Are Pharmaceutical Companies Immune to Recession

The world is going through a crucial time. Recession has hit the world and all industries; more or less, are affected by it. All of a sudden, uncertainty has become a part of almost all the sectors. We have not experienced such a financial crisis since 1930s. The year 2008 was marked by uncertainty and volatility in the global financial environment. The consequences of the financial crisis have caused severe inflationary pressures. Such an environment has generated deteriorating conditions even for the pharmaceutical industry. On the other hand, pharmaceutical companies have never proven to be a vulnerable sector to volatility and are not completely sensitive to economy.

This is an industry which knows that their industry will not be severely hit as illness never understands financial crisis, even in the hour of recession. People need healthcare regardless of the economy. This is the reason that healthcare providers have been one of the top performers, till now. People are running to invest in healthcare sector as it is considered to be the safest in times like this. The pharmaceutical sector has done fairly well in the US stock market and has brought flow of money in the sector. It is not that pharmaceutical industry has escaped the recession; there is certainly a decrease in growth but not ruthless decline. The sector is not as severely hit as the banking and financial sector or the automotive sector.

Global healthcare spending is definitely going to expand as the life expectancy has grown in the past. Long lived consumers will increase the demand for pharmaceuticals. As per the US census bureau, 24% of the nation’s population is 55 years and older as of July 1, 2008. Further, it has forecasted that the number of people in this age group would increase to approximately 97 million by 2020. The growing population in US, combined with chronic disease will ensure continued growth of the pharmaceutical industry.

Pharmaceutical companies are also focusing on merger activities with biotechnology firms. Present economic slowdown has given an opportunity to big pharmaceutical companies; to focus on biotechnology companies, to boost their R&D pipeline. In today’s environment, when the Japanese Yen is rising against US Dollar, Japanese companies are in a better position to buy pharmaceutical or biotech companies.

During the economic downturn pharmaceutical companies are also facing challenges from generic drugs, expiry of patent of some of their blockbuster drugs and hesitance of FDA for new drug approval. In this time of recession, the pharma companies have shown great interest in online marketing. Few companies are taking the help of Search Engine Optimization (SEO) and are witnessing successful results. The company may see strong online brand presence, if online marketing strategy is implemented in the right way. Pharmaceutical companies can also take advantage from various online portals.

In this context, Pharmaceutical Business Review has emerged as a provider of market analysis and business intelligence report on biotechnology, drug discovery, healthcare services, OTC, drug delivery, drug manufacturing, medical devices and CRO (Contract Research Organisation). It keeps the pharmaceutical companies informed on latest news and reports. This helps the companies in analyzing the latest trend of medical and pharmaceutical industries in this time of crisis.

It seems that this tough time is here to stay for all the industries including pharmaceutical sector, but the silver lining is that healthcare spending is going to increase. This will help pharmaceutical companies in growing and the focusing on online marketing which will eventually prove to be highly helpful for the economy.

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Biomedical and Generic Drugs are among the top ranked groups thanks to strong numbers from ALO, AMGN and TEVA.
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