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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

2 hours ago - Politics & Policy

Bipartisan group of senators seeks coronavirus stimulus deal

Sens. Joe Manchin (D-W.V.) and Susan Collins (R-Maine). Photo: Drew Angerer/Getty Images

At least eight Republican and Democratic senators have formed an informal working group aimed at securing new coronavirus spending during the lame-duck session, a move favored by President-elect Biden, two sources familiar with the group tell Axios.

Why it matters: It may be the most significant bipartisan step toward COVID relief in months.

FCC chairman to depart in January

FCC Chairman Ajit Pai. Photo: Alex Wong/Getty Images

Ajit Pai will leave his post as chairman of the Federal Communications Commission on Jan. 20, the agency said today.

Why it matters: Pai's Inauguration Day departure is in keeping with agency tradition, and could set up the Biden administration with a 2-1 Democratic majority at the FCC if the Senate fails to confirm another Trump nominee during the lame-duck period.

Ben Geman, author of Generate
3 hours ago - Economy & Business

GM's shrinking deal with Nikola

Illustration: Rebecca Zisser/Axios

General Motors will no longer take an equity stake in Nikola Corp. or build its pickup truck, under a revised deal that still envisions GM as a key tech supplier for Nikola's planned line of electric and fuel cell heavy trucks.

Driving the news: The revised agreement Monday is smaller in scope than a draft partnership rolled out in September that had included a $2 billion stake in the startup and an agreement to build its Badger pickup.