Pharmaceutical Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 2,300 pharmaceutical manufacturers in the US are engaged in researching, developing, manufacturing and marketing chemically-derived drugs and biologicals for human or veterinary use. A few large, multinational firms dominate the industry; but there are also a large number of smaller start-up or development firms, particularly in the biotech segment.
Competition From Generic Products
Branded prescription drugs face competitive challenges from generic pharmaceutical manufacturers.
Expanded Managed Care Influence
Managed Care Organizations (MCOs), Medicaid, and other government agencies continue to seek price discounts on or increased rebates for pharmaceuticals.
Industry size & Structure
An average pharmaceutical manufacturer generates about $108 million in annual revenue and has about 150 employees.
- The pharmaceutical manufacturing industry consists of about 2,300 companies with $248 billion in sales and 346,000 employees.
- A few large, multinational firms dominate the industry, but there is also a large number of smaller, start-up, or development firms, particularly in the biotech segment.
- Large pharmaceutical manufacturers include Pfizer, Merck, Johnson & Johnson, Eli Lilly, and Bristol-Myers Squibb.
- The states with the highest number of pharmaceutical manufacturers are California, New Jersey, New York, Florida and Texas.
- The largest concentration of biotech firms are in California, Texas, Pennsylvania, Massachusetts, and Wisconsin.
Industry Forecast
Pharmaceutical Manufacturers Industry Growth
Recent Developments
Nov 4, 2024 - Medicare Part D Payment Updates Finalized
- Annual out-of-pocket costs for the Medicare Part D drug benefit will be capped at $2,000 in 2025, according to the Centers for Medicare & Medicaid Services (CMS). Many insurers are increasing premiums for their stand-alone drug plan offerings, however, according to health policy research firm KFF. Some major plan sponsors, including Aetna and UnitedHealthcare, are also reducing their stand-alone prescription drug plan offerings, and overall, there will be fewer prescription drug plans in 2025 than in 2024 – 524 plans nationwide, down from 709 in 2024.
- The Biden administration reached an agreement with drugmakers to lower prices on the 10 costliest prescription drugs under Medicare beginning in 2026. The agreement with drugmakers is projected to save older adults $1.5 billion in out-of-pocket costs when the new prices go into effect in 2026. The drugs are purchased through Medicare Part D, a prescription drug coverage program for Americans who are 65 and older. The 10 medications were used by 9 million patients with Medicare coverage in 2023 and accounted for $56.2 billion in total Medicare spending. The government estimates that, had the negotiated prices been in place that year, Medicare would have saved about $6 billion. Total annual spending on prescription drugs in the US exceeds $405 billion, and Part D alone accounts for more than $215 billion.
- Shortages of 11% of generic active pharmaceutical ingredients (APIs) made by global manufacturers were tied to generic drug shortages in the US during the first two years of the COVID-19 pandemic, according to a research letter published in JAMA. About 35.3% of plants making APIs in shortage were located in India, 12.1% were in Italy, 10.7% were in China, and 9.6% were in the US. "Identifying API manufacturers linked to shortages could guide FDA inspections and help prioritize approvals of new entrants in vulnerable markets," the study authors wrote. "Although the pandemic posed additional strain to global supply chains, highlighting the importance of strong generic drug supply chains for national security, drug shortages have continued to increase since then."
- Pharmaceutical manufacturing industry employment and wages for nonsupervisory employees increased slightly during the first nine months of 2024, according to the US Bureau of Labor Statistics (BLS). Pharmaceutical manufacturers raised their prices slightly during the first nine months of 2024, according to the BLS.
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