FTI Consulting was recently invited to speak on a healthcare M&A panel that explored challenges facing pharma in 2016. The panel was sponsored by Mergermarket, Biopharm Insight and Citrix.
Several pharma companies have suffered in 2016 as disputes with pharmacy benefit managers and health insurers – as well as public backlash – over drug prices have hit balance sheets. While most attention has been focused on Valeant, which has seen its share price plummet by 58% in less than a month, other companies including Endo and Mallinckrodt have had trouble, with the former facing an FTC lawsuit for blocking lower-cost versions of branded drugs.
With all this trouble, this has led to speculation that a raft of pharma consolidation can be expected this year as companies look to cut costs. Will this be the case? How can pharma companies deal with pressure from PBMs, insurers and the public?
What effect are the increasing powers of pharmacy benefit managers, health insurers and retail chains having on the pharma industry?
How much has the ‘price gouging’ uproar among politicians and the public hurt pharma companies, and how can they rebound?
In such a tumultuous time, how can the industry keep ahead when it comes to R&D? Should they keep spending or focus on acquisitions of smaller drug developers?
Are inversions dead? What other options are there for pharma companies looking to do transformative, cost-saving acquisitions?
Is the financing market still receptive for pharma takeovers, even in high-yield?