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Merger mania: mergers and acquisitions in the generic drug sector from 1995 to 2016.

Global Health

August 2017

Department of Epidemiology, Biostatistics and Occupational Health, McGill University, 1020 Pine Avenue West, Montreal, QC, H3A 1A2, Canada.

Background: Drug shortages and increasing generic drug prices are associated with low levels of competition. Mergers and acquisitions impact the level of competition. Record merger and acquisition activity was reported for the pharmaceutical sector in 2014/15, yet information on mergers and acquisitions in the generic drug sector are absent from the literature.

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Prices are the major driver of why the United States spends so much more on health care than other countries do. The pricing power that hospitals have garnered recently has resulted from consolidated delivery systems and concentrated markets, leading to enhanced negotiating leverage. But consolidation may be the wrong frame for viewing the problem of high and highly variable prices; many "must-have" hospitals achieve their pricing power from sources other than consolidation, for example, reputation.

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