Lilly Gross Profit of 84%– Show No Mercy

Lilly announced an earnings increase of 23% over last year’s results.

“Lilly, which reiterated its 2009 earnings target, is among a slew of pharmaceutical firms that have raised some prices aggressively.” in recent months even as government and private insurers struggle to rein in health care costs.”

“Gross margin rose to 83.8% from 76.9% (Medicynical emphasis) as the stronger dollar eased international sales costs. Total sales costs slumped 27%.”

Investopedia defines gross margin as “A financial metric used to assess a firm’s financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold.Gross Profit = Revenue − Cost of Goods Sold.”

Medicynical Note: Big profits, seemingly defying the pull of gravity (the current financial crisis). It would seem to me that 86% margin is excessive. But then what is excess profits in a capitalistic society? The larger question is can we afford this level of profits in health care? How to limit? Should we limit?

New advances that we cannot afford have the same impact as trees falling in the woods.

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