Healthcare M&A 2024

The new Healthcare M&A 2024 guide covers over a dozen key jurisdictions. The guide provides the latest legal information on market trends; establishing healthcare start-ups, including early-stage financing and venture capital; IPOs and private sales; spin-offs; acquisition of listed companies, including stakebuilding, documentation, squeeze-out mechanisms, certain funds requirements and deal protection measures; regulatory requirements, including antitrust, foreign investment review and data privacy concerns; disclosure obligations; and duties of directors.

Last Updated: May 29, 2024

Compare law and practice by selecting locations and topic(s)

Select Locations

Select Topic(s)


Please select at least one location and one topic to use the compare functionality.



Sullivan & Cromwell LLP (S&C) provides the highest quality legal advice and representation to clients around the world. S&C’s record of success and unparalleled client service has set it apart for more than 140 years and made the firm a model for the modern practice of law. Today, it is a leader in each of its core practice areas and in each of its geographic markets. S&C advises a diverse range of clients on corporate transactions, litigation and estate planning matters. It comprises more than 900 lawyers, who conduct a seamless, global practice through a network of 13 offices, located in Asia, Australia, Europe and the United States. S&C is a perennial leader in M&A, having advised on some of the world’s largest and most noteworthy cross-border and domestic M&A transactions. S&C has acted in approximately USD5 trillion in M&A transactions over the past ten years.


Despite decade-low activity for global M&A, driven by recession threats, steep interest rate hikes, geopolitical tensions and market uncertainty, the healthcare industry stood out as one of the key sectors driving M&A in 2023. The volume of healthcare M&A deals was up slightly year over year and a variety of mega-deals contributed to increasing overall deal value to USD369 billion globally in 2023, up 8% from the prior year.

Certain trends we saw in healthcare M&A in 2023 are also expected to continue influencing M&A activity in 2024. This includes financial distress driving healthcare service consolidation; however, there is some evidence that the large deal sizes seen in 2023 may be slowing down. Emerging trends are also expected to support greater deal making in 2024, including stabilising rates, expiring patents, record levels of dry powder, Medicare fee shifts and increasing attention on innovative products. On the other hand, increased regulatory scrutiny is expected to dampen deal activity.

Healthcare M&A in 2024 is already off to a robust start, with numerous deals announced, particularly in the biologics space, including Novo Holdings’ acquisition of Catalent (USD16.5 billion), Johnson & Johnson’s acquisitions of Shockwave Medical (USD13.1 billion) and Ambrx (USD2 billion) and GSK’s acquisition of Aiolos Bio (USD1.4 billion). Though healthcare M&A deal value is down roughly 13% from the first quarter of 2023, the results shift after adjusting for Pfizer’s astronomical USD43 billion acquisition of Seagen in the first quarter of 2023.

Healthcare M&A Activity Trends in 2023

Mega deals

Unlike other industries, overall healthcare M&A saw deal value increase by approximately 8% in 2023. This trend was primarily driven by a handful of mega-deals across the industry (defined as transactions with a value in excess of USD10 billion), particularly in the pharma and biotech spaces.

In particular, Pfizer’s USD43 billion acquisition of Seagen was by far the largest healthcare deal of the year and the third largest deal of 2023 overall, behind only Exxon Mobil’s acquisition of Pioneer Natural Resources (USD65 billion) and Chevron’s acquisition of Hess (USD60 billion). Other notable transactions included Johnson & Johnson’s spin-off of its consumer health business, Kenvue (valued at over USD40 billion), Merck’s acquisition of Prometheus Biosciences (USD10.8 billion) and the closing of Amgen’s acquisition of Horizon Therapeutics after clearing regulatory approvals (USD27.8 billion). Towards the end of the year, each of AbbVie and Bristol Meyers Squibb signed two major acquisitions. AbbVie agreed to acquire both ImmunoGen (USD10.1 billion) and Cerevel Therapeutics (USD8.7 billion) and Bristol Meyers Squibb agreed to acquire both Karuna Therapeutics (USD14 billion) and RayzeBio (USD4.1 billion).

