Effexor tops list of high-margin meds

Drug companies talk a lot about recouping R&D costs when pricing meds, but let's face it: Pharma is a for-profit business, usually with shareholders to satisfy. So profit is key, and profit margins are a closely watched measure. Now, thanks to Sanford Bernstein über-analyst Tim Anderson (via Pharmalot), we now know which big drugs deliver the most pretax profits to their respective companies' bottom lines.

Anderson put a pencil to 52 blockbuster meds and found that some 30 of them had pretax margins of 70 percent or more. That's more than twice the pharma average of 32 percent, Pharmalot notes. As you might imagine, the big-margin meds are older drugs whose R&D costs are long amortized. Plus, marketing for older brands tends to be less costly than big-time drug launches are, which also helps to explain the broader margins.

That's enough of an intro; what you're really interested in is brand names. So here are the top 10.

  • Effexor, antidepressant, 87 percent margin for Pfizer
  • Arimidex, cancer treatment, 85 percent for AstraZeneca
  • Femara, cancer treatment, 84 percent for Novartis
  • Detrol, overactive bladder treatment, 84 percent for Pfizer
  • Gemzar, cancer treatment, 84 percent for Eli Lilly
  • Xeloda, cancer treatment, 82 percent for Roche
  • Lipitor, cholesterol remedy, 82 percent for Pfizer
  • Zometa, bone drug, 81 percent for Novartis
  • Plavix, anti-clotting agent, 81 percent for Bristol-Myers/Sanofi-Aventis
  • Taxotere, cancer treatment, 80 percent for Sanofi

You'll notice that half of the top 10 are older cancer drugs that are still standard therapies. Two are cardiovascular drugs, and several make appearances on the top 10 bestselling meds as well.

- read the Pharmalot post