ETFs for a Changing Pharma Landscape

August 5th at 2:00pm by Tom Lydon

Big pharma companies are looking at a changing landscape, not least of which is the fact that many blockbuster drugs are about to lose their patents, opening the doors for generic players. The increased competition may be a boon to pharma exchange traded funds (ETFs).

Executives at big pharmaceutical companies are not sitting idle. They’re hard at work, partnering with companies to come up with the latest and greatest as the patents on more popular drugs near expiration. Marc Litchfield for Investment U reports that many pharmaceutical companies and biotech companies are cheap right now, so buying opportunities may present themselves as the industry shifts. [Health Care Reform ETF Winners and Losers.]

The next major player in the industry could be an unexpected one: India.

The Indian pharma sector is on the threshold of becoming a major player in global pharmaceutical industry. It’s already viewed as a flagship industry in the country, and it’s one of the largest suppliers to several countries, including Ukraine, Belarus and Moldova, Hindustan Times reports. [Will Bulls Pull Through for Pharma ETFs?]

The bottom line is as business pressures mount, pharma keeps getting cheaper, creating a buying opportunity…eventually. There are several factors pressuring the sector right now, including the aforementioned patent expirations, U.S. health care reform and European austerity measures, reports The Motley Fool.

If you’re interested in pharmaceuticals and want to get in when they’ve crossed their long-term trend lines, consider signing up for alerts so you’ll be notified when it happens!

For more stories about pharma, visit our pharma category. The three focused pharmaceutical ETFs are:

  • iShares Dow Jones U.S. Pharmaceuticals (NYSEArca: IHE)
  • PowerShares Dynamic Pharmaceuticals (NYSEArca: PJP)
  • SPDR S&P Pharmaceuticals (NYSEArca: XPH)

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.