INSIGHT: The Health-Care M&A Meter—Hot 2018 to Be Followed by Hotter 2019

Bloomberg Law Health Law & Business

Gary W. Herschman, Member of the Firm, and Yulian Shtern, Associate, in the Health Care and Life Sciences practice, in the firm’s Newark office, co-authored an article in Bloomberg Law Health Law & Business, titled “INSIGHT: The Health-Care M&A Meter—Hot 2018 to Be Followed by Hotter 2019.”

Following is an excerpt:

The increased pressure to provide patients with affordable, convenient and quality care while adapting to expanding value-based reimbursement programs buoyed investment activity across the health-care industry in 2018.

Last year was headlined by two mega mergers: CVS Health and Aetna, and Cigna and Express Scripts. This bullish industry outlook from large-cap investors has trickled down into the lower and middle markets, resulting in increased interest and premium valuations from private equity firms and strategic consolidators.

Several new trends and factors have emerged in 2018 that are likely to carry over and grow in 2019. In particular, 2018 saw several nontraditional companies enter the health-care industry, including industry giants such as Amazon, Apple, Berkshire Hathaway, and JPMorgan.

These retailers and other nontraditional health-care companies hope to lower the cost of providing employee health coverage, while satisfying the need for consumer-centric health-care solutions.