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Behind the latest wave of mergers

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Becker’s Hospital Review looks at the big mergers announced on April 28. Some of its observations:

1. “Some of the leading deals include Abbott’s proposed purchase of St. Jude Medical for $25 billion, a move intended to expand the former’s presence in the cardiovascular device sphere. To gain an edge in the prostate cancer treatment market, Sanofi made a bid to buy Medivation for about $9.3 billion. AbbVie signed a $5.8 billion deal to acquire Stemcentrxm to drive into oncology treatments….”

2. “The frenzy of deals is linked to new regulations, new payment models and the perceived need to keep pace with the record consolidation occurring within the industry — healthcare company executives see no option other than to scale up. …”

3. The introduction of mandatory bundled payment through the Comprehensive Care for Joint Replacement Model is one of the new regulations pushing healthcare companies to team up. With the goal of making healthcare less expensive and more efficient, organizations that solidify their positions as leading providers of a product or service will be the most attractive partners for hospitals and insurers in bundled deals, while smaller firms are more likely to be skipped over.”


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