Definition of IndustryAccording to the Encyclopedia of Global Industries, the pharmaceutical preparation manufacturing industry can be defined as an industry that produces products or means for human and veterinary treatment. There are two main product segments in the pharmaceutical industry: pharmaceutical preparations and therapeutics. Pharmaceutical preparations include prescription or “ethical” drugs, products intended for the dental, medical or veterinary professions, as well as “over-the-counter” drugs sold to the general public. The Encyclopedia of Global Industries also includes “therapies derived from genetic engineering or related biotechnological processes,” within the pharmaceutical industry (drug products). The geographic focus of our report will be primarily on the pharmaceutical industry in the United States. Industry Performance In this section we will touch on different aspects of financial performance within the pharmaceutical industry and companies in this sector. There will be a graphic representation accompanied by the interpretation of the graphs. The graphs will be analyzed further in the STEP Analysis section. Within Figure 1 you can see an upward trend in pharmaceutical industry stocks. Even if you notice small dips here and there, it can generally be assumed that investor optimism in the pharmaceutical sector is healthy. Figure 1, S&P 500 Pharmaceutical Stock Index To demonstrate that similar upward trends exist across different markets, Figure 2 compilation/comparison of the Pharmaceutical Stock Index across different markets. Figure 2, Pharmaceutical Stock Index (Market Comparisons) Figure 3, Total Industry S...... middle of paper ......t is also likely that the Pharmaceutical Stock Index industry will experience a large shift towards direct sales to patients. This will largely depend on the need to reduce costs due to the reduced profit margins with generic drugs, as explained above. Key Success Factors The key success factors in the pharmaceutical preparation manufacturing industry are based on the strong focus on research and development in developing new drugs, obtaining patents for these drugs, and then sales with high profit margins to cover the costs of patented drugs. In the future of the pharmaceutical manufacturing industry, success will depend on the ability to produce affordable products while keeping costs low throughout the entire supply chain. Key drivers will include responsive supply chains, the shift to direct sales, a focus on cost-driven sales, as well as influencing e-commerce.