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Effects of Horizontal Mergers on Prices of Generic Drugs

by Antonio J. Trujillo a,* Mariana Socal a  and  Gerard Anderson a
a
Bloomberg School of Public Health, Johns Hopkins University, Baltimore, MD, USA
*
Author to whom correspondence should be addressed.
JEA  2025 4(2):101; https://doi.org/10.58567/jea04020004
Received: 21 January 2024 / Accepted: 3 December 2024 / Published Online: 24 January 2025

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.


Copyright: © 2025 by Trujillo, Socal and Anderson. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

Funding

the Laura and John Arnold Foundation (003A)

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ACS Style
Trujillo, A. J.; Socal, M.; Anderson, G. Effects of Horizontal Mergers on Prices of Generic Drugs. Journal of Economic Analysis, 2025, 4, 101. https://doi.org/10.58567/jea04020004
AMA Style
Trujillo A J, Socal M, Anderson G. Effects of Horizontal Mergers on Prices of Generic Drugs. Journal of Economic Analysis; 2025, 4(2):101. https://doi.org/10.58567/jea04020004
Chicago/Turabian Style
Trujillo, Antonio J.; Socal, Mariana; Anderson, Gerard 2025. "Effects of Horizontal Mergers on Prices of Generic Drugs" Journal of Economic Analysis 4, no.2:101. https://doi.org/10.58567/jea04020004
APA style
Trujillo, A. J., Socal, M., & Anderson, G. (2025). Effects of Horizontal Mergers on Prices of Generic Drugs. Journal of Economic Analysis, 4(2), 101. https://doi.org/10.58567/jea04020004

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