Prescription drugs are big business: almost 50% of people regularly take prescription medication in the US alone, and almost 20% take over five types of them. The world, it seems, is addicted to – entirely legal – pills.
And the pharmaceutical industry is addicted to keeping it that way. With global sales of over $1.2 trillion, companies involved in researching, manufacturing, and distributing drugs can make a very healthy profit. And so can their investors: pharma firms have delivered a 280% return since the US pharmaceutical index was established in 2006, compared to 247% for the wider market. Assuming the population keeps aging in the way it’s expected to, the forecast market growth of 5% a year is likely to boost stocks much more.
But investing in pharma offers more t
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