The Relationship Between Consolidation and Innovation in the Drug Industry

The prescription drug industry has undergone a significant transformation in recent decades. The intensifying competition from generic drugs, the expanding power of entities that pay for drugs and negotiate drug prices, the increasing costs of drug development and gaining approval from the Food and Drug Administration, and the growing risks of commercial failure have strained the finances of many traditional drug companies.  Many companies have responded by consolidating to either reduce costs or create new sources of revenue. As a result, the number of mergers and acquisitions (M&A) in the pharmaceutical industry recently hit an all-time high.

As pharmaceutical M&A … Read more