40 | Page
Merger and Acquisition in Healthcare (Pharma) Industry By: Somak Chakrabarti (Manipal College of Pharmaceutical Sciences, Manipal)
Abstract Equity investment in the pharmaceutical and healthcare industry has grown exponentially over the last two decades. Since 2010, the value of M&A deals has amounted to over $750 billion. This rate is expected to increase further since the pandemic has necessitated the consolidation of resources to combat it. However, information on M&A deals in the post-pandemic era is limited. The primary goal of this study is to assess the rate of growth in mergers in post covid era and compare it to the previous years. The aim is to assess the impact of covid-19 on M&A in healthcare. The study employs secondary sources in its research. The data was sourced from the internet and a primary analysis was conducted. There was a dramatic rise in the number of mergers and deals in the healthcare and pharmaceutical industry. This explosive growth in the industry has been attributed to increased spending in the markets for pharma. Given the longevity of the pandemic, M&A patterns have seen sharp increases, especially in the pharmaceutical sector as many players sort to outsource some of their activities to smaller companies.
Introduction The Covid-19 pandemic has had divergent effects on the consolidation activity of the healthcare industry. It has accelerated and decelerated its process with varying levels of change. However, it is important to note that the onset of the pandemic serves as a mere disturbance to a phenomenon that has been occurring for almost two decades (Scheffler and Alexander, 2021, p. 1). In the United States, the hospital industry has been consolidating the healthcare market since 2010. Multiple studies have attempted to evaluate how this consolidation affects the quality of healthcare provided to patients. Conceptually, it is expected that any mergers and acquisition is attempted at bolstering service provision (Numerof, 2020, p. 3; Su, 2017, p. 7; Postma and Roos, 2015, p. 3; Fitzpatrick, 2019, p. 3; Cerezo-Espinosa de Los Monteros et al., 2021, p. 2). However, as the studies suggest, the impacts are varied depending on the type of merger or acquisitions drafted. The following paper will present a case for mergers and acquisitions in healthcare before and after the Covid-19 pandemic.
