On his blog, Merrill Goozner (author of The $800 Million Pill) writes about drug company profits at 20% of sales.
Excerpt:
"The industry may be dogged by expiring patents, a collapsing new drug pipeline, and a steady drumbeat of bad news on its best-selling drugs like Vytorin, but none of it appears to have affected the bottom line. Only beverage and tobacco companies came close to the drug industry's profit margins. Even with $3-a-gallon gasoline, the oil and gas industry lagged far behind with profits at 8.7 percent of sales.Posted by schwitz at January 23, 2008 08:10 AM | TrackBackPerhaps the pummeling the drug companies are taking on the campaign trail from the leading Democrats signals the salad days are behind the industry. Each of the leading candidates is promising to give Medicare the right to negotiate drug pricing, which, given the larger role the government is playing in overall drug sales because of the senior drug benefit, should put a dent in those profit margins."