Drug Industry: Profits, Research and Development Spending, and Merger and Acquisition Deals
Abstract
Retail prescription drug expenditures were estimated to account for about 12 percent of total personal health care service spending in the United States in 2015, up from about 7 percent through the 1990s. Much of this growth was driven by use of expensive brand-name drugs, but price increases have been reported for some generic drugs as well. Prior GAO reports have identified multiple reasons for drug price increases, including limited competition. Experts have questioned whether consolidation among drug companies could reduce competition and R and D investment in new drugs. GAO was asked to examine changes in the drug industry. This report describes: (1) how the financial performance and structure of the industry have changed over time, (2) how reported R and D spending and new drug approvals have changed, and (3) what is known about the potential effects of consolidation on drug prices and new drug development. GAO analyzed Bloomberg drug industry financial data for 2006 through 2015, and examined select publicly available estimates of company market shares for 2014 and market shares for certain therapeutic classes for 2016. GAO also analyzed estimates of company self-reported R and D spending and federal funding for biomedical R and D data, aggregate tax credit claims data, and drug approval data for the same approximate time period. All data were the most current available. In addition, GAO also reviewed published research and interviewed federal agency officials, economists, and representatives from industry and advocacy groups.
Document Details
- Document Type
- Technical Report
- Publication Date
- Nov 17, 2017
- Accession Number
- AD1174880
Entities
People
- Brandon Nakawaki
- Edward Nannenhorn
- George Bogart
- Giselle Hicks
- John E. Dicken
- Laurie Pachter
- Matthew Rabe
- Muriel Brown
- Oliver Richard
- Rebecca Abela
- Reed Meyer
- Robert Copeland
- Sandra George
- Sarah Gilliland
- Yesook Merrill
Organizations
- United States Government Accountability Office