A Bitter Pill: Why Big Pharma’s Era of Big Profits May Be Expiring

Pharmaceutical companies, pressured by buyers to lower drug prices, find their high profit margins threatened.

Key Takeaways


  • Governments and health insurers—the chief buyers of pharmaceuticals—are increasingly exercising their bargaining power to reduce prescription drug prices.
  • Facing tougher buyers, drug makers are seeing their profit margins squeezed.
  • In this environment, the companies that stand the best chance of sustaining high profitability are those with a pipeline of innovative research ideas.
  • Pharmaceutical companies may be able to outmuscle buyers in negotiating the price of a new drug when the current version of that drug dominates its therapeutic space in the market.



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