Rep Alexandria Ocasio-Cortez Blasts President David Mitchell Big Pharma Ponzi Scheme Stock Buybacks
One reason why drugs are so expensive: Pharma CEO pay is often tied to their stock price.
That means Big Pharma spends more 💰 buying their own stocks than in research & dev to make prescriptions cheaper. It’s a huge Ponzi scheme.
Congress needs to end the stock buyback. https://t.co/dR0VAtvne0
— Alexandria Ocasio-Cortez (@AOC) July 26, 2019
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[Rep Alexandria Ocasio-Cortez Blasts President David Mitchell Big Pharma Ponzi Scheme Stock Buybacks]
[Alexandria Ocasio-Cortez:] Source: LYBIO.net
Alexandria Ocasio-Cortez: Mr. Mitchell, are you familiar with stock buybacks?
[David Mitchell:]
I know what they are.
[Alexandria Ocasio-Cortez:]
And what is a stock buyback?
[David Mitchell:]
It’s when a company decides to purchase shares of its stock in order to drive up its stock price.
[Alexandria Ocasio-Cortez:] Source: LYBIO.net
So between those roughly 10 years, $465 billion was spent on research and development. The amount that pharmaceutical spent on that same time to buy their own stock for the sole purpose of driving up the price was $516 billion. So they spent more than their entire budget on research and development on a tactic to drive up their own stock price.
Stock buybacks used to be illegal in this country. And once they were made legal, they were made – they were allowed. And one of the things is that – when a company buys their own stock, it drives up the price of their stock. And something is not talked about is that CEO pay is tied to stock price.
So CEO’s, right now are not incentivized to invest in research and development. They’re incentivized to raise their stock price.
So, you know – there’s a lot of debates as to what can be structured, how – whether we can go single payer, whether we maintain our insurance system the way that it is, how you make it more competitive, whether you don’t, et cetera.
But I think one very clear thing that we can see, Mr. Chair, is that if we eliminated stock buybacks, we could reduce the cost outlays of insurance company or pharmaceutical companies by at least half when you compare just research and development and the stock buybacks alone.
And again, I just want to thank each and every single one of you for sharing your stories today because there is – there is no reason for a drug as simple as insulin, which costs $21 dollars in Canada for a 10 milliliter bottle to cost the equivalent of a mortgage payment or sometimes two mortgage payments. And with that, I yield, thank you.
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Rep Alexandria Ocasio-Cortez Blasts President David Mitchell Big Pharma Ponzi Scheme Stock Buybacks. There is no reason for a drug as simple as insulin, which costs $21 dollars in Canada for a 10 milliliter bottle to cost the equivalent of a mortgage payment or sometimes two mortgage payments. Complete Full Transcript, Dialogue, Remarks, Saying, Quotes, Words And Text.