Pharma prices will attract US political attention

Subject

An update on the pharmaceutical industry.

Significance

Mergers and acquisition (M&A) activity at pharmaceutical companies continues to occur at a record pace, with transactions focused on the generic and specialty segments. Total activity of more than 220 billion dollars in the first half of 2015 eclipsed 2014's previous record of more than 200 billion dollars. However, the pharmaceutical industry is attracting attention from federal and state government officials for rapidly rising costs of drugs -- which grew by 12.6% in 2014 -- largely due to rising prices for generics and innovative products.

Impacts

• Drug pricing is likely to feature heavily on the 2016 electoral agenda.
• Generic drugs, which account for some 80% of US prescriptions, will remain a major focus of corporate interest.
• Low interest rates will also fuel pharmaceutical M&A.