The 1%. This a term popularized by the infamous Occupy Wallstreet movement. It was the first time the term had truly gained traction in the media. People from all over the world were watching the United States have a national dialogue regarding its own inequity issues.
The term 1% comes from the statistic that only 1% of Americans earn around $500,000 a year or more. A large part of the negative connotation surrounding the 1% is that the rules and laws typically favor the 1%. The average American citizen does not get the same fair treatment and equal opportunities as the 1%. And as social inequity discord grows in America, so does the backlash against this particular class of people.
But one slightly concerning issue that has recently been exposed is how the 1% class has become interconnected with our healthcare system. As part of the Dodd- Frank Act, publically traded health companies are now required to disclose medium employee compensation. Reports have shown that some biotech companies have medium annual salaries as high at $800,000.
These figures place these employees well into the 1% class. So one has to ask the question, how exactly are these biotech employees making so much money? And what kinds of systems are in place that incentives these type of pay plans? First, let’s look at some of the numbers.
The Biomedical Industry at a Glance
- The average Biomedical company employees between 100-500 people total
- The average CEO of a biomedical company makes approx. $100 dollars for every one dollar earned by an employee.
- The average profit of a Biomedical exceeds over 8 billion dollars. (https://www.statista.com/statistics/272720/top-global-biotech-and-pharmaceutical-companies-based-on-net-income/)
Biomedical and drug companies are among the most profitable companies in the entire USA. A big reason for this is that these companies tend to specialize in extremely rare and hard to treat disorders. This allows a company to have an effective monopoly over the cure to a disorder, simply because no other companies put the time and research into treating these issues.
A perfect example of this was when Martin Shkreli, former hedge fund manager of Elea Capital, famously raised the price of an anti-patristic drug called Daraprim by over 6000%. At the time, only 1 company was actively making the drug, and Shkreli’s hedge fund purchased the patent. Then Shkreli dramatically raised the price of the drug, enabling his group to reap billions of dollars in profits off the drug.
While on the surface this action may seem morally reprehensible, it was in fact totally legal. In fact, Shkreli was only found guilty on fraud charges associated with another matter, not because he raised the price of the drug. So while Shkreli found himself facing the wrath of the country, his business partners were able to carve out a handsome profit for themselves.
The Future of Biomedical and Drug Company Pay
For most people in the nation, the Shkreli story was their venture into the high stakes world of drug profits. It’s safe to say that the average American did not realize just how much money various drug companies and CEO’s were making off of them. And as drug prices and drug company employee pay increases, so do the mistrust.
A recent Senate Judicial hearing in the United States proved this, as a new bipartisan effort has emerged to rein in both healthcare costs and drug prices in the USA. These efforts will ultimately affect drug company profitability and employee pay.
So what do you think? Do you think Drug company pay will continue to put workers in the 1% class?
Let us know in the comment sections below.
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A biotechnology and sci fi nerd, that enjoys writing about new innovations within the science world and industry.