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
                                      Source: Vertical IQ and Inforum

                                      Recent Developments

                                      Jul 13, 2024 - Employment Decreases
                                      • Pharmaceutical manufacturing industry employment decreased slightly during the first five months of 2024 while wages for nonsupervisory employees increased moderately, according to the US Bureau of Labor Statistics (BLS). Pharmaceutical manufacturers raised their prices slightly during the first five months of 2024, according to the BLS.
                                      • 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."
                                      • 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.
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