The pharmaceutical industry discovers, develops, manufactures, and markets medicines. It is one of the most research-intensive sectors in the world, spending tens of billions of dollars a year on R&D. It is also one of the most profitable, though the economics are unusual. Developing a single new drug can cost over a billion dollars and take a decade. Most candidates fail. The few that succeed must generate enough revenue to pay for all the failures, which is why successful drugs are expensive during their patent-protected years.

The industry is global but concentrated. A handful of large companies, often called Big Pharma, dominate sales. They are joined by hundreds of smaller biotech firms, many of which focus on a single drug or technology. Universities and government labs contribute basic research. Contract research organizations run clinical trials. Contract manufacturing organizations produce drugs. The ecosystem is complex, and mergers and acquisitions are common as companies seek to fill their pipelines.

Key segments:

• Research and development. Discovery, preclinical testing, and clinical trials.
• Manufacturing. Production under good manufacturing practice.
• Regulatory affairs. Navigating approval pathways.
• Marketing and sales. Promoting drugs to clinicians and patients.
• Distribution. Wholesalers, pharmacies, and specialty distributors.

The industry faces criticism over pricing, patent tactics, and marketing practices. It also produces vaccines, antibiotics, and treatments that have transformed public health.