33 addiction treatment deals closed last year, 7 of them in the last quarter, according to M&A advisory firm Mertz Taggart – but it’s unlikely to pick up in 2026 as investors shy away from uncertainties related to the One Big Beautiful Bill Act’s Medicaid changes. Private equity has also faced criticism, Behavioral Health Business reported.
Love it or hate it, private equity controls over 7% of the addiction treatment industry, so it’s worth looking at what is happening in the sector today – most of it seems to affect the drug-for-a-drug centers.
While many in health care are skeptical of private equity’s role in addiction treatment services, it’s important to note that public sources of funding for SUD care have been under threat. Notably, in January, the Trump administration announced plans to cut $2billion in Substance Abuse and Mental Health Services Administration grants; the funding was restored but many, especially on the nonprofit side, saw this as a warning and an impetus to diversify.
There have also been some high-profile failures in the sector. For example, Alphabet-backed addiction treatment center OneFifteen closed all its clinical services last July, marking the end of Google’s parent company’s bet on brick-and-mortar SUD care. While OneFifteen was more venture-backed than PE-backed, the fact is that large investors made a major bet in the space that didn’t pay off.
One JAMA study compared 90 private equity-acquired facilities and 2,374 comparison facilities, finding that the number of patients receiving buprenorphine increased after the acquisition, but the prescribing quality of care fell. Private equity owns roughly a third of all OTPs in the country, according to a recent paper published in the International Journal of Drug Policy. While this could be a case for expanded access to methadone and other medication-assisted treatments, privately run OTPs have come under fire in the last year.
A study in Health Affairs in November found that private equity acquisition may increase a provider’s participation in public insurance programs. “Future policy efforts to increase care access at traditionally independent establishments may be moderated by changes in ownership structure.”
All this could lead to fewer providers in the drug-for-a-drug sector and/or lifespans expanded by reducing quality of service.
