Big pharma has less cash for deals because the patent cliff and pricing pressures have hit operating cash flows and spending on earlier deals, stock repurchases and dividends.
In the Bank's Inflation Report, the upsurge in inflation is attributed partly to higher oil prices and partly to more general pressures arising from an economy operating close to capacity.
As per company guidance, revenues are expected to offset 80% of cost pressures in the Sept. quarter with operating margin estimated to fall in the range of 9%-11%.