SMU SOE Online Seminar (Nov 17, 2021, 9.00am-10.30am):Consolidation in Drug Markets: Impact on Pricing and Access

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ABSTRACT We examine how M&A activity of manufacturers of branded prescription drugs affects equilibrium outcomes in the pharmaceutical market. Combining data from a variety of sources we first characterize the nature of M&A activity in the industry, finding significant heterogeneity in both the size and type of deals. Next, using an event-study design, we show that, on average, acquisitions are followed by higher prices and lower volume for drugs involved in the deal. We find only a small effect on formulary coverage. The average results conceals a high degree of heterogeneity. A single company, responsible for a sizable fraction of deals, is driving the average price effect. Other deals have a small effect on price except when they involve drugs in the same therapeutic area, or when the deal is valued below the threshold that triggers automatic regulatory scrutiny. Close competitors of acquired drugs also experience price and volume growth following acquisitions. Click here to view the speaker's profile.		This seminar will be held virtually via Zoom. A confirmation email with the Zoom details will be sent to the registered email by 16 November 2021.
		PRESENTER Luca Maini University of North Carolina at Chapel Hill
		RESEARCH FIELDS Health Economics Pharmaceutical Markets Industrial Organization
		DATE: 17 November 2021 (Wednesday)
		TIME: 9.00am - 10.30am