The health-care shopping spree isn't likely to stop anytime soon.
Corporate deal value surged to $332 billion last year, up 27 percent from $261 billion in 2016, though still below the peak of $432 billion in 2015, according to a new report from consulting firm Bain & Company.
Three mega-mergers, defined as those worth more than $20 billion, accounted for more than one-third of the total. Still, the number of deals globally increased 16 percent last year from the year before at 3,099.
Shareholders are looking for returns, cash is looking for a home, and debt is still rather cheap, making the overall market favorable for mergers and acquisitions, said Dale Stafford, who leads Bain's mergers and acquisitions practice in the Americas. Specifically in health care, he said, pressure on companies to lower costs is making deals attractive.
"The funders — sponsors, the federal government and employers — are paying the bulk, remember. Like all of us, they are just feeling the pressure and putting it back on the system," Stafford said. "To continue to deliver value without raising costs too much compels companies to grow through M&A."
Biotech, pharmaceutical and medical device companies tend to acquire companies that can fill their research and development pipelines or make them category leaders. They also divest assets to refine their portfolio.
Johnson & Johnson bought and sold a number of assets across its businesses last year. It acquired Actelion and its arsenal of pulmonary arterial hypertension drugs for $30 billion. It sold Codman Neurosurgery to Integra LifeSciences for $1.05 billion while scooping up a few smaller equipment and device companies.
"The important thing to remember for those industries, unlike say the (pharmacy benefit management) business or the health insurance business, is it's massively more fragmented," Stafford said. "There are hundreds of pharmaceutical companies of significant scale and dozens of significantly scaled medical device companies to combine around therapeutic areas."
For payers, including health insurers and pharmacy benefit managers, the story is a bit more complicated. Their industries are already consolidated, and regulators have blocked attempts to contract even more.
Some companies are now considering other types of matchups. CVS Health, both a drugstore chain and a PBM, is planning to hire health insurer Aetna for $69 billion in the largest corporate deal of 2017. Another insurer, Cigna, plans to buy PBM Express Scripts.
Walgreens Boots Alliance was also reportedly considering acquiring the part of drug distributor AmerisourceBergen that it doesn't already own earlier this year, though talks have cooled. Walmart and health insurer Humana are having early-stage talks about strengthening their existing partnership, people familiar with the matter told CNBC.
Stafford compares the pressure of sponsors on the system to the movement of tectonic plates on the Earth's surface. Companies feel that and are jockeying for more growth and value.
These dynamics aren't going away, he said.
"Do we expect these deals to continue? Yes, absolutely," he said. "The better question is why wouldn't they continue? We don't see pressure on health systems abating."