Pharmaceuticals: Introduction


Recently, the pharmaceuticals industry, which is composed of drug makers, distributors, and wholesalers, along with biotechnology firms, has been doing very well relative to other industries. Between 1992 and 2002, revenue has more than tripled among biotech firms alone, reaching nearly $30 billion. An increasingly aging population taking more and more medications promises further growth.

The Pharmaceuticals industry is Highly Concentrated. The production in this industry is dominated by a small amount of large firms that are able to shape the industry’s direction and price levels.

Primary Demand Drivers

  • Treatments demanded by global societies

Profitability Drivers

  • Ability to discover and market new drugs
  • Specializing in drugs that target specific ailments