There are a lot of reasons why investors love the pharmaceutical and biotech sectors. The pharmaceutical industry is recession-proof, considering that people need new medicines regardless of what part of the business cycle the economy occupies. It's also a booming industry, as data aggregator IMS Health
According to IMS Health, prescription drug sales in the U.S. jumped 8.3% to $275 billion in 2006. This is nearly two percentage points higher than the current dollar growth of the U.S economy, which expanded 6.4% last year. An even better prognostication by IMS is that the pharmaceutical industry is expected to grow 6% to 9% on a compounded basis until 2011.
This growth in pharmaceutical drug sales occurred even though some of the top-selling drugs -- like Pfizer's
The strength of the pharmaceutical industry is interesting because drug companies that produce branded products aren't the only ones thriving; so are generic drugmakers. Generic drug producers were the big winners of the growing use of pharmacological agents in 2006. Sales of generic products in the U.S. grew 22% in 2006, with patent protection expiring on several top drugs, including Merck's
With the whole drug industry growing so strongly, those looking for a safe place to park their investing dollars would be smart to take a look at some of the largest generic drugmakers, like Teva Pharmaceuticals
Merck is a former Income Investor, and Pfizer is a current Inside Value pick. To take these or any other of our newsletters for a free 30-day trial, click here.
Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.