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High-throughput Identification of Synergistic Drug Combinations by the Overlap2 Method
Published on: May 21, 2018
Mergers and innovation in the pharmaceutical industry
William S Comanor1, F M Scherer
1University of California, Los Angeles, Santa Barbara, USA. comanor@ucla.edu
Journal of Health Economics
|December 11, 2012
Summary
Recent pharmaceutical mergers may worsen declining innovation rates. This study examines if these mergers, intended to boost R&D, inadvertently harmed pharmaceutical productivity and industry outcomes.
Area of Science:
- Pharmaceutical industry
- Innovation economics
- Mergers and acquisitions
Background:
- Declining pharmaceutical R&D productivity is a significant concern.
- The pharmaceutical sector has seen increasing consolidation among major companies.
- The relationship between these trends and potential causation requires investigation.
Purpose of the Study:
- To analyze the impact of recent mergers on the rate of pharmaceutical innovation.
- To determine if mergers, pursued due to lagging innovation, represent a self-defeating strategy.
Main Methods:
- Econometric analysis of pharmaceutical industry data.
- Examination of merger trends and their correlation with innovation output.
- Causal inference modeling to assess the impact of consolidation.
Main Results:
- Increased industry concentration through mergers may negatively affect innovation rates.
- Evidence suggests mergers might exacerbate the decline in pharmaceutical R&D productivity.
- The strategy of using mergers to counter lagging innovation appears counterproductive.
Conclusions:
- Recent waves of mergers in the pharmaceutical industry may be contributing to, rather than solving, the innovation problem.
- Consolidation strategies need careful re-evaluation in light of their potential to stifle R&D.
- Further research is needed to fully understand the complex dynamics between industry structure and innovation outcomes.
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