Investing in the Pharmaceutical Industry – Still a Smart Bet?

The pharmaceutical industry has been legendary for its huge profits and gains, and it actually gets a bad rap from many consumers for just that reason.  But among investors, recent years have actually shown a slight decline in investing in the pharmaceutical industry.  Stock prices have actually dipped sharply due to a number of issues including things like patent expirations on so-called ‘blockbuster’ drugs, scandals, lawsuits, the rise of generic competition, and much more.  However, despite the fact that it isn’t quite the powerhouse of investing that it once was, investing in the pharmaceutical industry is still worthwhile for a number of different reasons.

One of the key reasons that investing in the pharmaceutical industry may be worth your consideration is simply that most companies have shifted their focus in response to the changing times.  Rather than trying to create the next blockbuster drug to rake in billions, they’ve started to formulate more sustainable long term strategies for success.  For instance, many pharmaceutical companies are now focusing their development efforts on creating niche drugs that benefit small target groups and deliver real benefits to them.  This helps them avoid spending too much money researching a drug only to have patents expire a few years later and lose out on the resulting funds.

Overseas markets are also becoming a primary focus of most pharmaceutical companies, and investing in the pharmaceutical industry will benefit you tremendously if you take the time to investigate whether or not the company you’re thinking of investing in is looking overseas – particularly to Asia, where a massive market for medications has arisen and provides much larger growth opportunities than exist elsewhere.  If you spot a company that’s shifting its focus to Asia, they’re probably well worth investing your money into since a large financial return is highly likely as a result of their globalization.

Timing, patience, and research are vital for successful investing in the pharmaceutical industry.  That’s mainly due to the fact that it can take several years for a new drug to pass FDA approval and reach the market.  You may need to make an initial investment and wait for some time to see a real return on it, and you’ll need to have confidence in your initial investment to ensure that you don’t sell before the real return has presented itself.  In closing, investing in the pharmaceutical industry has always offered rewards to investors.  That hasn’t changed, but the nature of the industry has certainly shifted somewhat.

About Richard Wilson