Along with the broader economy, the pharmaceuticals industry and exchange traded funds (ETFs) are falling on hard times. Some patients have stopped taking their drugs – even the necessary ones – which could damage the industry if it becomes a big trend.

America has long enjoyed a love affair with the pharmaceuticals industry, thanks to the free market. Drug companies could price their wares more freely than they could in other countries, reports the Economist. But now, the industry’s future might be seen in emerging markets after having resisted for years.

The change of heart came from huge growth in the developing world’s drug markets. One agency forecasts that drug sales in emerging markets will hit $300 billion by 2017, equal to the current sales of the top five European markets and the United States combined.

The industry is also concerned about President-elect Barack Obama, who might allow cheap drugs to be imported from Canada or force Medicare to negotiate big discounts with drug firms. The latter could cut the industry’s American revenues anywhere from 3%-10%.

iShares Dow Jones U.S. Pharmaceuticals (IHE) is down 22.4% year-to-date.

Tags: Emerging Markets, Health Care, IHE, Obama, Pharmaceuticals