The top 10 most profitable pharma companies in 2021

20 June 2022

Angus Liu, Eric Sagonowsky, Kevin Dunleavy, Fraiser Kansteiner, Zoey Becker / FiercePharma

While revenue reflects how well a pharma company’s products and services are selling, profit is an important metric that gives investors a look at the health of the business and how efficiently it has been managed.

Here, we rank the top 10 pharma companies by 2021 net income, also known as net earnings or the bottom line.

The six largest drugmakers by 2021 revenue—Johnson & Johnson, Pfizer, Roche, AbbVie, Novartis and Merck & Co.—all made the top profits list but in quite a different order.

With $24 billion in net income, Novartis was unexpectedly the most profitable pharma company in 2021, beating Pfizer and J&J, which recorded $22 billion and $21 billion, respectively. While Novartis did improve its profit margins as a percentage of sales, it was one special item that helped nearly triple the Swiss pharma’s net profit.

Having one large, highly profitable product may not be healthy for a company over the long run, but it can make annual financial numbers look attractive. Take Merck. While the New Jersey pharma spun off established medicines into Organon, growth from megablockbuster PD-1 inhibitor Keytruda still helped boost the company’s top line and bottom line.

Several companies enjoyed a big windfall from selling COVID-19 products. Vaccine developers Moderna and BioNTech and COVID antibody drug maker Regeneron ranked Nos. 6, 7 and 9, respectively on our top profit roster, edging out several Big Pharma firms.

Speaking to the marvel of having one monstrous asset and a relatively lean corporate structure on the cost side, Moderna’s and BioNTech’s 2021 net profit margins reached 66% and 54%, respectively.

Novo Nordisk, with 2021 revenue that ranked 17th in the industry, rounded out our top 10 profit list. With a focus on diabetes and some related cardiometabolic conditions, the Danish company has in the past few years enjoyed steady margins around 33%. By comparison, despite bigger sales, fellow diabetes players Eli Lilly and Sanofi didn’t make the cut.

Other notable missing names include Bristol Myers Squibb, GSK and AstraZeneca. Last year, AZ’s earnings crashed to just $112 million, partly thanks to a few months of losses from selling its COVID vaccine and restructuring costs after the Alexion acquisition.

It’s also worth noting that companies generally reported year-over-year increases in administrative expenses, which is understandable given how COVID-19 dampened normal business operations in 2020 and that drugmakers took on extra costs to adjust in 2021.

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