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 2,200 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 $106 million in annual revenue and has about 159 employees.

    • The pharmaceutical manufacturing industry consists of about 2,200 companies with $233 billion in sales and 350,500 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
                                      Source: Vertical IQ and Inforum

                                      Recent Developments

                                      Mar 18, 2024 - Prices Increase
                                      • Pharmaceutical manufacturers raised their prices slightly during 2023, according to the US Bureau of Labor Statistics (BLS). Employment decreased slightly during the year while wages for nonsupervisory employees rebounded following a late-2022 decrease, according to the BLS.
                                      • A second legal challenge to Medicare's new power to negotiate the prices of some prescription drugs with manufacturers was rejected on March 1. Manufacturers of the first 10 drugs selected for negotiations had until March 2 to respond to Medicare's initial price offer for their treatments. Final negotiated prices for the first round of drugs will go into effect in 2026. US District Judge Colm Connolly wrote in his opinion that manufacturer AstraZeneca has not identified a property protected by the constitution that will be jeopardized by the price talks. He added that AstraZeneca's participation in the Medicare market is voluntary, so the company's "desire" or even "expectation" to sell its drugs to the government "at the higher prices it once enjoyed does not create a protected property interest." The ruling comes a month after a federal judge in Texas tossed a separate lawsuit challenging the price talks. Some pharmaceutical manufacturers have said that they intend to escalate the issue to the US Supreme Court.
                                      • Widespread shortages of essential cancer medications are increasing in the US, with the US Food and Drug Administration (FDA) reporting cancer drug shortages to be the worst in three decades. Generic medicines are particularly affected, resulting in a scarcity of numerous highly effective chemotherapies including cisplatin, carboplatin, dacarbazine, and methotrexate. These medications are recommended by the National Comprehensive Cancer Network (NCCN) in the management of over a dozen cancers. Of the 40 cancer medicines currently included in the US FDA Shortages Database, nearly all are listed in NCCN guidance as category 1 or 2A treatments, denoting a high level of supporting evidence for their efficacy and panel consensus of their essential value. Over half are listed on the World Health Organization Model List of Essential Medicines. This situation has forced clinicians to modify or withhold cancer treatment to ration medicines, with more than 100,000 patients affected and more likely to be affected if no action is taken, according to the The Lancet Oncology journal.
                                      • Pharmaceutical distributors are calling for the US Food and Drug Administration to grant a two-year delay in enforcing the pharmaceutical tracking provisions of the Drug Supply Chain Security Act (DSCSA), saying that industry still does not have the necessary tracing systems in place to comply with the law. DSCSA requires manufacturers, wholesalers, distributors, and dispensers to exchange serialized product information beginning on November 27, 2023, and marks the culmination of the law’s phased implementation. The Healthcare Distribution Alliance is instead calling for a phased approach to implementation to minimize supply chain disruptions and avoid drug shortages.
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