Long Term Investing In Pharmaceuticals

Long Term Investing In Pharmaceuticals By ProfitableInvestingTips.com Long term investing in the pharmaceutical industry has generally led to excellent returns. The standard advice over the years has been to buy “big pharma” and watch your shares rise in value while you collect dividends. In the last twenty or more years the number of new technologies being applied to treatments has grown exponentially. A question for long term investing is whether investment in one of the larger companies is your best bet or if a little homework and investment timing will allow you to take part in the early growth of new companies associated with new technologies. Long Term “Buy and Hold” Investing in Pharmaceuticals The names may change with mergers and acquisitions but the basic nature of the game in big pharmaceuticals stays the same. A company develops a medicine and then holds the patent for a few years while it recoups its investment costs and takes a healthy profit. Typically the Mercks, Lillys, and Glaxos of the world will find a variation on a current medication and develop that variation in order to extend their patent rights and profitability. Because of competition from generic drug makers when a drug goes off patent the major pharmaceutical companies need to be active in research or acquisitions in order to have a stable of profitable drugs to sell. “Buy and hold” long term investing in pharmaceuticals presupposes that the big pharmaceutical company will keep replenishing …