In the Medtech space, a large number of scope deals were observed, with companies vying to buy assets that would help them access disruptive technologies or fill gaps in their portfolios. Abbott’s acquisition of Cardiovascular Systems (USD890 million) was one such example.

In contrast, deal activity in the payer, provider and healthcare services industries remained relatively low and focused mainly on consolidation. A few of the notable deals here included CVS’s purchase of Oak Street Health’s network of primary care centres (USD10.6 billion) and UnitedHealth’s Optum division’s acquisition of Amedisys (USD3.3 billion).

Financial distress driving healthcare services consolidation

According to a year-end deal-making review from Kaufman Hall, financial distress was cited as a contributing factor for 28% of hospital M&A deals in 2023, compared to only 15% of such deals in 2022. This is largely due to smaller organisations who lacked the balance sheet strength to weather the operational headwinds experienced in recent years. Moreover, many healthcare service providers delayed deal making through the pandemic, with health systems more occupied with confronting the crisis than planning long-term strategy.

Further, net margins in 2023 hovered around only 2.0% (well below the 3.0%–4.0% range frequently cited as a sustainable break-even range). Accordingly, organisations sought to identify partners that could provide necessary resources and scale to keep them viable.

Similar financial and operating pressures that affected smaller providers also influenced many regional health systems to reorganise. Some systems merged in order to generate economies of scale while others divested or acquired regional assets to restructure their portfolios and allocate resources in markets where they could be most efficiently deployed to support growth or reel in operating expenses. Notable examples in 2023 included the completion of VillageMD’s acquisition of Summit Health-CityMD in the Northeast and Oregon, the combination of Froedtert Health and ThedaCare in eastern Wisconsin and the combination of BJC Healthcare and St Luke’s Health System in the Missouri/Kansas region.

Factors in Favour of Healthcare M&A in 2024

Economic recovery

Recent improvements in economic outlook, and in the financial markets in particular, underscore a general expectation that healthcare M&A will increase in 2024. The dramatic interest rate hikes of the past couple of years seem to have ended for most major economies, with interest rate cuts expected later in 2024. The lower cost of capital is expected to drive increased M&A activity generally, increasing the likelihood of healthcare deal activity.

The 2024 Lazard Healthcare Service Leaders Study found that healthcare services leaders are optimistic about the availability of capital, with 53% of respondents expecting greater availability of private and growth equity and debt financings in the first half of 2024, a markedly more positive outlook than responses to the same question in 2023. Notably, investors had an even more positive outlook than industry leaders, with 71% anticipating more private and growth equity availability and 69% expecting more debt financing availability.

“Patent cliff”

Another major factor expected to drive M&A in 2024 is the much-anticipated “patent cliff”, in which patents on a significant slate of blockbuster drugs are set to expire between 2025 and 2030. It is estimated that the upcoming expiries are set to jeopardise over USD200 billion in annual revenue for drug makers. Key drugs, including AbbVie’s anti-inflammatory treatment, Humira, Merck’s cancer medicine, Keytruda, Bristol Myers Squibb’s immunotherapy, Opdivo, Johnson & Johnson’s immune disease medicine, Stelara and Regeneron’s eye treatment, Eylea, will all lose patent protection by the end of the decade.

To counteract expected losses in revenue, pharma and biotech companies will need to manage new product launches by investing in research and development or acquiring companies with promising product pipelines. The last major patent cliff at the turn of the last decade was followed by a major wave of M&A for this very reason. As R&D productivity and R&D returns have reportedly both declined at the large drug makers, such companies are likely to increasingly rely on acquisitions to replace lost revenues.

Notwithstanding historical trends, many analysts are predicting that the upcoming patent cliff might not be as seismic as in the past. This is in large part because many of the expiring patents are biologic products, manufactured from living cells rather than chemical pills. Biosimilar substitutes for biologics are more expensive to develop than traditional generics and may be more difficult to persuade physicians to prescribe. As more biologics lose patent protection, industry participants are closely tracking the associated revenue losses and drawing insights that may guide the industry’s product strategy over the next few decades. In any case, revenue losses due to the upcoming patent cliff are inevitable and its impacts will be felt by all major drug makers, spurring material M&A activity.

