After a slow year of mergers and acquisitions in the pharmaceutical industry, senior executives from some of the largest drug manufacturers are expecting the Republican tax overhaul to accelerate deals by drugmakers in 2018, reports Reuters.
Healthcare industry bankers attributed the softened M&A activity in 2017 to uncertainties with the tax bill, unpredictability with ACA repeal and pressures surrounding drug pricing. However, since the tax bill was signed into law, pharmaceutical leaders expect mergers to increase.
The tax bill lowers the corporate tax rate by 14 percent and encourages companies to repatriate money — moves Allergan CEO Brent Saunders expects will clear the way for industry consolidation, according to the report.
Mr. Saunder's expectations echo those of healthcare industry analysts, who agreed that the new tax law will provide a catalyst for deals.
Several large drugmakers, such as Amgen and Bristol Myers, announced plans to bring overseas cash back to the U.S. This decision will benefit the entire market, said Tim Walbert, Horizon Pharma CEO.
"To the extent that you see acceleration of large [capital] deals ... that will bring more confidence in the sector and allow for more strategic opportunities for everyone," Mr. Walbert said, according to Reuters.