- 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.
The “Fundamental Thinking” series presents the perspectives of Harding Loevner’s analysts on a range of investment topics, highlighting our fundamental research and providing insight into how we approach quality growth investing. For more detailed information regarding particular investment strategies, please visit our website, www.hardingloevner.com. Any statements made by employees of Harding Loevner are solely their own and do not necessarily express or relate to the views or opinions of Harding Loevner.
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