Over the last two years, the gap between analysts’ estimates of big pharma sales and the global drug market forecast by IMS Health has widened significantly. In 2011, the overall drug market saw growth that overtook big pharma by approximately $20 billion; it is anticipated that this gap will further widen to $50 billion in 2012 because of major brands falling off the patent cliff.
A recent report by Ernst & Young, Closing the gap? Big pharma’s growth challenge and implications for deals, projects that the growth gap will reach $100 billion by 2015. As a result, big pharma is under increased pressure to drive growth through mergers and acquisitions (M&A). There is, however, another obstacle standing in the way—the firepower gap. Ernst & Young defines firepower as a company’s capacity for conducting M&A deals. Read more »