Pharmaceuticals: Other

The "Pharmaceuticals: Other" industry encompasses companies involved in the broader pharmaceutical landscape beyond major categories like "Biotechnology" or "Major Pharmaceuticals." This includes firms specializing in niche therapeutic areas, CROs/CMOs, drug delivery systems, medical devices, veterinary pharmaceuticals, OTC medicines, and health supplements. These companies contribute significantly to the global health economy, with the overall pharmaceutical industry contributing an estimated $2,295 billion to global GDP in 2022. The sector is characterized by extensive research and development (R&D) activities.

The performance of the "Pharmaceuticals: Other" industry is influenced by technological developments such as AI and ML, advancements in genomic medicine, CRISPR technology, mRNA vaccine technology, and digital health technologies. Demographic shifts, particularly an aging global population, are increasing the demand for medications and healthcare services. Evolving consumer behavior shows a growing demand for personalized medicine and a shift towards direct-to-consumer models. Regulatory changes are constant and impactful, with heightened scrutiny globally. Economic indicators also play a role, and global demand for pharmaceuticals is growing rapidly, with emerging markets expected to gain a larger share of global output and sales.

The "Pharmaceuticals: Other" segment includes generic drug manufacturers, contract manufacturing organizations (CMOs), contract research organizations (CROs), and research and development firms. Business models are evolving from the traditional "blockbuster drug" approach to more integrated models. Companies are increasingly forming partnerships with biotech firms and leveraging outsourcing. Competition is based on innovation and price.

The pharmaceutical industry has experienced significant growth, driven by technological innovation and evolving healthcare demands. The PwC pharma index showed a 13.9% return through November 2024. The industry is increasingly leveraging AI and digitalization. The outlook remains positive, with global pharmaceutical production and sales expected to grow by 3% in 2025. Key trends include the continued dominance of small molecule drugs, increasing adoption of biologics, and a growing demand for personalized medicine. Emerging markets are anticipated to be significant drivers of growth. However, the industry will need to navigate ongoing challenges to sustain this growth.

Investors in the "Pharmaceuticals: Other" industry face regulatory exposure, geopolitical factors impacting intellectual property laws and global supply chains, and economic sensitivity. The industry also faces risks related to bribery and corruption, particularly in high-risk markets. Furthermore, the high costs associated with R&D and the long development and regulatory approval periods for new drugs present inherent financial risks.