Graph of the day: The benefits of health care is increasingly supporting shareholders’ payments

Figure 1. Payments increased health care companies that were in the 500 Standard & Poor’s health care index for at least a quarter, 2001-2022. Payments are indicated as a total amounts and as dividends of shareholders or share buybacks in US billions of dollars.

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Payments to shareholders of large health care companies listed on the stock market have totaled 2.6 billions of dollars from 2001 to 2022, LDI Senior Fellow Victor Roy and colleagues report. During this period, the number of companies in the study sample during a given year doubled, from 30 to around 60, but payments increased by more than 300%, from $ 54 billion in 2001 to more than $ 170 billion in 2022 (Figure 1).

“Only 19 companies – 20% of our sample – were responsible for 80% of this activity,” said Roy. These companies were mainly pharmaceutical and biotechnological companies and large managed care companies. The managed care conglomerates sell insurance, their own groups of doctors and pharmacies and determine prescription medication costs thanks to their Pharmacy services managerswhich negotiate the prices of medication with pharmaceutical companies.

For companies in the study sample, 95% of net profit went to payments. Sixty percent of the payments were stock buyoutsin which companies buy their own stock to increase its value. Redemptions can particularly The leaders of the company benefiting which receive options for purchasing shares in compensation.

Roy and his colleagues have studied 92 companies in the Standard & Poor’s 500 health care index for at least a quarter from 2001 to 2022. The index contains the largest companies, measured by the value of the shares. The data comes from financial information and historic market providers. This descriptive study does not include non -profit health systems or companies belonging to investment capital companies.

Continue a greater investment in health care

The study was partly motivated by the book of Roy, Capitalize a remedy: How finance controls the price and value of drugs,, This has shown how the benefits of the Pharmaceutical Society Gilead from a drug against hepatitis C mainly went to shareholders rather than in future research and development. Significant shareholders’ versions can stimulate private capital investments in health care. However, Some support That practices and buyouts promote short -term stock negotiations rather than long -term investments.

Roy and his colleagues also wrote an in -depth comment On the growing influence of the financial sector on health care, the complement Other research on the benefits of health care. “Given the extent to which people live financial charges For an essential need such as health care, “said Roy,” these payments deserve a much greater examination. “”

As for the means of encouraging investment benefits in the provision of health care and innovation, the Roy’s study mentions the American government conditions in the Bipartisan Chips and Science Act This encourages reinvestment rather than buyouts. “Patients want the health care system to work for them,” said Roy, “and political decision -makers must take more daring measures to respond to these increasing concerns.”

The study, “Shareholders among major health care companies listed on the stock market»Was published on February 10, 2025, in Jama internal medicine. The authors include Victor RoyVictor Amana, Joseph S. Ross and Cary P. Gross.