Eleven Drug Makers Whose Pricing Power Is Off the Charts

Gilead leads the pack

Mylan has been under fire recently for hefty price hikes on its EpiPen––an epinephrine autoinjector––for the treatment of allergies. But it’s not the drug company with the most formidable pricing power, according to an article in USA Today.

An analysis of data from Standard & Poor’s Global Market Intelligence has found that Gilead Sciences and Amgen, along with nine other pharma heavy hitters, have massive pricing power on their products relative to costs. Each of these companies’ operating profit margins reached 25% or more during the past 12 months, excluding interest and taxes. That means the companies kept 25 cents of every dollar in revenue after paying operating costs––far exceeding the 15.8% profit margin of companies in the Standard & Poor’s 500 index and the 20% profit margin enjoyed by Mylan, according to USA Today reporter Matt Krantz.

Gilead leads the pack. The biotech sells a variety of drugs, including treatments for human immunodeficiency virus (HIV) inflections, hepatitis C, and liver disease. During the past 12 months, the company has kept 63 cents of every dollar of revenue before interest and taxes.

Like Mylan, Gilead is no stranger to controversy when it comes to pricing its products. In 2014, Democratic lawmakers questioned the company about the $84,000 price tag for sofosbuvir (Sovaldi), a hepatitis C treatment.

According to the article, the pharma and biotech companies with the highest profit margins include:

  • Gilead Sciences (63%)
  • Biogen (49%)
  • Amgen (42%)
  • AbbVie (39%)
  • Celgene (32%)
  • Pfizer (28%)
  • Zoetis (28%)
  • Bristol-Myers Squibb (27%)
  • Johnson & Johnson (27%)
  • Regeneron (27%)
  • Alexion (25%)

Source: USA Today; August 25, 2016.