American Industry Overview: Pharmaceutical Preparations
This industry includes establishments primarily engaged in manufacturing, fabricating, or processing drugs in pharmaceutical preparations for human or veterinary use. The greater part of the products of these establishments are finished in the form intended for final consumption, such as ampoules, tablets, capsules, vials, ointments, medicinal powders, solutions, and suspensions. Products of this industry consist of two important lines: pharmaceutical preparations promoted primarily to the dental, medical, or veterinary profession, and pharmaceutical preparations promoted primarily to the public.
Since World War II, when the U.S. drug industry was established on a permanent footing, pharmaceutical firms have enjoyed a high level of profitability. The discovery and development of dozens of life-saving medications in company research laboratories created enormous demand for pharmaceuticals, while patent protection and sophisticated marketing structures maintained sales and profits. However, the high cost of drug development and marketing tended to concentrate industry earnings in several large firms. Even with strict regulatory oversight and periodic crises, such as the Thalidomide scare of 1962, the U.S. pharmaceutical industry, or at least its major players, managed to remain both profitable and beneficial to world health while avoiding the price controls common in other industrialized nations.