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Pharmaceutical companies: a reliable investment

Pharmaceutical companies have remained relatively unaffected by the financial crisis. The drugs that generate the biggest profits are not always the first-line option for patients.

Among the securities listed on the stock exchange, those of pharmaceutical companies are considered "defensive", in other words safe investments that are relatively impervious to economic crises.

In 2011, most stock markets went down. But among the world's 12 pharmaceutical firms with the highest turnover, only 2 saw the value of their shares fall.

By the end of 2011, Bristol-Myers Squibb shares were up by 33%, GlaxoSmithKline 19%, Pfizer 24% and Sanofi Aventis 15%.

In 2010, Tahor°/Lipitor° (atorvastatin) was the biggest selling drug globally, with 12.7 billion US dollars in sales worldwide, followed by Plavix° (clopidogrel, 8.8 billion US  dollars), Seretide° (fluticasone + salmeterol,  8.5 billion US  dollars), Inexium° (esomeprazole, 8.4 billion US dollars) and Xeroquel° (quetiapine, 6.8billion US dollars).

These figures confirm that commercial success is not synonymous with benefits for patients, since these are drugs whose contribution is minor or nonexistent compared with the reference drugs in their field. More generally, over the past 30 years, pharmaceutical companies’ profits have risen much more than those of other sectors, in striking disproportion to the decline in real improvements for patients.

Shares in pharmaceutical companies are "safe havens" for investors. It is not a good deal for patients as long as profits remain unconnected to medical advances.

©Prescrire 1 October 2012

"Pharmaceutical companies: safe stock market investments" Prescrire Int 2012; 21 (131): 251. (Pdf, free).

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