2021 was a bright year for many pharmaceutical firms, especially those able to find widespread support for their COVID-19 vaccines and therapies. 

But it would be wrong to take a myopic view of the pandemic as a chief growth driver for leading drug developers. The most significant impact of the pandemic may be how it changed R&D rather than how it drove sales in 2021.  

Three companies rounding out the top five — including the Chinese conglomerate Sinopharm, AbbVie and Novartis — didn’t have material COVID-19-related sales in 2021. The same holds for the bulk of companies in this year’s Pharma 50 report, which ranks the industry’s leading companies by overall revenue. 

The pandemic has, however, given companies like Pfizer extra cash to plow into acquisitions. In March, the company finalized its $6.7 billion acquisition of Arena Pharmaceuticals, a developer of immuno-inflammatory drugs. Two months later, Pfizer announced it planned to acquire migraine therapy maker Biohaven for roughly $11.6 billion. 

M&A activity cooled in the early days of the pandemic but began to recover in 2021. The biggest acquisition last year was Jazz Pharmaceuticals’ $7.2 billion acquisition of GW Pharmaceuticals. The next-biggest deal was Sanofi’s purchase of Translate Bio for $3.2 billion. 

Sizable acquisitions are nothing new for the industry as the average return on R&D spending has floundered. But the pandemic helped change that expectation, underscoring how companies that succeed in swiftly forging R&D partnerships and developing new therapies for unmet medical needs can reap handsome rewards.

Ultimately, the lasting impact of the pandemic may be how it underscores the importance for pharma and biotech companies to consider new types of alliances and strategies to fuel revenue growth. While the success of mRNA played an important role in the success of the most popular vaccines in 2021, the platform’s potential in other infectious diseases and oncology remains unproven. 

Before COVID-19, the industry largely struggled to see significant returns on R&D investments and looked for acquisitions to secure growth. However, pharma will likely need a more sophisticated strategy going forward. 

Check out our roundup of the 50 largest pharmaceutical companies in the world.