Innovation in Pharmaceutical Mergers: Looking for a Miracle Cure?

The European Commission’s approach to analysing the negative effects of a merger on competition has recently changed. Whereas for years, competition authorities have mainly focused on the effects of a merger on prices, the impact on output, or the creation or strengthening of a dominant position in a given market, they are now examining the effects of a merger on innovation. The analysis of the effects of a merger on innovation in the pharmaceutical sector is guided by the characteristics of the industry. The ultimate goal for both industry players and competition authorities is continuous technological progress, i.e. increased R&D capacity and incentives to innovate. We believe that any economic actor wishing to maintain its competitive position will innovate continuously and spontaneously. So, is over-regulation of innovation by the Commission really needed?