A study by the Institute for New Economic Thinking concludes that big pharmaceutical companies have spent more on share buybacks and dividends in a recent 10-year period than they did on research and development. From 2006 through 2015, the 18 drug companies in the Standard & Poor’s 500 index spent a combined $516 billion on buybacks and dividends. This exceeded by 11 percent the companies’ research and development spending of $465 billion during these years.
Who benefits the most from these buybacks? The drug company executives, whose pay packages, based in part on stock prices, are among the lushest in corporate America.