The global pharmaceutical stocks were leaders in the last cycle of emerging market growth, in the mid-1990s. They were beaten down low because of the Clintons' abortive attempts at health care reform. That gave us a great entry point. Now, pharmaceutical stocks are once again depressed by new government attempts at reducing the cost of prescription and non-prescription drugs. The stocks are not as depressed as in 1994, but they have been under pressure for two years.
Pharmaceutical companies are prime beneficiaries of growth, especially in emerging economies.
Growth lifts people's incomes and makes pharmaceuticals affordable. People everywhere want to feel better. Growth, therefore, increases markets for pharmaceutical companies. This means that the emerging economies' growth comes at just the right time for the pharmaceutical companies. Growing sales in emerging markets will more than offset any pricing pressures in the United States and Europe.