House report: Drug companies spent more on buybacks, dividends than research

House Democrats on Thursday released a report that found that the 14 leading drug companies paid out more in stock buybacks and dividends from 2016 to 2020 than they spent on research and development.

The report from the House Oversight and Reform Committee finds that the 14 companies spent $577 billion from 2016 to 2020 on stock buybacks and dividends, $56 billion more than the $521 billion they spent on research and development over the same time period.

Broader purpose: The release of the report comes as House Democrats try to make the case for their sweeping bill aimed at lowering drug prices, known as H.R. 3, which would allow the secretary of Health and Human Services to negotiate lower prices.

Democrats sought to push back on the pharmaceutical industry’s argument that the bill would harm innovation, saying that drug companies could simply cut back on payouts to shareholders, rather than cutting research and development.

“Even if the pharmaceutical industry collected less revenue due to reforms such as H.R. 3, drug companies could maintain or even exceed their current levels of R&D if they spent less on rewarding shareholders and executives,” said House Oversight Committee Chairwoman Carolyn Maloney (D-N.Y.).