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Illustration: Sarah Grillo/Axios

The health care industry continued to rake in record-level profits in the second quarter, with its year-over-year earnings increasing by 23%, according to an Axios analysis of 160 companies.

The bottom line: Pharmaceutical firms and hospitals, in particular, are reaping some of the largest rewards even amid the sustained public furor over drug prices and surprise medical bills.

Where it stands: We updated our health care earnings tracker to include 48 not-for-profit hospital systems, many of which also own health insurance companies, and we will add more as more financial documents are released.

By the numbers: Big Pharma remains the cash king.

  • Drug companies collected almost half of all health care profits despite generating less than 20% of industry revenue.
  • 12 of the 16 most profitable companies in Q2 were pharmaceutical firms.
  • This theme should sound familiar.

The intrigue: Hospitals don't retain as much money as drug companies, but their prices and Wall Street investments are still leading to sizable windfalls.

  • The combined net profit margin for this sample of hospital systems was 8.6%. That's lower than the extremely profitable first quarter hospitals had, but above average for the entire group.
  • 17 of the 55 companies in the analysis that had net margins of at least 10% in Q2 were not-for-profit hospital systems.

The big picture: The profits don't just lead to hefty paydays. They allow the industry to amass a war chest to fend off piecemeal reforms and larger-scale overhauls like Medicare for All.

Go deeper

3 hours ago - Politics & Policy

Rahm Emanuel floated for Transportation secretary

Rahm Emanuel. Photo: Joshua Lott for The Washington Post via Getty Images

President-elect Biden is strongly considering Rahm Emanuel to run the Department of Transportation, weighing the former Chicago mayor’s experience on infrastructure spending against concerns from progressives over his policing record.

Why it matters: The DOT could effectively become the new Commerce Department, as infrastructure spending, smart cities construction and the rollout of drone-delivery programs take on increasing economic weight.

3 hours ago - Politics & Policy

Biden turns to experienced hands for White House economic team

Illustration: Sarah Grillo/Axios

Joe Biden plans to announce Cecilia Rouse and Brian Deese as part of his economic team and Neera Tanden to head the Office of Management and Budget, sources tell Axios.

Why it matters: These are experienced hands. Unveiling a diverse group of advisers also may draw attention away from a selection of Deese to run the National Economic Council. Some progressives have criticized his work at BlackRock, the world's largest asset management firm.

Biden taps former Obama communications director for press secretary

Photo: Mark Makela/Getty Images

Jen Psaki, who previously served as Obama's communications director, will serve as President-elect Joe Biden's press secretary, the transition team announced Sunday.

The big picture: All of the top aides in Biden's communication staff will be women, per the Washington Post, which first reported Psaki's appointment.