Called TBWA\Worldhealth, it will be based in the TBWA\London offices and will combine expertise from around the group. It will offer clients across Europe consumer and professional healthcare services in advertising, promotion, medical education, CRM and digital.
Michael Paling, previously the chairman and chief executive of Paling Waters, will run the agency as its president.
Tim Lindsay, the president of the TBWA\Group, said: "Because of the increased availability of OTC medicine, healthcare agencies need to tap into consumer marketing expertise."
Paling added: "This move formalises the close working partnership, which has been developed for many years between TBWA and Paling Waters. We've now created a unique place where consumer and medical specialists can work closely together."