Here's yet another reason why we need to keep a close eye on the behavior of corporations. 

They often provide the very reasons why regulations are necessary, whether it's the big banks' devising corrupt ways to game the financial system or cutting corners to put the safety of their employees in peril.

The big pharmaceutical firms, whose drug pricing has always been suspect, always claim those high prices are necessary because the money pays for expensive crucial research on new cures and treatments.

Most politicians and a lot of us take that excuse at face value, but a new study to determine if that is actually true finds otherwise.

A recently published paper from the Institute for New Economic Thinking reveals that the big drug companies have spent more on share buybacks and dividends during the last 10 years than they did on research and development.

According to the five authors who participated in the academic study, between 2006 and 2015 the 18 biggest drug firms in the Standard and Poor's 500 index spent a combined $516 billion on buying back stock and declaring stockholder dividends compared to $465 billion spent on research.

The paper further reports that Big Pharma has been mainly living off decades-old patents and hasn't much to show in the way of new blockbuster drugs.

One of the authors interviewed by The New York Times commented "(T)here really is very little drug development going on in companies showing the highest profits and capturing much of the gains."

So, like so many things that in reality are gouging American consumers, we need to take with a grain of salt the excuses we're told.

Dave Zweifel is editor emeritus of The Capital Times. dzweifel@madison.com and on Twitter @DaveZweifel

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