In a world dominated by a pandemic, you might wonder how its affecting the 10 biggest pharmaceutical companies in the world in 2020 (click to skip ahead and see the top 3 pharma companies). The pharmaceutical industry is a trillion dollar industry globally, achieving the milestone for the first time in 2014, and the biggest companies are getting a huge piece of the pie.
The pharma industry can vary significantly from country to country, based on the laws regulating it. After all, there is a huge question of balancing the importance of saving lives of people with profits and the money needed for research and development to develop such drugs. This is why many countries across the world regulate the maximum price at which a drug can be sold, to allow the companies high margins and profits, while enabling more people to be able to purchase the drug as well.
Unsurprisingly, the United States is not one of those countries. In the US, there are no regulations on raising prices, which is why you have people like Martin Shkreli, who jacked the price of an important drug by 700% and cause an outrage, even though the outrage was purely on a moral level, as legally, his opponents did not have a leg to stand on. He is the poster boy of Big Pharma, a term coined for the biggest pharmaceutical companies in the US who are said to do anything, even if its immoral or illegal, to fill their coffers rather than actually focus on saving lives. They haven’t paid over $2 billion in taxes in the US, and are able to fill the image of the typical capitalist US company.
While you might think that pharmaceutical companies have profited from the pandemic, that is actually not the case, at least in the short term. Because of lockdowns, supplies have been disrupted, and once any part of the supply chain is compromised, so is the entire operation. On the long term, on the other hand, there might be a lot to gain for these companies as well. These pharma companies are being given billions of dollars already by governments to develop a vaccine for Covid-19. Any company which makes the breakthrough first is looking at a huge windfall, while companies following it will also profit handsomely from the same.
To determine the biggest pharma companies in the world, we considered both their revenues and their net income, the two major metrics to determine the strength of a company. Many websites have got this wrong, for example, you will find that many websites rank Johnson & Johnson as the pharma company with the highest revenue with $82 billion. But Johnson & Johnson is a conglomerate, of which pharmaceuticals is just one segment. Hence, we have considered only its pharma revenue and net income, all of which has been gleaned from the annual reports of each company. They are still not as profitable as the tech industry though, which dominates the 10 most profitable companies in the world. So let’s take a look at the biggest pharma companies likely to grow even more significantly if they develop the vaccine first, starting with number 10: