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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.

Expand chart
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.

Go deeper

GOP Rep. Andrew Clyde defends comparison of Jan. 6 riot to "tourists"

Rep. Andrew Clyde (R-Ga.) departs a press conference on June 14. Photo: Win McNamee/Getty Images

Rep. Andrew Clyde (R-Ga.) defended comments made during a House committee hearing in which he compared the deadly Jan. 6 Capitol riot to a "normal visit."

The big picture: In a heated back-and-forth during a Rules Committee meeting on Tuesday, Rep. Jamie Raskin (D-Md.), who sits on the select committee investigating the attack, pressed Clyde on whether he had watched the officers' testimony earlier in the day.

39 mins ago - Health

England lifts quarantine requirement for vaccinated EU, U.S. citizens

U.K. Prime Minister Boris Johnson and President Biden at the G7 in Cornwall last month. Photo: Leon Neal - WPA Pool/Getty Images

Fully vaccinated travelers from the European Union and the U.S. will no longer need to quarantine when arriving in England, effective Aug. 2 at 4 a.m. local time, the U.K. government announced Wednesday.

Why it matters: It's a reflection of the British government's confidence in its highly successful COVID-19 vaccine rollout, despite the spread of the Delta variant. The move stands in stark contrast to the Biden administration's continued refusal to lift restrictions for travelers from the U.K. and Europe.

2 hours ago - Sports

Simone Biles is still a winner

Photo: Laurence Griffiths/Getty Images

Simone Biles' leadership on the mat has never been questioned. After her shocking withdrawal from Tuesday's team final, she proved just as capable a leader off of it.

What happened: During the first rotation, Biles performed an uncharacteristically bad vault, appearing to lose herself in midair.

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