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Economic Profitability of the Biopharmaceutical Industry: 2020 update

Richard Manning, PhD, and Saurav Karki, MBA, CFA
May 2020
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This policy brief is an updated look at how the biopharmaceutical industry’s economic value added (EVA) spread compares with that of other industries. Partner Richard Manning and Principal Saurav Karki examine how this industry’s EVA spread has changed since 2018 (see their earlier analysis). This update includes illustrations of trends for EVA spreads for other industries and reviews a measure of economic performance that adjusts for risks borne by investors and the varying capital costs associated with different types of investments across industries.

Dr. Manning and Mr. Karki find that this measure of the biopharmaceutical industry’s economic performance is below the median of all US industries.

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