Pharmaceutical stocks refer to shares in companies that are involved in the production, development and distribution of medications or drugs. These companies may include research-based pharmaceutical firms, generic drug manufacturers, biotechnology companies, and specialty pharmaceutical companies. Investing in pharmaceutical stocks can provide potential returns for investors as the demand for medications continues to grow with an aging population and advancements in medical research. However, it is essential to note that the performance of pharmaceutical stocks may be influenced by factors such as regulatory approval processes, patent expirations, and competition within the industry.