Despite a declining economy, the pharmaceutical industry is experiencing growth since 2008 in the US and in many other countries. During a recession, it is not uncommon for inferior goods to experience increased demand. What this refers to is an increase in sales of lower quality generic drugs. Also, the recession has hurt the sales of non-essential drugs and supplements such as vitamins, cold and flu remedies, and mineral supplements.
The growth is a cause of several factors independent of the recession. Essentially, despite global reduction of wealth, pharmaceuticals has continued to grow and expand. This year alone, the pharmaceutical industry has risen in terms of annual revenue from 780 Billion to 840 Billion dollars. One of the main driving growth factors is federal involvement with healthcare; countries that don't increase funding for medical assistance run the ethical risk of depriving proper healthcare from sick individuals. A specific example of the government giving strength the the industry can be observed in our own country. The creation of "Obama care" or the project president Obama is attempting in order to offer universal health care is a major growth factor for the pharmaceutical industry because it widens the base of individuals that receive treatment with the use of drugs. Currently, the federal funding for medicaid and medicare makes up for 40% of the US' total federal budget, this increase in federal funding majorly assists the pharmaceutical world. This increase can also be observed as there was a 12% increase of pharmaceutical sales in the US alone, brining it from $810 billion in 2009 to $840 billion in 2010. Overall, research has lead many to believe that the sudden increase in pharmaceuticals is independent of the declining economic climate.
Stephen Kessler
http://apps.who.int/medicinedocs/documents/s17419e/s17419e.pdf
The pharmaceutical industry is very resilient when it comes to economic downturns. People will always need their medications which makes them immune to most financial setbacks that other industries face.In a time when people are trying to cut costs people might try and switch to the generic brand of the drug but never the less the demand fro prescription drugs will not decrease dramatically like the decrease for products in other markets did.
ReplyDeleteI never thought about the fact that as a recession it is a great market for the companies that produce many of the generic products. We should look into how many generic products all of the leading companies produce
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