A Congressional committee released a report on Thursday showing the 14 largest drug makers spent more on stock buybacks than research and development during the last five years, the latest sign that the cost of prescription medicines remains a political hot potato in Washington.
Specifically, the companies spent $577 billion on stock buybacks and dividends from 2016 through 2020, which was $56 billion more than was spent on R&D over the same period. Of the drug makers that were examined, only AstraZeneca (AZN) and Roche (RHHBY) spent more on R&D during that time, according to the report.
Assuming the same rate of spending going forward, the drug makers are projected to spend $1.15 trillion on buybacks and dividends from 2020 through 2029. This would exceed by more than twice the amount that the Congressional Budget Office projected would be saved over the same period by a House bill – called H.R. 3 – that would allow Medicare to negotiate prices for certain drugs.
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