Notably, the average premiums for pharma–biotech deals increased from 46.7% in 2014 to 59.8% in 2023, with the latter year recording the third-highest average premium in the past decade.

Despite these positive indicators, global pharmaceutical mergers and acquisitions (M&A) deal volumes in 2023 were lower than in previous years and significantly below the peak of $358.1 billion in 2019.

The pharmaceutical industry is at a crossroads, with the potential for recovery or further decline depending on market conditions and external influences.

In 2023, the pharmaceutical industry reached a significant milestone with a deal volume of $215.9 billion, marking an increase from $178.2 billion in 2022.

This growth was driven in part by pharma–biotech deals, which totaled $128.7 billion in 2023, exceeding the $105.1 billion recorded in 2014.

The average deal premium in the pharmaceutical sector also saw a rise, reaching 42.4% in 2023, compared to just 31.9% in 2014, reflecting a strong interest in acquisitions.

As of early 2024, only $74 billion in deals have been recorded, suggesting a challenging environment for the industry moving forward.

However, the first half of 2024 has shown a concerning decline in pharma–biotech deal volumes, dropping to $37.6 billion from $72.9 billion in the same period of 2023.

This downturn in early 2024 raises questions about the industry's ability to surpass the total deal volumes achieved in 2023.

Several factors could be influencing this trend, including geopolitical tensions, potential legislative changes, and the upcoming US elections in November 2024.

The outcome of these elections may significantly affect merger reviews and regulatory scrutiny surrounding pharmaceutical deals.

Despite the overall decline in deal volumes since 2019, the high average premiums indicate that pharmaceutical companies continue to be attractive targets for acquisitions.