Medicare fee shifts

Low margins drove a significant amount of healthcare service consolidation in 2023 and there is reason to expect that this trend will continue into 2024. Medicare physician fees in 2024 were cut by approximately 1.7% on top of the 2% cut in 2023, which is likely to continue stimulating further consolidation. In contrast, hospital outpatient and ambulatory surgical centre fees are rising in 2024, which may spur private equity interest in those subsectors.

It is also believed that healthcare payers with the largest scale will be best positioned to turn a profit in the Medicare Advantage space, where more than half of Medicare recipients are now enrolled.

Availability of capital among healthcare companies and private equity firms

Another reason healthcare M&A is expected to rise in 2024 is because healthcare companies and private equity firms are both incredibly well poised to invest. It is reported that the top 18 pharmaceutical companies have over USD500 billion of combined firepower (defined as the amount of debt a company can take on to arrive at a ratio of net-debt to EBITDA of three times). Some companies such as AZ and Takeda have even been willing to stretch their firepower further than more conservative players like Johnson & Johnson and Roche. If the top 18 pharma companies stretched their firepower to a ratio of debt-to-equity of five times, the top 18 pharma companies would have USD1.1 trillion of firepower available to invest.

Simultaneously, equity commitments available for investment by private equity firms globally (dry powder) reached a record high of USD2.59 trillion in December 2023, up approximately 32% during the year and 60% compared to the end of 2021.

The availability of capital to both strategic investors and private equity firms is expected to facilitate deal activity and incentivise investments.

A significant number of healthcare companies have also engaged in divestitures in recent years, freeing up capital to invest in other core strategic areas. Most notably, Johnson & Johnson’s spin-off of its consumer health business, Kenvue in 2023 generated cash proceeds of USD13.2 billion for the company, facilitating its acquisitions of Shockwave Medical (USD13.1 billion) and Ambrx (USD2 billion) in 2024. Other companies including Merck, Bristol-Myers Squibb, GSK and Novartis have also made large acquisitions following the divestitures of their consumer groups.

Product innovation

Novel and emerging technologies are also expected to drive acquisitions in 2024. In particular, the surge of telehealth platforms during the pandemic, the rise of AI and the emergence of GLP-1 drugs to treat obesity are being closely watched by healthcare companies who are eyeing strategic investments in these spaces.

It is expected that AI will have profound impacts across healthcare industries, particularly in early-stage drug development. It is believed that the potential benefits of AI in this area will help researchers understand diseases better, discover drugs faster and improve the design and testing of novel products. Accordingly, pharma and biotech companies, facing increasingly inefficient R&D pipelines, are likely to start using M&A to access capabilities in this space. Consumer health providers are also exploring AI use-cases to facilitate triage, diagnosis and monitoring, thus improving the speed, efficiency and costs of delivering patient care.

Another trend likely to drive M&A activity in 2024 is continued investment in GLP-1 drugs and other treatments for obesity, following the blockbuster success of drugs like Novo Nordisk’s Ozempic and Wegovy and Eli Lilly’s Mounjaro and Zepbound. For example, Roche, which historically focused its R&D efforts on cancer research, diagnostics and gene therapies, acquired Carmot Therapeutics (USD2.7 billion) in December 2023, adding three clinical stage obesity programmes to its portfolio. Some analysts have suggested this might signal a trend of major pharma companies trying to enter the GLP-1 space through M&A.

Headwinds for Healthcare M&A in 2024

Favourable trends, including those described above, are expected to support healthcare M&A activity through 2024, although it will continue to face headwinds – principal among them, regulatory scrutiny. Additional headwinds for healthcare M&A in 2024 include:

  • low overall economic growth;
  • geopolitical tensions contributing to uncertainty; and
  • consolidation among healthcare companies reducing the number and quality of possible M&A targets.

