Medication management (MM) investment hit $831M this year, up 29% from $644M in 2020. Interestingly, deal count has remained steady at 36 in 2021 and 2022, despite dollars falling 41%.
This is due to larger average deal sizes this year. In fact, there were the same amount of MM mega-deals (3) in 2021 and 2022. This contrasts the broader healthtech industry, which saw a sharp drop (40%) in mega-deal financing.
Two of the three mega-deals were in pharmacy benefit companies, which offer solutions to increase access and affordability of prescription drugs. These deals mark the first-ever mega-deals in pharmacy benefits, which is historically the smallest application.
Investment is driven by the skyrocketing price of prescription drugs, which has grown at a faster rate than inflation over the past seven years, up 35% since 20191 in the US.
Notes: 1) Kaiser Family Foundation Report. 2) EU includes UK-based companies. Source: PitchBook, SVB proprietary data and SVB analysis.
Increased investment in MM also supports the overall flight to quality shown throughout healthtech. For example, a US-based study showed that post-hospital discharge medication delivery improved adherence by 57%1, highlighting the vast opportunity within this sector to improve healthcare quality.
Notes: 1) American Heart Association Report. 2) EU includes UK-based companies. 3) All 2022 data is through 9/30/22. Source: PitchBook, SVB proprietary data and SVB analysis.