Pricing and Competition Regulatory Attempts Chill Mergers and Acquisitions in Pharma

As nations and their regulatory bodies dial up the pressure on drug pricing, pharmaceutical companies have become uneasy regarding mergers and acquisitions (M&As). Although drug pricing efforts have met with middling success, a new wave of antitrust actions has thrown a wrench in M&A prospects, which are often used by pharma and biotech companies to draw in early investments.

According to Jamie Smyth of Financial Times, “This shift in emphasis by regulators, towards promoting more competition and restraining price increases, has caused many analysts to predict that the era of pharma megadeals — such as Bristol-Myers Squibb’s $74bn acquisition of Celgene in 2019 — may be over.”

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(Source: Financial Times, February 27^th, 2022)