Healthcare’s Premier Industry Advisor

As global demand for pharmaceutical and biotech products continues to rise, the market for CDMOs is expanding rapidly. Reports suggest that the European CDMO market is set to expand at a compound annual growth rate (CAGR) of 7.6% from 2025 to 2034, attracting significant attention from investors. Driving this surge is the rising demand for biologics and personalized medicine, along with cost pressures that are pushing pharmaceutical companies to increasingly outsource to CDMOs. While the market remains fragmented, consolidation is underway, with larger, PE-backed firms acquiring smaller CDMOs. High-growth segments, such as biologics, cell and gene therapies, and niche formulations, offer substantial investment opportunities.

Healthcare M&A is anticipated to surge significantly over the next five years. Several factors are fueling this trend, including an increase in both deal volume and size, a focus on rural healthcare, financial pressures, strategic consolidation, and the integration of new technologies. A critical yet often underestimated enabler of successful healthcare M&A is IT integration. Each deal presents unique challenges, shaped by market dynamics, organizational needs, and the nuances of different healthcare sectors. In this article, Marwood explores the growing trend of mergers and acquisitions (M&A) in healthcare, emphasizing the crucial role of IT integration in these complex transactions. It examines the factors driving M&A activity, the strategic importance of IT, potential challenges, and the key success factors. The aim is to demonstrate how effective IT integration can serve as a powerful tool for success in healthcare M&A.

Compounding Pharmacies play an important role in the US pharmacy ecosystem by fulfilling the need for customized drugs unmet by mass-produced products and by addressing commercial supply shortages. The market is an area of growing interest with favorable drivers driven by awareness and preference for personalized therapies, favorable population demographics, increasing disposable income, and frequent drug shortages in recent years. In this piece, Marwood explores the outlook for the Compounding Pharmacy market, including market sizing, dynamics of the top therapeutic areas, and key trends in the market.

While the 2024 Presidential and Congressional election cycle featured limited discussion of health care, 2025 has featured intense focus on the industry as President Trump staffs his administration and a full Republican lineup looks to pay for extending Tax Cuts and Jobs Act policies. Robert F. Kennedy, Jr. and Dr. Mehmet Oz represent a new type of political appointee for HHS and CMS, respectively. RFK, Jr. takes the helm at HHS as the Trump administration looks to reduce staff across HHS and reduce funding, including for NIH grants. For Dr. Oz, there are questions about how he will handle Inflation Reduction Act (IRA) drug pricing negotiations as well as Medicare Advantage policy. In Congress, Republicans look to extend tax cuts, Medicaid has been at the top of the list of potential cuts. The list of potential policies range from repealing Biden Medicaid rules, to imposing work requirements, to major changes to the program including limiting annual Medicaid growth and reducing the Medicaid expansion federal matching rate to the traditional Medicaid rate, which would eliminate expansion in many states. The search for Medicaid cuts has created tension among House and Senate Republicans, with fiscal hawks arguing for larger cuts while more moderate members and those from battleground states and districts uncomfortable with even more modest cuts. Congressional Republicans are intent on passing an extension of the tax cuts, so this will continue to be an issue until that goal is satisfied. Another key issue is the fate of the enhanced Affordable Care Act (ACA) exchange subsidies, initially passed as part of the American Rescue Plan in 2021 and extended in the IRA in 2022. Since 2021, over 12 million new enrollees have joined the exchanges, but the subsidies are set to expire at the end of 2025. It is not clear how Congressional Republicans could get on board with an extension, but there will be intense lobbying from providers, payors, and patients throughout 2025. Beyond these 2 major issues, there are a host of other issues, including physician fee schedule reform, the impact of the Department of Governmental Efficiency on Medicare and other government systems, and any read through from the IRA on pharma, Part D sponsors, and related entities, such as CROs. We hope you enjoy our latest Washington Health Care Policy Report.

The NHS priorities and operational planning guidance for 2025/26 presents an evolving landscape for investors and service providers, characterised by greater flexibility in funding, digital enhancements, and workforce optimisation. With increased financial flexibility granted to local systems, streamlined procurement processes, and an emphasis on best-value frameworks, this changing landscape presents investors with new opportunities. Investors and operators who are able to strategically align with these priorities may stand to capitalise on the UK healthcare sector’s shift towards sustainability, efficiency and modernisation.