Regulatory scrutiny

Increased regulatory scrutiny, especially by the US Federal Trade Commission (FTC), has become one of the most significant headwinds for healthcare M&A activity. This trend has been fuelled by various factors, including concerns over market consolidation, rising healthcare costs and potentially anti-competitive behaviour. In recent years, regulatory agencies including the FTC, Department of Justice (DOJ) and Department of Health and Human Services (HHS) have intensified their focus on scrutinising healthcare M&A transactions to ensure they do not harm competition or negatively impact consumers.

As part of this regulatory drive, the FTC, DOJ and HHS have collaboratively embarked on initiatives to bolster scrutiny of healthcare M&A transactions, aiming to facilitate more thorough examinations of potentially anti-competitive transactions within the healthcare sector. In March 2024, the agencies announced a specific emphasis on scrutinising private equity healthcare M&A as part of their broader examination into the industry. As part of this initiative, the Chair of the FTC, Lina Khan, who has been vocal about the need to address competition issues in the healthcare sector, specifically expressed concerns on the effects of private equity ownership and consolidation of healthcare services as well as pricing dynamics and access to services.

This heightened regulatory scrutiny has had several implications for healthcare M&A activity. Principally, it has injected complexity and uncertainty into healthcare M&A transactions, prolonging the approval process and escalating transaction costs, especially for larger transactions, which are more likely to be heavily scrutinised. For example, in 2023, the FTC brought two high-profile enforcement actions: one against Amgen’s USD28.3 billion acquisition of Horizon Therapeutics and the other against Pfizer’s USD43 billion acquisition of Seagen, in each case departing from traditional theories of harm. This heightened scrutiny of large deals may contribute towards a trend of smaller transactions in 2024. However, the FTC has also recently been focusing on roll-up strategies, contributing to further risk and uncertainty in navigating the current regulatory environment. This is exemplified by the agency’s lawsuit against U.S. Anesthesia Partners, Inc. (USAP), a provider of anaesthesia services, and a private equity firm, alleging the two had made numerous smaller acquisitions leading USAP to become the dominant player in the Texan anaesthesiology market. In May 2024, a US district court dismissed the private equity investor as a party but allowed the FTC to continue its case against USAP.

Moreover, heightened regulatory scrutiny has prompted a renewed focus on compliance and risk management in healthcare M&A deals. Companies are adopting proactive measures to mitigate antitrust risks, such as conducting comprehensive antitrust analyses and engaging with regulatory agencies earlier in the process. The higher risk of enforcement, delayed timelines, deal uncertainty and increased transaction costs are leading some companies to reconsider or delay their M&A plans.

Concluding Remarks

Reflecting on the healthcare M&A trends of 2023 and looking forward to the remainder of 2024, there are numerous indications of continued momentum, transformation and adaptation within the healthcare industry. With the broader economic recovery gaining traction and several industry-specific catalysts such as the looming patent cliff, shifting Medicare fees, high capital availability and ongoing product innovation, the stage is set for a dynamic year ahead. Despite regulatory scrutiny looming large, the overall outlook for healthcare M&A remains positive as companies are poised to leverage strategic partnerships and consolidation to navigate challenges, drive innovation and capitalise on emerging opportunities.


Sullivan & Cromwell LLP (S&C) provides the highest quality legal advice and representation to clients around the world. S&C’s record of success and unparalleled client service has set it apart for more than 140 years and made the firm a model for the modern practice of law. Today, it is a leader in each of its core practice areas and in each of its geographic markets. S&C advises a diverse range of clients on corporate transactions, litigation and estate planning matters. It comprises more than 900 lawyers, who conduct a seamless, global practice through a network of 13 offices, located in Asia, Australia, Europe and the United States. S&C is a perennial leader in M&A, having advised on some of the world’s largest and most noteworthy cross-border and domestic M&A transactions. S&C has acted in approximately USD5 trillion in M&A transactions over the past ten years.