Rising drug spending has led to increased calls to curtail drug costs. However, it is unclear where to target policy solutions. We estimated excess returns (the extent to which a firm’s profits are higher than expected given the risk associated with their investments) for manufacturers and middlemen in the pharmaceutical supply chain to determine who is making excessive profits. Excess returns were calculated as the difference between return on invested capital and the expected returns given risk, which is known as the weighted average cost of capital. We compared excess returns for manufacturers and middlemen to the average for S&P 500 companies. We find that both manufacturers and middlemen have higher excess returns in 2013–2018 compared with the S&P 500. However, if we treat research and development (R&D) as an investment rather than an expense, we find that excess returns for pharmaceutical manufacturers are lower than the S&P 500 (1.7% vs. 3.6%), but biotech manufacturers (9.6%), wholesalers (8.1%), and insurers/PBM/retailers (5.9%) continue to have significantly higher excess returns compared to the S&P 500. Our findings suggest public policies that promote competition in all areas of the pharmaceutical supply chain are important avenues for curtailing drug spending.

不断增加的药物支出导致要求削减药物成本的呼声越来越高。然而，目前尚不清楚政策解决方案的目标。我们估计了制药供应链中的制造商和中间商的超额回报（考虑到与其投资相关的风险，公司的利润高于预期的程度），以确定谁在赚取超额利润。超额回报计算为投资资本回报与给定风险的预期回报之间的差额，称为加权平均资本成本。我们将制造商和中间商的超额回报与标准普尔 500 指数公司的平均回报进行了比较。我们发现，与标准普尔 500 指数相比，制造商和中间商在 2013-2018 年都有更高的超额回报。