Investopedia: 2011 In Review - Pharmaceuticals

When considering the performance of the pharmaceuticals sector, an investor is almost always challenged with the question of definitions. Simply put, what exactly is a pharmaceutical company and where are the lines between "biotech," "specialty pharmaceutical," "generic," and regular ol' pharmaceutical companies? (For related reading, see Evaluating Pharmaceutical Companies.)

Leaving aside the issue of nomenclature, and acknowledging that there is some subjectivity involved in who is included or left out, this was actually a fairly strong year for the sector. True, fewer people are seeing the doctor, high unemployment means fewer people on insurance rolls, and overall health care spending has not been very strong. Nevertheless, the market has warmed to these stocks, as the iShares Dow Jones U.S. Pharmaceuticals ETF (ARCA:IHE) has handily beaten the market this year and risen by a solid mid-teens percentage.

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