The Private Equity Firm That Quietly Profits on Top-Selling Drugs<br />A March report by Moody’s Investors Service noted that Royalty Pharma’s portfolio “has benefited from high price increases in the U. S. pharmaceutical market”<br />and could be “adversely affected if the environment for U. S. pricing dramatically changes or if new legislation is passed that targets U. S. drug pricing.”<br />Royalty Pharma’s top three drugs have had average annual price increases of 15.7 percent<br />over the past three years, according to Elsevier’s Gold Standard Drug Database.<br />In the case of Humira, the top-selling drug that was released in 2003, Royalty Pharma paid $700 million for a royalty interest of less than 3 percent,<br />which helped the pharmaceutical giant AstraZeneca finance a $1.3 billion purchase in 2006 of the drug developer Cambridge Antibody Technology.<br />While it is pharmaceutical companies that generally set drug prices, some of the drugs in<br />which Royalty Pharma owns royalty rights have been criticized for their high prices.<br />But a little-known private equity investor, Royalty Pharma, has built an unusual investment portfolio valued at $15<br />billion — it buys up the rights to royalties on future drug sales — while largely avoiding public controversy.
