Industry Overview
The Pharmaceutical industry is composed of companies that research, develop, produce, market, and sell chemical or biological substances for medical or veterinary use; these products include: prescription, generic, and over-the-counter drugs; vitamins and nutritional supplements; diagnostic substances. The companies also develop and manufacture drug delivery systems. The U.S. Pharmaceutical industry is the world leader in pharmaceutical research and drug production, with worldwide sales expected to reach $650 billion in 2006 (Pharma Executive).
The U.S. Department of Labor and Statistics reports that this industry ranks among the fastest growing manufacturers in the United States. It has enjoyed tremendous growth over the last decade, as annual sales have nearly doubled. The industry has also enjoyed generous profit margins, consistently outperforming the S&P's 500 Index. It is expected that such prosperity will continue unabated.
Some of the factors contributing to this growth are increased life expectancies and the concomitant demographic expansion in older segments of the population, an increase in the standard of living in developing countries, and also increased numbers of untreated persons, such as those with elevated cholesterol levels or diabetes. Not surprisingly, seniors represent the largest market for prescription drugs. As their numbers expand, so does demand for pharmaceuticals (csustan).
The introduction of breakthrough drugs also fuels the industry's growth. In recent years, companies have successfully developed and marketed new treatments for heart disease, cancer ...