The pharmaceutical industry experienced a dramatic surge in merger and acquisition activity during the first half of 2025, with three blockbuster deals totaling over $28 billion reshaping the competitive landscape. Simultaneously, landmark legal rulings have established new precedents for antitrust enforcement and patent settlement structures that will guide industry practices for years to come.
Record-Breaking M&A Activity Drives Industry Consolidation
The opening months of 2025 marked an acceleration of large-scale life sciences transactions, highlighted by three major acquisitions. Merck completed a $3.9 billion acquisition of SpringWorks, while Sanofi secured Blueprint Medicines for $9.5 billion. The largest deal came from Johnson & Johnson, which acquired Intra-Cellular Therapies for $14.6 billion, demonstrating the industry's continued appetite for strategic consolidation.
These transactions occurred alongside significant regulatory developments that have reshaped the antitrust landscape for pharmaceutical companies structuring deals and patent settlements.
Pomalyst Ruling Provides Clarity on Patent Settlement Structures
In a notable departure from previous precedent, the U.S. District Court for the Southern District of New York ruled in April 2025 that most-favored-entry (MFE) clauses in Hatch-Waxman patent settlements do not inherently violate federal antitrust laws. The Pomalyst decision involving Bristol Myers' Celgene subsidiary marked a significant shift from the more restrictive approach taken in previous cases.
The court examined settlement agreements that Celgene entered into beginning in 2020 regarding patent challenges to Pomalyst, a multiple myeloma medication. Unlike the problematic structure in the earlier Xyrem case involving Jazz Pharmaceuticals, the Pomalyst settlements granted MFEP provisions equally to all three first-filer companies and crucially did not include "no authorized generic" agreements.
The ruling's impact became immediately apparent when plaintiffs filed an amended complaint in June that dropped all MFE-related claims entirely. A parallel lawsuit by Cigna against Celgene adopted identical language, omitting MFE allegations altogether.
The court rejected arguments that MFEP provisions alone constituted unlawful reverse payments, emphasizing that "other courts have found that an acceleration clause may trigger antitrust scrutiny only when alleged as 'part of' an otherwise unlawful reverse payment."
Regulatory Crackdown on Pharmaceutical Disparagement
In an unprecedented coordinated enforcement action, UK and EU competition regulators targeted pharmaceutical disparagement as a standalone abuse of dominance. The UK's Competition and Markets Authority (CMA) concluded a year-long investigation into Vifor Pharma in May 2025, finding the company had run a misleading campaign questioning the safety of rival Pharmacosmos' intravenous iron product, Monofer.
Without admitting wrongdoing, Vifor agreed to comprehensive commitments including a £23 million payment to the UK's National Health Service as redress and a multichannel communications campaign to correct potentially misleading safety claims. This followed earlier binding commitments accepted by the European Commission in July 2024 to resolve similar disparagement concerns across nine EU Member States through a decade-long remedial framework.
These enforcement actions established a clear precedent that systematic, misleading safety claims against competitors can breach competition law even without pricing abuse, highlighting regulators' heightened focus on "exclusionary disparagement" tactics.
Enhanced UK Merger Control Powers Target Early-Stage Deals
The UK Digital Markets, Competition and Consumers Act 2024, which became effective January 1, 2025, significantly expanded the CMA's merger control authority over deals involving early-stage or pre-revenue targets common in life sciences. A new hybrid jurisdictional threshold now captures acquisitions by large incumbents with UK revenue over £350 million and at least 33% market share of smaller targets with a UK nexus, even if those targets generate no UK revenue.
This change specifically targets potential "killer acquisitions" where incumbents purchase emerging competitors to neutralize innovation threats. The CMA has launched a reform program focusing on pace, predictability, proportionality, and process, aiming to complete prenotification within 40 working days compared to the current average of 65 days.
Court Upholds Landmark Excessive Pricing Decision
The Court of Appeal delivered a significant ruling in May 2025, upholding the CMA's excessive pricing decision against Advanz Pharma and its former private equity owners, Cinven and HgCapital, confirming a £51.9 million fine related to liothyronine, a thyroid hormone drug.
The court affirmed the CMA's use of a "cost-plus" pricing test to assess excessive pricing, rejecting arguments that prices should be judged against levels seen under "workable competition." The case centered on liothyronine's price increase of over 1,100% between 2009 and 2017, with no corresponding rise in production costs or evidence of innovation. NHS spending on the drug surged from more than £2.3 million to more than £30 million annually during this period.
EU Intensifies Foreign Subsidies Scrutiny
EU Competition Commissioner Teresa Ribera announced increased scrutiny under the Foreign Subsidies Regulation (FSR), signaling more assertive enforcement across sectors including life sciences. The FSR, fully effective since October 2023, grants the European Commission powers to review foreign state support in M&A deals and public procurement.
The first major test case occurred in May when the European Commission conditionally cleared e&'s acquisition of PPF Telecom following examination of financial contributions from the United Arab Emirates government. The deal received approval with behavioral remedies to address potential distortions, establishing that foreign state-backed buyers face significant regulatory hurdles.
For pharmaceutical and biotech companies, particularly those with state-linked investors or global procurement activities, early FSR risk assessment has become essential alongside traditional merger control and foreign direct investment reviews.
