Profitability of Pharmaceutical Companies in the Visegrad Countries

The pharmaceutical sector is one of the most profitable industries in the world, despite the very high proportion of the required research and development costs that determine the activity itself and the high risks involved in investing in them. In addition to a number of industry-specific characteristics, the innovation policies of each country might also have a significant impact on the efficiency of pharmaceutical companies. The primary aim of the research was to demonstrate this effect in the case of the Visegrad countries. The ROE seemed to best reflect the ownership interests and the combined effect of other profitability ratios and it was confirmed by analysis of variance. The analysis was based on the EMIS corporate database; multivariate statistical methods were applied to demonstrate the reaching of indicator trends, and from among those methods regression analysis was applied in particular. Based on the findings, it was concluded that primarily the more profitable pharmaceutical companies were able to utilize their assets more efficiently, while manufacturers in the latter category financed their operations with external capital to a lower extent. Although the indicators of the analysed companies showed a very high standard deviation in all four countries, the results of the regression were only outstanding in Slovakia, which had a very low number of cases. In addition, temporal tendencies have been almost the same in the entire region, which was also influenced by the fact that return on capital of the business entities within the sector decreased by 2016 throughout the region.