Effects of Horizontal Mergers on Prices of Generic Drugs

Antonio J. Trujillo, Mariana Socal and Gerard Anderson
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Antonio J. Trujillo: Bloomberg School of Public Health, Johns Hopkins University, Baltimore, MD, USA
Mariana Socal: Bloomberg School of Public Health, Johns Hopkins University, Baltimore, MD, USA
Gerard Anderson: Bloomberg School of Public Health, Johns Hopkins University, Baltimore, MD, USA

Journal of Economic Analysis, 2025, vol. 4, issue 2, 54-72

Abstract: This paper quantifies the impact of horizontal mergers on the prices of drugs. We study all mergers between two publicly traded pharmaceutical companies working in the US between 2010 and 2015 and their effect on their drugs prices. Using a differences-in-differences approach, we estimate that drugs marketed by the merging firms experience an AWP increase of about between 8% and 15% during the five years following the merger. These price increases are present even in markets with more than five competitors.

Keywords: Horizontal Merger; Generic Drugs; Market Concentration; Pharmaceutical Industry; Event Analysis (search for similar items in EconPapers)
Date: 2025
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