QUICK READ: The compensation for pharma CEOs is starting to be reported and it’s off the charts. Bob Bradway of Amgen bagged a $20.1 million compensation package in 2020, a slight increase from his $19.6 million total the previous year. Pfizer CEO Bourla’s Pay Climbed 17% to $21 Million in 2020 and Gilead Sciences CEO Daniel O’Day earned a $19 million take home. This has to end.
American healthcare is in trouble. Rising costs are unsustainable despite the talk about virtual visits. Pharma, PBM, and health insurance CEOs earn hundreds of millions of dollars to do one thing; make their companies a lot of money. I have to laugh when I hear that a pharma company is patient-centric because that’s become a slogan to make employees feel good about themselves while the costs of prescription drugs increase every year.
Highest-paid CEOs in 2019: Who made the list from healthcare
- Gilead Sciences, Daniel O’Day — $29.1 million.
- Centene Corp., Michael Neidorff — $26.4 million.
- Abbott Laboratories, Miles White — $22.1 million.
- Johnson & Johnson, Alex Gorsky — $19.6 million.
- Walgreens Boots Alliance, Stefano Pessina — $19.2 million.
- Cigna, David Cordani — $19.1 million.
Already vaccine makers are saying that we may need a Covid Vaccine booster shot every year even though there is no long term data as of yet. Pfizer is even taking a step further saying they no longer need a partner in developing future vaccines.
The Times said “many experts now predict that Covid-19 booster shots will become a regular part of our lives for years. An increase in the price of coronavirus vaccines would have considerable impact on American health care spending. If Pfizer raised the price of its coronavirus vaccine from $19.50 per dose to $175, a yearly shot for every American adult would cost $44.7 billion and could increase annual U.S. drug spending by 9 percent”.
What about taxpayers? Government funding contributed to research associated with all 210 new drugs approved by the U.S. Food and Drug Administration between 2010 and 2016 yet did taxpayers receive any discount? The government often funds research and development and then hands off the ownership of vaccines and medicines to companies that can charge whatever price they think the market will bear. Drug companies often demand a premium price to compensate for early risk that was actually borne by taxpayers.
Some pharma CEOs are starting to retire, taking their millions to buy expensive retirement homes and traveling private jets worldwide. Healthcare, in short, is capitalism run amok.
There is a new breed of pharma CEO coming I believe. He, she, has a lot of work ahead of them. First organizations have to trim the fat and become more efficient in all areas. Matrix management has led to delays in decision making and implementation.
Second, they have to recruit people who understand the balance between helping patients and selling products. Online health seekers are often lost and confused with an abundance of health information, which has led to a heavier reliance on their doctors for recommendations and advice. Patients are becoming healthcare consumers, but their doctor is still the gatekeeper of health recommendations.
Third, they have to keep Wall Street at an arms distance. Wall Street only cares about one thing; profits and sales outlook. This in turn has led to a culture of sales and profits first, patients second.
Finally, new CEOs need to look beyond the next quarter and next year. They need to be visionaries to prepare their companies to compete when new legislation is passed. The argument of “we need the money for R&D isn’t true anymore when acquisitions and mergers are becoming pathways to new drugs.
I’m sure every pharma employee would love to make, in their lifetime, what a pharma CEO earns in one year. I’d rather disappoint shareholders than patients, but then again, I don’t need tens of millions of dollars to tell me I’ve done a good job by greedy Wall Street.