Did you know five of the 11 largest pharmaceutical companies in the world are US companies? The healthcare and pharmaceutical sector is one of the safest stock market sectors given the recession proof nature of the companies in this industry. Medicines being an essential requirement, economic cycles do not have much effect on this sector. The biggest health companies show a slow and steady growth and are preferred by risk averse investors. Many of these large pharmaceutical giants also give dividend yields making them an ideal investment vehicle for investors looking for a fixed income. In fact, Johnson & Johnson (NYSE:JNJ) has not only given dividends every year for more than 50 years, but also increased its dividend amount every year.
Most of the 11 largest pharmaceutical companies in the world are from the U.S. and Europe given the strong R&D expertise in these countries. Large pharma companies enjoy a strong competitive advantage over new entrants because of the massive R&D expenditure required to develop new drugs. The entry barriers in this industry are extremely high given the high regulatory compliance and long gestation times needed to develop a new medicine. You might also want to take a look at top 10 multinational corporations in the US.
“Big Pharma” as these large drug giants are known have come under criticism for charging excessive prices for drugs which are needed to save human lives. Many patients in Third World and poor countries are unable to afford these cutting edge medicines. Drug companies have responded by saying that they need to earn profits from their products in order to funnel money into their massive R&D budgets. The new US administration under Donald Trump has vowed to reduce the high pricing in this industry as a result of which the whole pharma sector has come under pressure in recent months.
Below we have chalked out a list of the 11 largest pharmaceutical companies in the world based on their reported revenues as listed by Forbes. They use the latest twelve months’ revenue for companies in the U.S., Canada and off-shore and the latest fiscal year’s revenue for international companies.