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Expand chart
Source: Axios analysis of company financial documents; Chart: Chris Canipe/Axios

Ten companies controlled half of the health care industry's $50 billion of global profit in the third quarter of this year, according to an analysis of financial documents for 112 publicly traded health care corporations. Nine of those 10 companies at the top are pharmaceutical firms.

The bottom line: Americans spend a lot more money on hospital and physician care than prescription drugs, but pharmaceutical companies pocket a lot more than other parts of the industry.

By the numbers: The health care industry's $50 billion of profit came from $636 billion of revenue, equating to a cumulative profit margin of almost 8%. Those are the highest figures of the past four quarters.

  • Approximately 63% of the profit total went to drug companies, even though they collected 23% of the revenue — numbers that mirror our past analyses.
  • Pfizer had the highest profit total ($4.1 billion) of any publicly traded health care company in the third quarter. Pfizer also said it will go back to its "normal" routine of raising drug prices after a public skirmish with President Trump.
  • Of the 19 companies that tallied at least $1 billion of third-quarter profit, 14 were drug companies. The others were either health insurers (UnitedHealth Group and Aetna) or involved in the drug supply chain (Walgreens, CVS Health, Express Scripts).
  • The analysis does not include not-for-profit hospital systems, but early returns still show the biggest systems have a lot of money.

Between the lines: The Republican tax law, which slashed the corporate tax rate, also continues to bolster the industry.

  • Drug firm AbbVie paid $14 million of income taxes on $2.76 billion of pre-tax earnings in the third quarter — an effective tax rate of just 0.5%. Pfizer's effective tax rate in Q3 was 1.6%.

The big picture: The health care industry arguably has more financial power now than at any point in its history, and a split Congress likely won't change that in the short term — even though patients are fed up with the system.

Go deeper

Harry and Meghan accuse British royal family of racism

Photo: Joe Pugliese/Harpo Productions via Reuters

Prince Harry and Meghan Markle delivered a devastating indictment of the U.K. royal family in their conservation with Oprah Winfrey: Both said unnamed relatives had expressed concern about what the skin tone of their baby would be. And they accused "the firm" of character assassination and "perpetuating falsehoods."

Why it matters: An institution that thrives on myth now faces harsh reality. The explosive two-hour interview gave an unprecedented, unsparing window into the monarchy: Harry said his father and brother "are trapped," and Markle revealed that the the misery of being a working royal drove her to thoughts of suicide.

Updated 4 hours ago - Axios Twin Cities

In photos: Thousands rally for George Floyd ahead of Derek Chauvin's trial

Demonstrators on March 7 outside the Hennepin County Government Center, where the trial of former Minneapolis police officer Derek Chauvin, charged with murdering George Floyd, will begin in Minneapolis, Minnesota. Photo: Chandan Khanna/AFP via Getty Images

Thousands of protesters marched through Minneapolis' streets Sunday, urging justice for George Floyd on the eve of the start of former police officer Derek Chauvin's trial over the 46-year-old's death, per AFP.

The big picture: Chauvin faces charges for second-degree murder and manslaughter over Floyd's death last May, which ignited massive nationwide and global protests against racism and for police reform. His trial is due to start Monday, with jury selection procedures.

Caitlin Owens, author of Vitals
7 hours ago - Health

Pfizer CEO feels "liberated" after taking COVID vaccine

Pfizer CEO Albert Bourla. Photo: "Axios on HBO"

Pfizer CEO Albert Bourla tells "Axios on HBO" that he recently received his first of two doses of the company's coronavirus vaccine.

Why it matters: Bourla told CNBC in December that company polling found that one of the most effective ways to increase confidence in the vaccine was to have the CEO take it.