Between regulatory upheaval, drug pricing measures, an escalating trade war, geopolitical conflict, investor skittishness and more last year, drugmakers have had plenty of reasons to wait for a more secure time to strike a deal. Now, the M&A doors are beginning to crack open as companies better understand the impacts of these headwinds, said Roel van den Akker, U.S. pharma and life science deals leader at PwC.
“People are starting to get their arms around this, which from an M&A perspective is leading us to a spot where we can be more optimistic about 2026,” van den Akker said. “Dealmaking tends to flourish in an environment that has relative predictability and stability.”
And with an unprecedented amount of lost revenue on the horizon as a result of recent and upcoming patent cliffs — $47 billion over the next four years, according to a PwC report — the pressure to pull the trigger has hit a critical juncture for Big Pharma to take more proactive steps.
Potential acquirers will look to “precision-led growth” in 2026, according to the PwC report, valuing useful data over all else to fill specific gaps in the pipeline rather than brute force megadeals. Innovation in areas like cardiometabolic, neuroscience oncology and immunology has been strong, and buyers will likely take advantage of that progress.
While analysts have been calling for a return to form for pharma M&A for years, 2026 feels like crunch time, van den Akker said.
Anxiety drivers
Last year presented pharma leaders with a series of surprises that kept coming, putting a damper on potential deals, said Michael Abrams, managing partner at consulting firm Numerof & Associates.
“I don’t think people appreciate the trauma that executives across the industry experienced in the first half of 2025,” Abrams said. “Every day was another headline that was a shocker, another proposal to rattle them, and if we look at M&A as a measure of the industry itself, it was very, very slow to pick up for the first six months.”
Companies were preoccupied with “reorganizing and re-budgeting for a future that seemed to change every other day,” which is an environment unsuitable for the kinds of long-term decisions needed for large deals, he said.
By the second half of the year, executives started to become more comfortable with the path forward, and deals followed. Deal value reached $50 billion in the third quarter and $57 billion in the fourth quarter, perhaps a sign of more robust M&A on the horizon, van den Akker said.
But instability is still just a headline away, and industry leaders are sensitive to even indirect jaw-droppers like the U.S. incursion in Venezuela, said Abrams.
“Waking up on that Saturday morning awakened that anxiety, and it certainly isn’t an incentive to take any more risks,” Abrams said. “The more aggressive U.S. foreign policy is, the more background anxiety there is for everybody, in or out of the pharma sector, about what comes next.”
Foreign policy decisions also impact U.S. relations with China, which is a source of vulnerability for the U.S. biopharma sector, Abrams said.
“If China cuts off supply, that has some pretty serious implications,” Abrams said.
China has also become a major source of potential M&A. The elephant in the room is the country’s rapid ascent in biotech innovation, and U.S. biopharma is gazing in that direction for deals that will make the most impact in the least amount of time, PwC’s van den Akker said.
“The last couple years of challenges have been more around interest rates, geopolitics, most favored nation talks, etc. — and now it’s a little more about how we can change the setup and the structure of the industry in a way that levels the playing field with what’s happening in China,” van den Akker said.
China’s biotech rise has affected the M&A market with 1 in 3 licensing deals undertaken by U.S. companies coming out of the country, he said. That’s up from near zero just three years ago, he pointed out.
“The landscape of innovation has widened, and there are more highly innovative clusters, the likes of Cambridge or South San Francisco, that exist globally,” van den Akker said. “It’s becoming a bit more of a buyer’s market where people are increasingly selective.”
