Background The pharmaceutical industry is experiencing significant transformations driven by mergers and acquisitions (M&A), leading to complex debates regarding their impact on innovation. This study examines the intricate relationship between M&A activities and innovation within the sector, analysing whether the traded firms have received public funding and revealing diverse scholarly perspectives on the balance of benefits and drawbacks.Methods We conducted a targeted literature search for a narrative review using a combination of various terms in academic databases (PubMed), complemented by grey literature to find studies that analysed the impact of M&A on R&D. For the case study on the European pharmaceutical M&A landscape of 2023, we used the proprietary database Orbis to find such deals. We then combined information from company websites, investor news, governmental funding agencies, academic news, and academic publications to find public spending for the companies that were acquired in 2023 and used a category system we developed for public contributions.Results Existing literature suggests that M&A in pharmaceuticals is primarily motivated by technological and geopolitical shifts. However, concerns about market concentration during the drug discovery-to-development pathway highlight potential regulatory challenges. Our analysis of 2023 M&A deals shows that four out of 29 firms traded originated from academic spin-outs, with almost all small and medium enterprises (SMEs) involved having received public funding at some point (18 out of 21).Conclusion The lack of a comprehensive, publicly accessible register for such contributions complicates analysis. We advocate for mandatory reporting of all publicly funded projects to a single agency, enhancing transparency. The study concludes that while M&A activities can foster innovation, they also pose risks that must be carefully managed through informed policy and regulatory frameworks, particularly concerning publicly funded biotech firms and academic spin-outs.
Fabián et al. (Tue,) studied this question.