Pharmaceutical companies dancing closer than ever

The world?s biggest pharmaceutical companies began a frenzied series of mergers last weeks. The two largest companies, Pfizer (US) and Novartis (Switzerland) are taking the first steps. But the Canadian firm Valeant has also announced its intention to join with the US firm Allergan.

Pfizer, which is the to pharma company in the world, is preparing an assault against the British firm AstraZenaca in order to boost its presence in the European market. The deal is still in talks. Novartis has not watched this movement idly, responding quickly yesterday by drafting a complicated agreement with the British company GlaxoSmithKline and the America?s Eli Lilly. After the crisis, the pharmaceutical market has been restructuring to benefit the biggest firms, which specialize in making drugs and finding new medicines to fight cancer, vaccinate against illnesses and treat animals. Their overall strategy is directed at being a leader in each of these areas. Not counting Pfizer?s deal, which is still in talks, pharma companies have done 45 billion euros in deals in the past 24 hours.

By freeing up debt that they took on during major acquisitions in the early 2000s, the pharmaceutical companies have enough cash to engage in mergers and acquisitions. Tensions with the healthcare system in the United States and pressures to cut prescription drug costs in Europe are forcing the industry to tighten its belt via mergers, which should lower development costs. The dance is about to start, and the dancers will be closer than ever.