OBJECTIVES: To examine the impact of stock market crashes on domestically-listed pharmaceutical company security prices. METHODS: An event study methodology was employed to assess the monthly abnormal returns of firms with historical standard industrial classifications of 2834 (pharmaceutical preparations) during major stock market crashes from 1929 to 2006. Financial returns were modeled via a single index market model and the Patell standardized residual test was used to assess statistical significance. An estimation period was defined as (-45, -6) months and various event windows between months (-5,+5) were tested relative to the event month of the market crash. Aggregate results were presented as cumulative average abnormal returns (CAAR). RESULTS: Overall, 10 market crashes were identified between 1929 and 2006 wherein marketwide value decreases equaled or exceeded 20%. Within the pharmaceutical sector during the (-5,+5) event window, 5 crashes were associated with significantly lower returns than the overall market (1929, 1962, 1970, 1973, 1987) [CAAR = -18.31%, p <0.05], 4 were associated with statistically similar returns (1937, 1940, 1946, 2000) [CAAR = -6.80%, p = NS], and 1 noted statistically higher returns (1990) [CAAR = +3.98%, p <0.05]. CONCLUSION: This econometric analysis of the financial markets indicates that the pharmaceutical sector has historically performed equal to or below the overall market in the months surrounding and including stock market crashes. The implications of this research suggest that security market assets of drug companies do not offer improved performance during these times of market instability.