Mergers with interfirm bundling: a case of pharmaceutical cocktails

• 成果类型: Article
• 署名作者: Song, Minjae; Nicholson, Sean; Lucarelli, Claudio
• 署名单位: Cornell University; National Bureau of Economic Research; Universidad de los Andes (Colombia)
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12192
• 发表日期: 2017
• 页码: 810-834
• 关键词: commodity; models

摘要

Pharmaceutical cocktails often consist of two or more drugs produced by competing firms. The component drugs are often also sold as stand-alone products. We analyze the effects of a merger between two pharmaceutical firms selling complements for colorectal cancer treatment. In this setting there are two merger effects: the standard upward pricing pressure due to firms internalizing the substitution between the stand-alone products, and an additional effect where the firms internalize the impact of selling complements and reduce the price of the cocktail product. The net impact of a merger is a modest price increase, or even a price decrease.