Diversification May Be At Play As Big Pharma Deals With Challenges

Pharmaceuticals have been, and are forecasted to be, the main revenue driver for big pharma, but reliance on this market could shift because of challenges, ranging from generic and biosimilar competition to low R&D productivity. An analysis based on the indicative profit potential metric finds that branded prescription drugs remain the most profitable market to play in, but other sectors may offer opportunities.

Pharmaceuticals have been, and are forecasted to be, the main revenue driver for big pharma, a peer set group of companies that surpass more than $15 billion in annual revenue. But these companies' reliance on pharmaceuticals could shift as current market-leading drugs continue to face declining sales due to competition from generics, and now biosimilars, plus industry pressure to reduce prices and improve R&D productivity. One approach to alleviate that reliance on pharmaceuticals is diversification into non-pharma markets.

Still, many big pharma players have increased efforts on innovative drug development. Pfizer Inc., for instance, has been trying...

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