20 July 2016 - Investors should still be able to count on big pharma’s pricing power.

Drug manufacturers continue to rely on pricing power to help top investor expectations. That may not be as big a short-term problem as some investors fear.

Prices of medicines remain in focus ahead of second-quarter earnings season. The Wall Street Journal reported last week that more than two-thirds of the 20 largest pharmaceutical companies boosted revenues from major products in the first quarter by raising prices. The Bureau of Labor Statistics’ Producer Price Index showed a nearly 6% rise in pharmaceuticals prices from June 2015 through June 2016, well above broader inflation rates. Since prescription drugs generally carry a high gross profit margin, these price raises tend to flow through to the bottom line.

Read Wall Street Journal article