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by nrao123 3903 days ago
Yes- agree with you. Most discussions around healthcare/pharma/hospitals have a moral element(look they are price gouging us). There are possibly some cases that fit the description but I am not sure if it applies across the industry.

If in fact, pharma companies where making super normal profits- it would show up in their financial statements. Operating profits for any given year may not be appropriate because a lot of the R&D costs are in the balance sheet.

A more appropriate (but still not perfect) metric would be Return on Assets (Profits/Assets) i.e. how much return are you getting on the capital you put in. Here are some metrics for some pharma companies. None of them are making super normal profits.

9.68% - Merck- https://ycharts.com/companies/MRK/return_on_assets

5.38%- Bristol Myers- https://ycharts.com/companies/BMY/return_on_assets

5.77%: Eli Lilly: https://ycharts.com/companies/LLY/return_on_assets

5.33% - Pfizer: https://ycharts.com/companies/PFE/return_on_assets