Generic Drug Sales To Outpace Other Sub-Sectors

BMI View: The pharmaceutical sector and the wider healthcare industry offer stable returns for investors. This is due to the underlying fundamentals of ageing populations and the associated increase in chronic diseases, such as cancer, diabetes and cardiovascular conditions. A more detailed assessment of the sub-sectors reveals a multitude of trends and varying degrees of profitability. The positive outlook for pharmaceuticals and healthcare entails numerous upcoming investment opportunities. However, as always, there are many risks, such as price controls, health technology assessment and rationalisation of prescribing.

Latest forecasts from BMI reveal that global generic drug sales in US dollar terms will post a compound annual growth rate (CAGR) of 7.5% over the next five years. This rate of expansion exceeds the other key industry sub-sectors for healthcare (+5.0%), over-the-counter (OTC) medicines (+4.1%) and patented drugs (-0.2%). In terms of absolute value in 2012, the leading sub-sector is, by a considerable margin, healthcare (US$7.1trn), followed by patented drugs (US$667bn), generic drugs (US$249bn) and OTC medicines (US$124bn).

Patented Drugs

Positive Outlook But Risks Remain
Growth In Global Expenditure For Patented Drugs, Generic Drugs, OTC Medicines & Healthcare (US$ y-o-y change)

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Sector: Pharmaceuticals & Healthcare

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