With the change in life expectancy and demographics, there has been an increase in the expenditure incurred towards healthcare. Healthcare is not only limited to the diseases and vaccinations attached to it but covers a wide scope which includes pharmaceutical companies and other allied infrastructure.
Neil Woodford has stated, “Ageing Demographics are a major driver of the secular growth for pharma and healthcare, more broadly”. Therefore, it is safe to say that growing old is inevitable and so are the demands and needs of medical attention by the aging population. Though an aged public is not a very good sign for the growth of business and economy, this very paradox forms the foundation of the growth of the healthcare industry.
With the rise in health problems, there has been a resultant rise in demand for pharmaceutical drugs and expenses. Every government world-wide makes sufficient provisions in their budget for utilization towards these healthcare expenses, most of which are towards establishments of hospitals and other clinical services. It was Hillary Clinton, who was one of the foremost to take action on the rising drug prices; which in turn has resulted in further growth and competition amongst pharma companies. The growth and technological improvements in this sector have not only improved one’s life expectancy but also made once non-curable diseases curable now. Additionally, government spending matched with incentives often acts as boosters in this industry. It is not concealed that this sector has only recently gained popularity and therefore, most of these healthcare and pharma companies are undervalued. With the numerous advances in technologies by new entrants such as medical robotics, electronic medical records, laboratory science, healthcare instrumentation, medical insurance, data management and many other innovations has made this sector not only attractive due to its feel-good factor and correspondent growth on allied businesses such as insurance but also a good opportunity for investors to earn high revenues.