The pharmaceutical and healthcare industries are facing a major transformation, largely driven by an anticipated wave of mergers, acquisitions, and strategic deals. This activity is a direct consequence of the "patent cliff," as many blockbuster drugs are scheduled to lose their exclusivity starting in 2026 and beyond. This loss of protection will fundamentally reshape the commercial structure of the industry.
The financial risk is substantial, with analysts estimating that patent expirations on top-selling medicines could jeopardise approximately 12% of global pharmaceutical revenues, equating to about $180 billion annually over the next few years. This massive revenue erosion is compelling major companies to look outside for innovation and pipeline strength, rather than relying exclusively on internal research and development. Key blockbuster brands like Eliquis (apixaban), Prevnar 13, Januvia, and Xeljanz are among those facing patent loss around 2026-2027.
Big Pharma's strategic response involves aggressively pursuing deals to counteract the steep revenue declines (often 40–90% in the year following patent loss) caused by generic competition. These acquisitions are designed to integrate novel assets, promising biotech pipelines, and next-generation therapeutics into their portfolios. Recent examples include Eli Lilly's $1.2 billion acquisition of Ventyx Biosciences in early 2026 and the rumoured $32 billion potential acquisition of Revolution Medicines by Merck to bolster its oncology pipeline ahead of key patent losses like Keytruda. The optimism surrounding the 2026 M&A environment was highlighted at the J.P. Morgan Healthcare Conference, where clearer US regulatory policy and looser antitrust scrutiny were flagged as potential drivers for mega-mergers and smaller bolt-on acquisitions.
Deal activity is heavily focused on specialised therapeutics, particularly oncology, immunology, and rare diseases, areas where smaller biotech firms often drive early-stage innovation. Acquiring or partnering with these companies is a crucial strategy for large pharma to mitigate the revenue risks from their older, established products losing exclusivity. Furthermore, the patent cliff significantly boosts the generics and biosimilars market. As highly lucrative medicines like semaglutide begin to lose exclusivity in markets such as India and Canada in 2026, generic manufacturers are well-positioned to capture significant market share, an opportunity projected to add tens of billions in incremental revenues for players like Dr. Reddy’s, Biocon, Sun Pharma, and Cipla. Similar trends are emerging in the UK and EU.
In addition to M&A, major originator companies are utilising lifecycle management strategies—such as developing new indications or improved formulations—to extend the value of existing products and minimise the impact of patent lapses. For stakeholders in the UK and EU, this global deal spree presents both risks and opportunities. While consolidation might lead to fewer choices and potential price pressures, the introduction of expanded portfolios and new therapeutic options, if integrated responsibly, could stimulate innovation and improve patient outcomes. Ultimately, the patent expiry-driven deals spree confirms a changing pharmaceutical landscape where strategic M&A is becoming central to business models, complementing in-house R&D to sustain growth, manage risk, and address evolving global health priorities. The pace of deals in 2026 is expected to set the standard for pharmaceutical innovation and competition in the coming decade.
