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
Sep 23, 2024 - Prices Of 10 Costliest Prescription Drugs Lowered For Medicare Recipients
- 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.
- Multiple stakeholders are to blame for the high cost of prescription drugs in the US, according to patient advocacy organization Patients for Affordable Drugs (PAD). The primary actors, however, are pharmaceutical companies, which abuse the “patent system to maintain monopolies and keep drug prices high,” according to Merith Basey, executive director of PAD. Pharmaceutical companies incorporate practices like “patent thickets” that secure multiple patents on a single product, she said. They also use “pay-for-delay deals” in which brand name drugmakers pay potential generic and biosimilar competitors to prevent them from bringing their product to market. The Pharmaceutical Research and Manufacturers of America (PhRMA) counters that other stakeholders bear the primary responsibility for high prices. “It’s [pharmacy benefit managers] and insurers – not patents – blocking competition and driving up costs,” said Cat Hill, PhRMA spokesperson. “America’s patent system incentivizes innovation and competition, which is why more than 90% of prescriptions are filled with generics. Unfortunately, middlemen are increasingly denying coverage of low-cost generics and biosimilars because they pocket more profits off higher priced medicines.”
- 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 moderately during the first seven months of 2024, according to the US Bureau of Labor Statistics (BLS). Pharmaceutical manufacturers raised their prices slightly during the first seven months of 2024, according to the BLS.
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.