This working paper investigates the tension between innovation and financialization in the U.S. pharmaceutical industry, focusing on how excessive value extraction undermines medicine development and exacerbates inequalities in access and affordability. By examining the evolving role of the stock market and analyzing imbalances in value creation and extraction, the study aims to identify institutional and organizational reforms that can promote both medical innovation and a more equitable distribution of its gains. The study’s empirical focus is on the U.S. pharmaceutical industry, placed within its global context, and examines the historical evolution of this tension, the key beneficiaries of excessive value extraction, and its impact on drug safety, efficacy, accessibility, and affordability. Ultimately, the research seeks to inform policy and practice to ensure that life-saving medicines are developed and made accessible to all who need them.
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