The coming of a the new year could spell a new beginning for pharma giant Pfizer (PFE 2.40%).

The acquisition of Allergan (AGN) will mean huge tax savings for the company -- a tax rate drop from 24% to approximately 18%. In addition to the tax considerations, the merger would give Pfizer access to Allergan's Botox -- in and of itself a $2.4 billion gain annually.

While most analysts agree that the $160 billion acquisition means better than average growth for Pfizer, we can't forget the importance of the earlier Pfizer/Hospira merger.

The full podcast can be listened by clicking here. A full transcript follows the video.

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This podcast was recorded on Dec. 16, 2015.

Kristine Harjes: It's been the biggest year for M&A both globally in across all the sectors and also definitely within the healthcare space. We saw the biggest healthcare acquisition ever announced earlier in November, and this was, of course, Pfizer and Allergan.

Todd Campbell: Yeah, the first nine months of the year, so not even including Pfizer's Allergan deal, we had 268 different pharmaceutical deals that were done for $231 billion in value. So you know, you throw the $160 billion on top of that for the Pfizer bid for Allergan, and you're talking about half a billion dollars in deals in the pharmaceutical industry alone.

Harjes: Yeah, and Pfizer had been in a bunch of talks recently regarding M&A. I mean, there was the failed bid for AstraZeneca, they bought Hospira back in February, and actually I think that's kind of a more interesting story than the Allergan deal, even though it was way smaller -- only $17 billion. Only.

Campbell: Yeah, obviously this deal for Allergan is huge, right? I mean $160 billion, right? And but a lot of the deal benefit, you could argue, is because of the tax inversion component of it. Meaning that you're going to move your headquarters, on paper at least, out of the U.S. in order to save on taxes.

And I think that the projection that the company offered out there is that their tax rate will fall to about 17% to 18% down from 24%. Now Allergan obviously has Botox and other drugs that are single-digit-plus growers. But I don't think, I tend to favor the Hospira because I think that could actually be more transformative over time. Solely because the Hospira deal gets them now into a leadership position in which the burgeoning, brand new nascent market of biosimilars which are the -- for lack of a better term -- the generic equivalent of a lot of these high-priced biologic drugs that dominate healthcare spending today.

Harjes: Yeah, and this is an enormous story -- the boom of biosimilars and actually one of the things that we highlighted in that MarketFoolery episode earlier this week. Because this could really be transformative for the entire healthcare space. I mean, you've got about $100 billion of biologic medicines that are slated to lose their patent protection in the next five years. Pfizer itself is saying that the addressable market for biosimilars should climb from $3 billion this year all the way to $20 billion in the year 2020.

So in buying Hospira, it gets its foot really firmly in the door of this important market. And at the time of the deal about 68% of Hospira's sales were coming from specialty medicines. But that's because the biosimilar part has just started to take off.

Campbell: Yeah, biosimilars have been available in overseas markets in Europe for years. But the FDA has been slow to embrace them because there really wasn't a clear pathway that was established to say, "OK, if a drug isn't exactly the same, can we still approve it and call it a generic?"

Biologic drugs are created living organisms, so it's virtually impossible to precisely duplicate them. So once healthcare reform came in and the pathway was established, the floodgates, if you will, are set to open. And the first of biosimilar to be approved in the U.S. happened already this year. It was a drug from Novartis. And many more are coming especially with high-profile, patent expirations about to happen. For example, Humira, the top-selling autoimmune disease drug at AbbVie, is set to lose patent protection at the end of 2016.