Medical Xpress January 13, 2025
A new study from the University of Iowa finds that many drug prices actually drop after pharmaceutical company mergers, challenging the belief that mergers are the primary cause of rising drug prices in the United States. The study finds the price drops are due to cost savings achieved by merging firms that have overlapping products that treat the same medical condition.
These results, published in the Journal of Corporate Finance, did find that industry-leading firms like Eli Lilly and Pfizer that focus on novel, first-in-class drugs raised the price of overlapping drugs by 6.3% after mergers. However, mergers involving firms that mostly produce generic and copycat drugs, such as Teva Pharmaceuticals or Activis Generics, lowered the price of overlapping drugs...
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