Journal article
Seeking efficiency or price gouging? Evidence from pharmaceutical mergers
Journal of corporate finance (Amsterdam, Netherlands), Vol.87, 102623
08/2024
DOI: 10.1016/j.jcorpfin.2024.102623
Abstract
We examine the impact of mergers on drug prices and document significant differences between the post-merger pricing strategies of highly innovative pharmaceutical firms and other firms. While the former raise prices of overlapping drugs, especially brand name drugs that tend to be first-in-class and patented, we find pervasive evidence of price reductions by generic manufacturers. Our evidence suggests that the price reductions are due to cost cuts realized by less innovative firms in overlapping product spaces. We also show that less innovative acquirers cut R&D and shift product development from high-novelty products to cheaper, less-risky products.
Details
- Title: Subtitle
- Seeking efficiency or price gouging? Evidence from pharmaceutical mergers
- Creators
- Mosab Hammoudeh - University of New OrleansAmrita Nain - University of Iowa
- Resource Type
- Journal article
- Publication Details
- Journal of corporate finance (Amsterdam, Netherlands), Vol.87, 102623
- Publisher
- Elsevier B.V
- DOI
- 10.1016/j.jcorpfin.2024.102623
- ISSN
- 0929-1199
- eISSN
- 1872-6313
- Language
- English
- Electronic publication date
- 06/25/2024
- Date published
- 08/2024
- Academic Unit
- Finance
- Record Identifier
- 9984654501602771
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