PwC predicts more healthcare M&As in 2011
Based on a 40 percent increase in total deal value during the last 12 months, PricewaterhouseCoopers (PwC) expects the healthcare mergers and acquisitions (M&A) and joint venture activity to continue growing through the rest of 2011. The need to reduce costs, increase productivity and develop integrated business models will drive the trend, PwC stated in a mid-year M&A outlook.
“Managed care companies will continue to pursue growth opportunities abroad to diversify geographic risk,” the PwC outlook stated. “The medical device industry will consolidate to achieve cost savings and diversify product portfolios, driven by the need to combat the impact of federal excise taxes, downward pressure on pricing and reimbursement and declining procedure volumes in certain high cost treatment areas.”
In addition, the firm predicted that well-financed hospital systems will continue to expand as those without high capital will seek merger partners, while pharmaceutical companies will likely provide new products as significant numbers of patents are set to expire, PwC noted.
“Managed care companies will continue to pursue growth opportunities abroad to diversify geographic risk,” the PwC outlook stated. “The medical device industry will consolidate to achieve cost savings and diversify product portfolios, driven by the need to combat the impact of federal excise taxes, downward pressure on pricing and reimbursement and declining procedure volumes in certain high cost treatment areas.”
In addition, the firm predicted that well-financed hospital systems will continue to expand as those without high capital will seek merger partners, while pharmaceutical companies will likely provide new products as significant numbers of patents are set to expire, PwC noted.