Healthcare is in the middle of a buying spree, and the firms that track it say it is far from over.
The numbers
M&A — mergers and acquisitions, where one company buys or combines with another — has come roaring back in healthcare this year. Pharmaceutical and biotech companies have already spent more on big acquisitions in the first half of 2026 than in all of 2025: roughly $134 billion across more than 30 deals of $1 billion or more, STAT News reported. Counting all biotech transactions, dealmaking reached about $106 billion across some 200 deals by early June, putting the sector on pace for its strongest year since before the pandemic, according to CNBC, citing PitchBook data.
In its 2026 mid-year outlook, PwC counted six "megadeals" — transactions above $5 billion — in just the first five months of the year, and said it expects momentum to build through the second half.
Why it's happening
The biggest driver is the looming patent cliff. PwC estimates more than $300 billion in branded drug revenue will lose patent protection this decade, exposing those medicines to cheaper competition. To replace that revenue, large drugmakers are buying smaller companies with promising pipelines rather than waiting years to develop drugs in-house.
Eli Lilly, flush with cash from its blockbuster obesity and diabetes drugs, has been the most aggressive buyer, spending billions across multiple acquisitions this year. Other large deals have spanned oncology and beyond — GSK's roughly $10.6 billion agreement to buy cancer-drug maker Nuvalent among them. PwC says buyers are concentrating on oncology, immunology, cardiometabolic disease and newer technologies like RNA therapeutics and gene editing — areas where differentiated science can justify premium prices.
Two other forces help: financing costs have eased from their 2023–24 peaks, making leveraged deals cheaper, and private-equity firms are increasingly active in life-sciences carve-outs. Medical-device dealmaking is also strong, following a decade-high 2025.
The caveat on AI
One notable shift, per PwC: in health services — hospitals, clinics and care providers — buyers will no longer pay a premium for AI that is merely promised. They now want demonstrated, measurable savings or better patient access before paying up, a sign the market is maturing past the hype stage.
What it means
For the sector, the wave is reshaping the competitive map: big pharma is absorbing mid-cap biotechs before they can scale alone, and device giants are bolting on adjacent technologies. For investors, PwC's bullish second-half call — backed by a pipeline of deals still being prepared — suggests the record pace has further to run, with tariffs and supply-chain disruption the main risks that could cool it. As always with M&A outlooks, this is a forecast, not a certainty; deals can stall on financing, regulatory review or a turn in markets. But the direction, on the evidence so far this year, is unmistakably toward more consolidation.
