Industry sales outlook decreasing

Although many still consider Big Pharma to have more padding during the U.S. economic crisis than other industries, drug companies are still going to take their share of punches. According to this morning's Wall Street Journal and a report from IMS Health, drops in revenue due to lagging U.S. sales might be more dramatic than analysts previously have predicted.

While prescriptions are slightly up, patients are going to the doctor less and are switching to generic medications whenever possible to save money. The most cash-strapped individuals are cutting doses in half or even skipping doses. While choices like these might sound like small potatoes, they could influence revenue significantly and some predict drug sales to increase by only one percent next year, which would be the slowest growth rate since 1958. 

Already in the news, several key players will be facing patent expirations in the next four years, but the industry is also seeing fewer drugs make it to market due to increased regulations. As a result, many companies are transferring parts of their business to emerging markets, which does not help the U.S. economy either. The influence of pharma likely spreads to employment rates, too, since big pharma has cut over 100,000 jobs in the last five years. 

The total U.S. pharmaceutical market will grow to somewhere between $292 billion and $302 billion, but sales could slow by as much as 3 percent, or $10 billion, as a result of companies and consumers adapting to the economic downturn.

- read the Wall Street Journal story

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