Abstract

http://ssrn.com/abstract=2190201
 
 

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Mergers and Innovation in the Pharmaceutical Industry


William S. Comanor


University of California, Los Angeles

Frederic M. Scherer


Harvard University - Harvard Kennedy School (HKS)

December 3, 2012

American Antitrust Institute Working Paper No. 12-05

Abstract:     
Conflicting trends confound the pharmaceutical industry. The productivity of pharmaceutical innovation has declined in recent years. At the same time, the cohort of large companies who are the leading engines of pharmaceutical R&D has become increasingly concentrated. The concurrent presence of these trends is not sufficient to determine causation. In response to lagging innovation prospects, some companies have sought refuge in mergers and acquisitions to disguise their dwindling prospects or gain R&D synergies. On the other hand, the increased concentration brought on by recent mergers may have contributed to the declining rate of innovation. In this paper, we consider the second of these causal relationships: the likely impact of the recent merger wave among the largest pharmaceutical companies on the rate of innovation. In other words, have recent mergers, which may have been taken in response to lagging innovation, represented a selfdefeating strategy that only made industry outcomes worse?

Number of Pages in PDF File: 27

Keywords: Pharmaceutical Mergers, Innovation

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Date posted: December 17, 2012  

Suggested Citation

Comanor, William S. and Scherer, Frederic M., Mergers and Innovation in the Pharmaceutical Industry (December 3, 2012). American Antitrust Institute Working Paper No. 12-05. Available at SSRN: http://ssrn.com/abstract=2190201 or http://dx.doi.org/10.2139/ssrn.2190201

Contact Information

William S. Comanor (Contact Author)
University of California, Los Angeles ( email )
405 Hilgard Avenue
Box 951361
Los Angeles, CA 90095-1361
United States
Frederic M. Scherer
Harvard University - Harvard Kennedy School (HKS) ( email )
79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-495-1154 (Phone)
617-496-0063 (Fax)
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References:  29
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