Mergers, Acquisitions, and Alliances

Henry G. Grabowski and Margaret Kyle

in The Oxford Handbook of the Economics of the Biopharmaceutical Industry

Published in print April 2012 | ISBN: 9780199742998
Published online September 2012 | | DOI:

Series: Oxford Handbooks

 Mergers, Acquisitions, and Alliances

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This article considers the determinants and effects of M&As in the pharmaceutical industry, with a particular focus on innovation and R&D productivity. As is the case in other industries, mergers in the pharmaceutical field are driven by a variety of company motives and conditions. These include defensive responses to industry shocks as well as more proactive rationales, such as economies of scale and scope, access to new technologies, and expansion to new markets. It is important to take account of firms' characteristics and motivations in evaluating merger performance, rather than using a broad aggregate brushstroke. Research to date on pharmaceuticals suggests considerable variation in both motivation and outcomes. From an antitrust policy standpoint, the larger horizontal mergers in pharmaceuticals have run into few challenges from regulatory authorities in the United States and the European Union, given the option to spin off competing therapeutic products to other drug firms.

Keywords: M&A; R&D; pharmaceutical industry; productivity

Article.  10317 words. 

Subjects: Economics ; Health, Education, and Welfare ; Industry Studies

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