AstraZeneca said the offer "substantially" undervalued the business, forcing Pfizer to consider its next move.
However, industry sources said a hostile bid from Pfizer could come as early as today, which would trigger increased calls for the bid to be referred to the competition authorities. It would also heighten union fears over jobs if the takeover was successful.
Cable said the government had been "looking at the options around the public interest test" after Labour leader Ed Miliband demanded a full assessment of the potential deal.
The Labour leader has written to David Cameron calling for the publication of any analysis the Government has made of the proposal and claimed the Prime Minister had been acting as a "cheerleader" for the proposed deal.
He proposed widening the scope of the public interest test to take in industries of strategic importance - such as the high-value scientific research carried out by AstraZeneca.
The government can currently intervene on mergers or takeovers where there is a national security issue, an issue of media plurality, competition concerns or if it could affect financial stability.
Asked about reviewing the test, the Business Secretary said: "Obviously we are looking at this option amongst others, I'm sure you wouldn't expect me to go into all the detail and the discussions we are currently having between the two parties to the proposal.
"What we are endeavouring to ensure in the Government is to make absolutely sure Britain's excellent science base and pharmaceutical research is properly protected, manufacturing in the UK, decision-making, those are the issues we are talking to the companies about."
Cable said he had spoken to the chief executives of both firms and stressed that the Government was "strictly neutral" between the two.
Cameron has said the Government had received "robust" assurances from Pfizer about protection for British jobs and research under the proposed deal and stressed it was a decision for shareholders.
The Liberal Democrat Business Secretary said there was a "lot of small print to study" in the assurances given by Viagra manufacturer Pfizer.
"We publicly welcome the fact that a letter has been issued by the company which underlines the importance we attach in government to protecting British science and jobs and investment and manufacturing and decision-making in the UK but obviously there is a lot of small print to study, the question about how these obligations are binding and, of course, we're talking about two companies here and we're strictly neutral as between the two."
He said that the British competition and merger regime was non-political in the way it applied "but there is an important national interest here".
Cable's comments were in contrast to Tory attacks on Mr Miliband over his intervention in the row.
Conservative Party chairman Grant Shapps accused the Labour leader of "playing politics with people's jobs" and being "anti-business in every single way".