That’s what a PwC analysis findsat least as far as stock market returns are concerned.
Our PwC Equal-Weighted Index of 50 Pharmaceutical Companies looks at the industry’s total shareholder returns relative to the S&P 500 Equal-Weighted Index. From 2018 through November 2024, the PwC Pharmaceuticals Index returned 7.6%. to shareholders, compared with more than 15% for the S&P 500. Over the past year, this dynamic has become even more pronounced: PwC Pharmaceuticals Index returned 13.9% compared to 28.7%. for the S&P until November 2024.
Not surprisingly, the value growth is highly concentrated in a few companies:
…since 2018, an increasingly limited set of companies has influenced the positive profitability of the pharmaceutical sector. Within the S&P 500, the so-called “Magnificent 7” accounted for 40% of the increase in value since 2018. In the pharmaceutical industry, this dynamic is even more marked with only two [leading GLP-1 manufacturers]…accounting for almost 60% of the increase in value growth among the 50 pharmaceutical companies analyzed by PwC.
With the advent of the IRA and increasing pressure on price negotiation in many countries, will investors continue to fund life sciences innovators? Let me know your thoughts.
