Although the ongoing COVID-19 pandemic has significantly impacted several sectors across the world, it comes as a silver lining for the pandemic pharmaceutical sector. In the last few months, Pharma companies across the world have had a good run across the world. It has managed to become the most preferred stock amongst various portfolio managers, as stock markets recording all-time high across almost all nations. This growth may seem overhyped to a lot of people due to the covid scenario, but experts beg to differ. According to them, pharma is finally representing its genuine valuation in the market.
However, here comes a question, how can an essential sector like pharma be undervalued for such a long time? Well, a short answer here would be stringent regulatory norms. To simply put, it was challenging for pharmaceutical companies to cope up with the regulatory standards. For the past decade, these pharmaceuticals have found themselves under heavy scrutiny from agencies like the U.S FDA, with some even receiving frequent warning letters every now and then.
But with the pandemic in full throttle, the businesses seem to have returned in huge lots as regulators decide to levy numerous rules. This has encouraged U.S enterprises to partner with manufacturers worldwide to tap major market share during these challenging times.
Optimism in pharma is at an all-time high. We can see the evidence of this in global stock markets. However, experts are still uncertain about their long-term trajectory. A crucial element that concerns the future of this sector is the FDA’s stance after the lockdown ends. If regulations go back to remain stringent for companies then the businesses are surely expected to slowly evaporate as earlier.