Each year brand drugmakers make tens of millions of dollars in payments to doctors – consulting fees, speaking honoraria, meals travel and more. How and why does this happen?
A new analysis of disclosures from 10 of the largest brand drugmakers, contained from the Centers for Medicare and Medicaid Services (CMS) Open Payments data, shows that these manufacturers spent nearly $200 million on payments to more than half a million doctors in 2024.
CMS data shows that doctors receiving payments from these brand manufacturers then billed fee-for-service Medicare for $45 million for drugs made by those same manufacturers in 2024. The return on investment for those manufacturers was $220 in sales for every dollar in doctor payments.
Besides the millions in direct payments to doctors, brand drugmakers spend billions yearly on tax-deductible direct-to-consumer advertising to boost demand for their most costly products and engage in anti-competitive tactics that block lower-cost competition. This has helped the drugmakers make profit margins of 23.2%, which is high in the health care sector.
One backdrop to this is the high cost of healthcare. Americans paid a staggering $915 billion for prescription drugs last year, and in 2026 spending is projected to approach $1 trillion. The cycle continues with little policy scrutiny. And while health plans are working to help Americans afford the medications they need, more needs to be done at the legislative level.