The patent cliff is boosting the volume and market share of generic pharmaceutical products. Generics account for 88% of all prescriptions filled annually in the United States, according to the latest IMS Report. For good reason, since generic drugs typically cost between 50% to 70% less than their branded equivalents. Governments and managed care companies have historically been proponents of generic drugs, which can lower the cost of healthcare across the entire continuum.

2015 was the year of the M&A boom in the generic drug segment, with 25 deals totaling $64.8 billion. The targets include the companies focused on generic pharmaceuticals as well as the rights to generic pharmaceutical products. Since then, deals have slid dramatically, to just four transactions announced in the first five months of 2017. Although opportunity still exists in this market, generics have taken a backseat to preclinical candidates from biotech companies, which have garnered most of the attention from pharma companies.

More than 60% of 2015’s aggregate dollar amount was the $40.5 billion divestment of Allergan’s (NYSE: AGN) generic drug unit to Teva Pharmaceutical Industries (NYSE: TEVA). Also occurring in 2015 was Pfizer’s (NYSE:PFE) $17 billion takeover of Hospira (NYSE: HSP), the world’s largest producer of generic injectable drugs. Hospira is also a global leader in biosimilars.

In 2016, there were only 14 deals and $15.2 billion spent. Four of the deals were part of the agreement that Teva made with the European Commission regarding its $40.5 billion deal with Allergan. In October, it sold a product portfolio of eight Abbreviated New Drug Applications (ANDAs) to Dr. Reddy’s Laboratories (NYSE: RDY) for $350 million, and certain Actavis Generics assets and operations in the United Kingdom and Ireland to Accord Healthcare Limited for $760.4 million.

In June 2016, Teva sold a portfolio of generic products across solid oral, inhalable, injectable and topical dosage forms to Impax Laboratories Inc. (NASDAQ: IPXL) for $586 million. The same month, it sold a portfolio consisting of 37 approved products and 5 FDA filed products to Australian pharma company Mayne Pharma (ASX: MYX) for $652 million.

The largest deal was Mylan NV’s (NASDAQ: MYL) purchase of Swedish drug maker Meda AB (STO: MEDA) for $9.9 billion. Meda focuses on branded, over-the-counter and generic drugs.

In the first five months of 2017, there have only been four of these deals, and a total of $6.3 billion spent. In April, Fresenius Kabi (NYSE: FMS) announced that its acquisition of Akorn Inc. (NASDAQ: AKRX) for $5.1 billion. Akorn is a specialty generic pharmaceutical company that develops, manufactures and markets multisource and branded pharmaceuticals.

On that same day, Merck KGaA sold its biosimilars business to Fresenius Kabi for $186 million (€170 million) with potential milestone payments of up to $546.5 million (€500 million).