[refurb]

pharma is extremely profitable

That's survivorship bias. Yes, the successful pharma companies are quite profitable, but there are 10 failed companies for every successful one.

I remember reading a paper that said the overall returns for the industry are either single digit or negative.

[tertius]

This is business in general.

The big ones buy up the small generic producers and single new drug companies and get slightly bigger.

The ones who can't pass trials fail. That's business, especially in R&D.