Wall Street hasnt bought into the pharma soaring profits view. Since February 1, 2014, while the Dow has risen 63%, the stock prices of a number of major pharma companies have been muted with Pfizer and Bristol-Myers each growing by about 15%, and Merck and AstraZeneca by roughly 6.5%. Even Lillys growth of 43% still lags the Dow. --- Oh woops. Putting Advokaiser in my sig like this until I think of something more clever <cite>pyresword posted [p:925979796] in Politics C... [t:77929321]...</cite> <quote>red13n posted...</cite> <quote>pyresword posted...</cite> <quote>Do medical corporations make obscene amounts of money? It's not clear to me right now how much the of high drug costs goes towards profit and how much goes towards offsetting high development costs.</quote> https://www.google.com/search?source=hp&ei=BdtRXeyKHo7z0wL1yLfABw&q=pharmaceutical+profits&oq=pharmaceutical+profits pick an article.</quote> Well, from the first article that came up from forbes, it seems to indicate that they DON'T make particularly large profits. (https://www.forbes.com/sites/johnlamattina/2018/01/23/about-those-soaring-pharma-profits/#342e2ef3f9db) <quote> [This quote is from a Pharma CEO take with a grain of salt] Is this industry obscenely profitable? There is no evidence of that. If you look at our return on investment, our return on capital, if you look at our P/E, if you look at anything inside this industry looking at the Bloomberg indices we are in the middle.</quote> <quote>Thats a pretty good speech, but in an era of fake news, how accurate are Reads comments? Actually, available data* are pretty supportive. The average return on equity for key industries from 2014 2016 shows that biopharmas profits stand at 16.2%, significantly lower than Computer Sciences (31.6%), Beverages (27.4%), Aerospace/Defense (23.0%), and Trucking (19.1%) while modestly higher than Software System/Applications (15.2%) and Healthcare Support Services (14.4%). Another measure, Internal Rate of Return (IRR) is even more telling. IRR calculates the sales/cash flows resulting from R&D investments, ties R&D and the returns it generates together, and is a more appropriate metric for biopharma productivity. Deloitte reports that the IRR for biopharma R&D has been steadily falling from 10.1% in 2010 to 3.2% in 2017. Even Wall Street hasnt bought into the pharma soaring profits view. Since February 1, 2014, while the Dow has risen 63%, the stock prices of a number of major pharma companies have been muted with Pfizer and Bristol-Myers each growing by about 15%, and Merck and AstraZeneca by roughly 6.5%. Even Lillys growth of 43% still lags the Dow.</quote> --- Oh woops. Putting Advokaiser in my sig like this until I think of something more clever</quote> ... Copied to Clipboard!
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