Just deal in drugs and make heavy profits the reason is quite simple the profit margins are very high. It happens because most of the drugs start their pricing in a monopoly market. After the fixation of this price when the same drug reaches in the domain of becoming a generic drug then the things changes. This time the generic makers also follow the same pricing patterns. However, the manufacturing cost of the drugs goes down. When we have a look at the past patterns of the industry then we find that most of the popular drugs have their roots in the first world countries and now third world countries are minting gold with the help of the same drugs.
When we have a look at the landscape of the drug manufacturing companies then the most prominent name that comes in our mind is of China. Here we can also describe a business model which is associated with it. China has the capacity to produce the raw materials connected to the drug makers. Over the years they build their capacities and started producing the final goods as well. Later on once the patent for the drugs got over they started manufacturing the drugs, pills and other medicines on their own.
Right now we can divide the drug based market of the world into two major segments. The first segment belongs to the authentic drug makers and the second segment belongs to the generic drug makers. The price of any given drug passes through two phases, during the first phase authentic drug makers decides the price of the drug and later on generic drug makers take the charge. While making an investment an investor should check the profile of the company on the merits of the number of the authentic drugs that it is making.