ITALY Trends and Developments Contributed by: Luca Liistro, Chiomenti
Mergers, acquisitions and investment dynamics Italy’s life sciences sector continues to see a posi- tive trend in deal activity, with M&A transactions in the health industries growing by size and deal count. This activity reflects global dynamics, including the need for pharmaceutical companies to concentrate research and development (R&D) resources, acquire innovative assets and support their supply chain in an uncertain global context. Those factors increase the recourse to M&A for growth, together with traditional forces driving healthcare and life science companies to grow by lateral acquisitions of assets and compa- nies. The Italian government has taken significant steps to attract foreign direct investment, introducing single- authorisation procedures for large-scale projects and keeping the number of transactions triggering limita- tions or commitments to very low figure. Many Ital- ian regions now operate as Special Economic Zones, offering incentives, tax credits, and benefits for com- panies and workers. These measures, together with a historically high level of medical education and research talents, make Italy a good choice for invest- ments. Italy may not be Silicon Valley, but Italian ideas continue to be a sound investment. The legal market in Italy for M&A advisors is very sophisticated and financing transactions are well structured and regulated to support this growth in the healthcare space. There remains a number of Italian law firms with practice groups specialising in the life sciences space of transactional M&A, but those popu- lating the wider M&A space are very well established and have strong reputations internationally. Italy’s biotech ecosystem: emerging players Italy’s biotech sector is still smaller than those of other EU countries, although the universities are still mate- rial contributors of very good quality and innovative work for the benefits of innovators, and ultimately for patients. A number of industrial groups are support- ing research foundations and accelerators of ideas to increase the growth and value of ideas. Private inves- tors follow and seek to implement legal structures to accelerate innovation and put capital at work also in the growth space of life sciences. The EC’s proposed Biotech Act could provide support for these emerg-
Specific mention should be given to the ongoing debate within AIFA regarding potential new pricing mechanisms. Reports indicate that AIFA is consider- ing a mechanism of automatic price renegotiations based on company profits, and the measure has trig- gered significant industry concern. Critics argue that Italian drug prices are already among the lowest in Europe and that further pressure to reduce of prices could undermine the country’s attractiveness and therefore affect patients access to drugs, as has been witnessed in other EU countries. This discussion is obviously affected by the global market scenario including the role of tariffs and indus- try players exporting drugs from Italy to other coun- tries. Regional fragmentation, regulatory uncertain- ties and bureaucratic delays in market access further complicate the national scenario. The 2026 Budget Law introduced several measures impacting the pharmaceutical sector, including a reduction of the Innovative Medicines Fund and an increase in overall pharmaceutical spending caps. The rise of artificial intelligence (AI) in drug development AI is rapidly cementing its place in the industry, from supplementing data management practices to trans- forming clinical trials and research, which naturally leads to its involvement in drug discovery. In early 2026, the European Medicines Agency and the US Food and Drug Administration jointly published guiding principles for good artificial intelligence prac- tice in drug development, highlighting AI’s potential to foster innovation, accelerate regulatory approvals, and support pharmacovigilance activities. In increase in regulation and policies is expected to efficiently facilitate the increasing use of AI and at the same time regulate its perils and abuses. For Italian pharmaceutical and biotech companies, the adoption of AI tools presents both opportunities and compliance challenges. The European AI Act limits and regulates the use of AI systems, including those used in medical contexts. The life sciences sector is getting used to this new tool, and its regulation will follow suit.
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