Pharma and life sciences innovation are fine.

Joanna Shepherd, August 28 2018, “CONSOLIDATION AND INNOVATION IN THE PHARMACEUTICAL INDUSTRY: THE ROLE OF MERGERS AND ACQUISITIONS IN THE CURRENT INNOVATION ECOSYSTEM,” Journal of Healthcare Law and Policy, https://digitalcommons.law.umaryland.edu/cgi/viewcontent.cgi?article=1356&context=jhclp

Despite concerns among some researchers and competition agencies that consolidation in the pharmaceutical industry reduces innovation, aggregate innovation has held strong notwithstanding dramatic increases in M&A activity. The years 2014 and 2015 generated both record numbers of new drug approvals and record pharmaceutical M&A.152 In fact, although M&A deals and new drug approvals vary slightly year-to-year, the general pattern has been increasing aggregate innovation alongside increasing consolidation.153 Although trend data is not enough to prove a causal relationship between innovation and consolidation, when considered alongside the evolving innovation ecosystem, it suggests that M&A does not stifle drug innovation. Today, most drug innovation originates outside of traditional pharmaceutical companies, in biotech companies and smaller firms, where a culture of nimble decision-making and risk-taking facilitates discovery and innovation. In the later stages of the drug development process, the biotech companies routinely partner with large pharmaceutical companies to advance through late-stage clinical trials and produce, market, and distribute the drugs. 154 In this current ecosystem, biotech and pharmaceutical firms are able to specialize in what they do best, bringing expertise and efficiencies to the innovation process. The specialization has led to an environment in which approximately three-fourths of new drugs are externally-sourced. 155 Internal R&D is no longer the primary source, or even an important source, of drug innovation.