The pharmaceutical industry is set for more, not less mergers, according to Schering-Plough’s former chief executive Fred Hassan who has presided over many such deals.

Mr Hassan, who was at the helm of S-P when it merged last year with Merck & Co, has given an interview to Bloomberg TV saying that he expects to see more consolidation in the sector. He believes large drugmakers will need to join together in order to fund expensive and complicated research in areas such as Alzheimer’s disease.

Furthermore, Mr Hassan who is working as an advisor to private equity firm Warburg Pincus, said smaller companies will be forced to sell themselves as they run out of cash and struggle to raise any more on the tight credit markets. He told Bloomberg that “innovation investments are becoming larger and larger and it makes it easier when people can combine their resources to make the big, deep bets that you need to make for difficult diseases”.

As well as the Merck merger, Mr Hassan has played a major role in many of the pharmaceutical industry’s biggest deals. In 2000, as head of Pharmacia & Upjohn, he consummated a $37 billion merger with Monsanto and in 2003 he oversaw the $60 billion merger of Pharmacia into Pfizer.