Dose of Reality: Breaking Down Big Pharma’s Year of Bad Behavior in 2025: Part IV: Big Pharma’s Debunked Innovation Rhetoric
Big Pharma Undercut Its Own False Claims About Innovation in 2025
With each new year comes a time-honored tradition for Big Pharma: Hiking prices on hundreds of brand name prescription drugs in the first weeks of January. A good time to review Big Pharma’s year of bad behavior.
This year, Big Pharma continued to double down on debunked claims about innovation to undermine market-based solutions that would lower drug prices for American patients.
In the first installment of our year-end series, we reviewed Big Pharma’s egregious pricing practices in 2025, including continuing to hike prices faster than the rate of inflation and bringing new drugs to market with skyrocketing launch prices.
In the second installment of our series, we looked at the impact of Big Pharma’s aggressive marketing tactics and staggering spending on direct-to-consumer (DTC) advertising.
In the third installment, we explored new data from 2025 on the staggering cost of Big Pharma’s anti-competitive tactics, including abuse of the U.S. patent system.
In our last installment of this series (before Big Pharma starts hiking prices anew in 2026), we’ll recap how the pharmaceutical industry debunked its own rhetoric on innovation in 2025:
PhRMA REDUXES SAME DEBUNKED ARGUMENTS ON INNOVATION
Big Pharma’s Innovation Rhetoric Designed to Keep Drug Prices High Rather Than Unlock True Breakthroughs for Patients
In February, Big Pharma’s principal trade group, the Pharmaceutical Research and Manufacturers of America (PhRMA), released a report rehashing the same tired and debunked arguments on innovation that brand name drug companies have hidden behind as an excuse to keep drug prices high for years.
Big Pharma routinely asserts research and development (R&D) costs justify out-of-control prescription drug prices and claim solutions to lower drug prices would threaten innovation into new breakthroughs. These arguments simply don’t hold up to the facts — and are part of a Big Pharma strategy to maintain the status quo where they can focus on gaming the system to block competition and keep drug prices high, rather than on true innovation.
Multiple studies have found Big Pharma’s price hikes have very little connection to the cost of its development or improvements in drugs’ efficacy. In other words, brand name drug companies set the prices of their products, and hike prices, to maximize their profits — not because there is any true connection to innovation.
- “No Association” Between Drug Company’s Prices and Investments In Research & Development.A September 2022 paper in The Journal of American Medical Association (JAMA) Network Open examined a subset of 63 drugs approved by the U.S. Food and Drug Administration (FDA) between 2009 to 2018, representing around one-fifth of the drugs approved by the FDA during this time span. The researchers found that for this subset of drugs, “there was no association between estimated research and development investments and treatment costs based on list prices at the launch of the product or based on net prices a year after launch.” (“Association of Research and Development Investments With Treatment Costs for New Drugs Approved From 2009 to 2018,” JAMA Network Open, September 26, 2022)
- No “Meaningful Association Between Cancer Drug Prices And The Magnitude Of Benefit For Any End Points.”An October 2022 study in JAMA Internal Medicine found a lack of correlation between the prices set by Big Pharma on cancer drugs and their effectiveness for patients. “We did not detect a meaningful association between cancer drug prices and the magnitude of benefit for any of the end points,” the researchers wrote. “This suggests that cancer drugs are priced based predominantly on what the market will bear.” In other words, Big Pharma sets prices to maximize profits, not based on clinical value or outcomes for patients. (“Association Between US Drug Price and Measures of Efficacy for Oncology Drugs Approved by the US Food and Drug Administration From 2015 to 2020,” JAMA Internal Medicine, October 31, 2022)
Big Pharma also benefits from U.S. taxpayers carrying a substantial share of the load for R&D research intro true breakthroughs:
- “The U.S. Taxpayer Has Funded Research For Every Single One Of The 210 New Drugs That The FDA Approved Between 2010-16,” noted economist Mariana Mazzucato in a 2018 column for The Washington Post. “Yet the companies that have access to this research are increasingly viewing pharmaceuticals in the same way that banks view their financial product — opportunities for short-term returns.”
Big Pharma’s report opened with a letter from PhRMA’s President and CEO Stephen J. Ubl and Gilead Chairman and CEO Daniel O’Day, who jointly tout, among other things, the alleged success of the pharmaceutical industry’s medical innovation over the past 25 years. One such example the executives cite is the progress in HIV treatments, stating, “We’ve…helped turn HIV/AIDS into a manageable condition.”
What they failed to mention is that Gilead itself delayed patient access to innovation that would have supported better health outcomes. In a particularly egregious case study in the Big Pharma practice known as “product hopping,” Gilead purposely delayed the market entry of a less toxic version of their HIV treatment so that they could run out a longer period of monopoly on their existing treatments, then establish maximum exclusivity on the safer treatment — to boost profits at the expense of leaving patients waiting for the improved treatment option.
BIG PHARMA’S RHETORIC OF DEFLECTION DOESN’T ADDRESS CAUSE OF HIGH PRESCRIPTION DRUG PRICES
PhRMA Continues to Dodge Responsibility for Egregious Pricing Practices and Anti-Competitive Tactics
In September, an opinion piece published in The Washington Post from PhRMA President and CEO Steve Ubl was a classic rerun of Big Pharma’s deflection playbook, filled with empty promises and grand pledges meant to deflect responsibility and dodge accountability for high prescription drug prices.
PhRMA, of course, does not acknowledge rapidly rising launch prices being set by brand name manufacturers on new products, years of egregious and unjustified price hikes outpacing inflation, especially on blockbuster medications, or the litany of anti-competitive tactics deployed by Big Pharma to undermine competition from more affordable generics and biosimilars.
Instead, PhRMA falls back on its usual finger-pointing at others in the drug supply chain, with claims about the industry’s commitment to the American people they continue to price-gouge thrown in.
The fact is that brand name drug companies continue to shelter profits overseas to avoid paying U.S. taxes. As documented by a U.S. Senate Committee on Finance investigation in March, companies like Pfizer have perfected “round-tripping” tax avoidance schemes, shifting profits from U.S. sales into foreign subsidiaries. This accounting trick allows pharmaceutical companies to avoid paying billions in federal income tax by treating sales to U.S. customers as foreign income. U.S. Senator and Ranking Member Ron Wyden (D-OR) described Pfizer’s move as “what could be the largest tax-dodging scheme in the history of Big Pharma.” Other Big Pharma giants cited for similar practices include Merck, AbbVie and Amgen.
As policymakers return to Washington in 2026, they should take note of the pharmaceutical industry’s continued egregious pricing practices and work to advance bipartisan, market-based solutions to hold Big Pharma accountable.
Read our first blog in this series on Big Pharma’s egregious price hikes and increasing launch prices HERE.
Read our second blog in this series on Big Pharma’s massive spending on direct-to-consumer advertising HERE.
Read our third blog in this series on Big Pharma’s anti-competitive abuse of the U.S. patent system HERE.
Learn more about market-based solutions to hold Big Pharma accountable and lower prescription drug prices HERE.
And stay tuned for the start of Big Pharma’s annual tradition of welcoming the new year with egregious price hikes on hundreds of brand name prescription drugs.
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