It's heady times for the drug industry—or at least the US-based large-cap companies. Selling for often record multiples, their stocks seem to be soaring on some kind of super-fuel, providing $30-50 of share price lift for every dollar of earnings in the gas tank.
Industry Outlook 1999/ Pharmaceuticals
Although times are heady for the pharmaceutical industry, Morgan Stanley Dean Witter analyst Paul Brooke doesn't think the boom will continue. Industry growth will be stymied by genericization and the introduction of fewer big new products. At the same time, the industry faces restraints on its pricing flexibility, one of the keys to its recent success.