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Bob Herman Feb 22
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Pharma's $50 billion tax windfall for investors

The pharmaceutical industry is using a large portion of its windfall from Republicans' corporate tax cuts to boost its stock prices. Nine drug companies are spending a combined $50 billion on new share buyback programs, a sum that towers over investments in employees or drug research and development.

The bottom line: All of those buybacks were announced during or after the passage of the Republican tax bill. That money is enriching hedge funds, other Wall Street investors and top drug company executives, but it isn't necessarily helping patients.

Data: Company documents; Chart: Andrew Witherspoon / Axios

That's not all: Some drug companies also increased quarterly dividends following the tax overhaul. For example, AbbVie increased its cash dividend by 35% while at the same time committing to a new $10 billion share repurchase program.

  • Dividends dole out cash to existing investors, and share buybacks boost a company's stock price by making shares scarcer.
  • The new tax law, which slashed the corporate tax rate and made it easier for companies to repatriate overseas cash, has made dividends and share buybacks quick and appealing options.
  • Several drug company buybacks are a lot larger than prior share repurchase programs.
  • Stock returns help people with 401k retirement accounts, but they mostly benefit wealthy investors and executives. And half of U.S. households don't own any stock.

The big picture: The large buyback programs are rolling out while the same pharmaceutical companies raise drug prices and while Americans struggle to afford their prescriptions.

Pharmaceutical Research and Manufacturers of America, the main drug industry trade group, referred share buyback questions to employer groups.

Axios 1 hour ago
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Mike Allen 4 hours ago
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Macron's blunt postgame

Collage: Sarah Grillo/Axios; Photos: Getty Images

French President Emmanuel Macron said at a remarkably candid postgame for a small group of reporters last evening that his State Visit left him convinced President Trump will withdraw from the nuclear deal with Iran, and that the U.S. president wants to create "a series of new Trump's deals."

His big takeaway: "[Y]our president is a dealmaker. You always have to understand the rationale of your counterpoint. He's a dealmaker. So he wants to find a deal and he wants to find a deal under his condition."