Mergers, Product Prices, and Innovation: Evidence from the Pharmaceutical Industry

• 成果类型: Article
• 署名作者: Bonaime, Alice; Wang, Ye (emma)
• 署名单位: University of Arizona; Stevens Institute of Technology
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.13321
• 发表日期: 2024
• 页码: 2195-2236
• 关键词: Horizontal acquisitions; MARKET; performance; COMPETITION; IMPACT; POWER; real

摘要

Using novel data from the pharmaceutical industry, we study product prices and innovation around mergers. Exploiting within-deal variation in product market consolidation, we show that prices increase more for drugs in consolidating markets than for matched control drugs. Estimates indicate a 2% average price effect that persists for about one year. Price increases expand with acquirer-target product similarity and are more pronounced within less competitive product markets with fewer players and no generic competition. Examination of trade-offs reveals these deals generate significant shareholder value. They also spur labeling and other manufacturing-related innovation, but not the development of new drugs.