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Axios analysis of company financial documents; Chart: Andrew Witherspoon/Axios

The health care industry recorded an immensely profitable first quarter, according to an analysis of financial documents for 108 companies. Year-over-year earnings among the 10 biggest health care corporations by net profit soared by 8.4%.

Yes, but: Wall Street wants more. The S&P 500 health care index so far this year is trailing the broader S&P 500 as well as other industries, including energy and technology.

The bottom line: The 108 companies cumulatively boosted Q1 global revenues by 6.3% to $558 billion — an amount from just one quarter that is about the size of Sweden's economy. Their collective profits actually decreased 0.8% to $44.7 billion, but if a few one-off elements from 2017 were eliminated, profits would have increased.

  • More than half of the industry's earnings came from 10 companies.
  • All 10 of those companies that reaped the largest earnings are either pharmaceutical firms or are involved with the drug supply chain.
  • No health care company collected more Q1 earnings than Johnson & Johnson, the maker of drugs, medical devices and Band-Aids.
  • Drug maker Amgen's 41.6% profit margin was the highest among all companies in Q1.
  • Of the 10 companies with the highest profit margins, eight were pharmaceutical firms. The other two were a real estate investment trust (Welltower) and a medical device company (Intuitive Surgical).
  • The Republican tax overhaul contributed to increased earnings, as savings from a lower corporate tax rate immediately fall to the bottom line — especially for companies like health insurers that have almost all of their business in the U.S.
  • The analysis did not include not-for-profit hospital systems, but most of those organizations have been doing well, too.

The big picture: Higher profits and revenues naturally mean U.S. health care spending is increasing. That inevitably affects other portions of the economy — like how people may not be getting significant salary raises since their employers are covering the rising costs of health care.

Go deeper: The health care industry's bubble.

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