Amid the firestorm of blame about drug prices, a new report has just made one thing clear: pharmaceutical companies are dependent on them for growth.
Increases in the prices of drugs added $8.7 billion to 2016 net income for 28 companies analyzed, accounting for 100 percent of earnings growth last year, according to a report published this week by Credit Suisse, which called pricing "the most important issue for a pharma investor today."
The increases came despite heightened public scrutiny for the drug industry throughout the U.S.presidential election.
The companies most dependent on price increases for growth, per the Credit Suisse report: Biogen (NASDAQ: BIIB), Eli Lilly (NYSE: LLY) and AbbVie (NYSE: ABBV), for which U.S. net price growth accounted for more than 100 percent of total net income growth last year. That means without price increases, earnings would have declined.
Those least reliant on price increases, the report showed, were BioMarin (NASDAQ: BMRN), Gilead (NASDAQ: GILD), Novo Nordisk and Regeneron.
And amid continued pressure—President Donald Trump said in January that the pharmaceutical industry was "getting away with murder" in its pricing practices—the increases continued in the first quarter of this year, a separate report from Cowen shows. There were 40 increases on drug prices in the first quarter of 2017, up from 33 in 2016.
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