From patents to pricing- what’s shaping pharma deals in 2026?
HBI attended the McDermott Will & Schulte life sciences conference this week. The big questions weren’t if deals would happen, but how fast, how risky and on whose terms.
Patents were a key topic of discussion given the scale of upcoming expirations. The top 20 pharma companies face the largest patent cliff in the industry’s history, with an estimated $200 billion in revenues at risk between 2027 and 2031. Even after counting everything already in their pipelines, around $100 billion will need to come from new drugs or deals.
Big pharma is striking deals earlier in development, moving faster on execution and casting a much wider net geographically to find the innovation it needs. Ten to fifteen years ago, most transactions involved mid‑stage assets, but today the majority of big‑pharma M&A is for much earlier assets because there simply are not enough late‑stage assets to buy.
China, once dismissed as a source of imitation rather than invention, now originates more than half of all antibody‑based cancer drugs and close to half of bispecific antibodies in early‑stage development globally.
Drug pricing politics in Washington were brought up. Between Medicare price negotiations and “Most Favoured Nation” (MFN) proposals that would link US prices to lower European levels.
US biotechs are suddenly wary of licensing their drugs for markets outside the US, fearing that a discount agreed in Europe today will be used to cut their US price tomorrow. Several speakers mentioned that their ex‑US deal pipelines have thinned noticeably since tariffs and MFN moved up the agenda.
European mid‑caps, meanwhile, are increasingly entering the US market. They are often doing it through rare‑disease drugs, which can be sold by small specialist teams instead of huge primary‑care salesforces.
Financing has always been creative and so royalty structures, venture debt and blended instruments are filling gaps that traditional equity and bank lending are not fully meeting, particularly for companies navigating the long stretch between clinical proof of concept and commercial scale.
And then there was AI. Not the concept of AI, but the reality of it, already embedded in clinical workflows, already accelerating drug discovery, and already generating fierce debate about whether Europe’s regulatory instincts will help or hinder its adoption.
The deals are coming. The question is who will be ready.
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