Much like the other big trends impacting biopharma today, the outlook for M&A is firmly tied to the fluid—and uncertain—policy-driven dynamics encompassing all layers of healthcare at the moment.

In respect to dealmaking, that includes, for example, imposed US tariffs on foreign drug imports, combined with the volatile macro geopolitical climate, which are influencing cross-border strategies in countries such as China. Or, separately, the very real threat of US administration rule changes to traditional product marketing tactics and channels that, theoretically, experts say, could free up money in pharma budgets to invest in things like M&A.

“All that pricing pressure, regulation, tariffs, etc., now that everybody's done absorbing it, it just kind of sits there in the back of your mind and makes you second guess all the decisions that you're making," Michael Abrams, managing partner at Numerof & Associates, a strategy consulting firm, tells Pharmaceutical Executive. "There's a lot in motion. [But] it could be a good thing. The challenge for these big companies will be to come up with the will to change the way they work. I think a lot of that has just been frozen in place for a long time."

Steady and selective

The constraints, as Abrams alludes, could, in some ways, be a positive for M&A, he believes, as “that keeps the industry from going overboard on itself." After a quiet 2024, he points to a steady return of pharma M&A this year. A key driver, Abrams notes, has been the strategic repositioning of portfolios by Big Pharma, with buyers prioritizing assets that fill pipeline gaps or add adjacent commercial revenue streams across emerging or hot therapeutic modalities (i.e., oncology/precision medicine, obesity/metabolic disease, cardiovascular, renal disease, and CNS).

And with small- and mid-cap biotech valuations still under pressure today, plenty of buying opportunities remain for pharma.

All in all, amid the broader regulatory picture and related risk-management concerns, buyers are “somewhat conservative," Abrams says, favoring those deals that feature late-stage clinically proven, or derisked, assets—"and they're willing to pay higher prices for the right property."

Nevertheless, while such "bolt-on" and strategic M&A/licensing arrangements have dominated approaches of late, keeping volume steady (PwC reports that 2026 will see a continued shift to asset-focused deals in the $1 billion to $5 billion range), mega mergers remain a core focus, particularly with multiple patent cliffs looming.

Recent evidence of a rebound in larger-value deals includes Johnson & Johnson's buyout of Intra-Cellular Therapies for $14.6 billion; Novartis' acquisition of Avidity Biosciences for $12 billion; Pfizer's purchase of Metsera for $10 billion; and, on the diagnostics front, Abbott's acquisition of Exact Sciences for about $21 billion.

Other mega deals this year included Merck & Co.'s $10 billion buyout of Verona Pharma, Sanofi's purchase of Blueprint Medicines for $9.5 billion, and Genmab's acquisition of Merus for $8 billion.

On the whole, according to GlobalData, the deal value from pharma M&A jumped 36.7% in the third quarter of 2025. PwC, in its own findings, cites artificial intelligence (AI) as the single most important catalyst for growth in mega deals (about one quarter of the deals had an AI theme). PwC also credits private equity exits for fueling the surge in large deals.

“There's general buoyancy around doing deals, but with more rigor," says Bill Holodnak, co-founder and CEO of Occam Global, also interviewed by Pharm Exec. “Clinical results have always mattered, but tying payouts explicitly to those results is becoming more common. Milestone-weighted structures are now more the standard than the exception. In many larger deals, only a portion of the total value is paid upfront, with most of the money tied to future development, regulatory, and commercial milestones. ... In 2025, you started to see more of those contingent features being built into larger M&A deals."

Succession plans

Such structures will likely reflect further in the near-term pursuits of innovator pharma companies, who, facing major patent cliffs in 2028 and 2030, are tasked with offsetting future sales losses. Cumulative losses are forecast to eclipse $300 billion, with more than 200 drugs set to lose patent protection, including at least 69 blockbuster products.

Reformulations, line extensions, next-generation versions, patent thickets centered around delivery devices or manufacturing processes remain standard and viable options to plug revenue holes.

But, as R&D and market analysts are apt to point out, emerging biopharma companies, collectively, have more novel and advanced therapies in development today than those originated by Big Pharma. Thus, replenishing pipelines via M&A and in-licensing will remain an enduring and integral strategy, as "smaller companies remain more creative, flexible, and improvisatory—traits large pharma cannot replicate internally," says Holodnak.

Meanwhile, Holodnak advises that buyers “don’t over-commit to the fashion of the moment," but rather, “stay focused on the value of the underlying assets," citing the GLP-1 obesity space as an example.

Abrams echoes the sentiment, pointing to organizations doing "their homework in terms of collecting real-world data and the ammunition to build a compelling evidence case." A task that could be more crucial if, as mentioned, US reforms to marketing rules, such as direct-to-consumer advertising, or new models for drug pricing, eventually reshuffle pharma budgets.

“This is a big part of what puts the emphasis on buying assets that come with the right data, the right evidence, that come with differentiation, and that are well-built, if you will," says Abrams.