Dataset Information

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

ABSTRACT:

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. This information is necessary to understand if and how such mergers and acquisitions can be a factor in drug shortages and increasing prices.

Methods

Data on completed merger and acquisition deals that had a generic drug company being taken over (i.e. 'target') were extracted from Bloomberg Finance L.P. The number and announced value of deals are presented globally, for the United States, and globally excluding the United States annually from 1995 to 2016 in United States dollars.

Results

Generic drug companies comprised 9.3% of the value of all deals with pharmaceutical targets occurring from 1995 to 2016. Globally, in 1995 there were no deals, in 2014 there were 22 deals worth $1.86 billion, in 2015 there were 34 deals totalling $33.56 billion, and in 2016 there were 42 deals worth in excess of $44 billion. This substantial increase was partially attributed to Teva's 2016 acquisition of Allergan's generic drug business. The surge in mergers and acquisitions for 2015/16 was driven by deals in the United States, where they represented 89.7% of the dollar value of deals in those years.

Conclusions

The recent blitz in mergers and acquisitions signals that the generic drug industry is undergoing a transformation, especially in the United States. This restructuring can negatively affect the level of competition that might impact prices and shortages for some products, emphasizing the importance of updating regulations and procurement policies.

SUBMITTER: Gagnon MA

PROVIDER: S-EPMC5567637 | biostudies-literature | 2017 Aug

REPOSITORIES: biostudies-literature

ACCESS DATA

Publications

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

Gagnon Marc-André MA Volesky Karena D KD

Globalization and health 20170822 1

<h4>Background</h4>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. This information is necessary to understand if and how such mergers and acquisitions can be a factor in drug shortages and increa ...[more]

PMID: 28830481

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Project description:BackgroundTo reduce pharmacy-related medical expenses, it is necessary to cut drug costs, potentially by increasing generic drug usage. This study analyzes the correlation between generic drug usage and monthly personal income by examining prescriptions for individual drugs.MethodsWe conducted a cross-sectional study based on the data set from the National Database of Health Insurance Claims and Specific Health Checkups of Japan Open Data Japan and the Basic Survey on Wage Structure. We calculated the correlation coefficient between the usage rate of generic drugs in each prefecture of Japan and monthly personal incomes. We then analyzed the correlation coefficients based on the therapeutic categories of medicinal drugs; the contingency table was visualized as a mosaic plot. To compare the proportions between multiple categories, the chi-squared test was applied as a statistical significance test that was used in the analysis of n × m contingency tables. We worked with the null hypothesis that there were no differences between classes in the population.ResultsRegarding the correlation coefficient between the usage rate of generic drugs and monthly personal incomes, the proportion of negative correlation coefficients for outpatient out-of-hospital and outpatient in-hospital prescriptions was over 70%, while that for inpatient prescriptions was 46.9%. The proportion of medicinal drugs exhibiting a negative correlation between the rates of generic drug usage and monthly personal incomes for outpatient out-of-hospital prescriptions and outpatient in-hospital prescriptions was higher than that of inpatient prescriptions. The proportion of statistically correlated medicinal drugs among inpatient prescriptions was lower than that among outpatient out-of-hospital and outpatient in-hospital prescriptions. The proportions of significant negative correlations for outpatient out-of-hospital, outpatient in-hospital, and inpatient prescriptions were 30.6%, 22.7%, and 3.5%, respectively. It was also observed that the rate of generic prescription usage for outpatient out-of-hospital and in-hospital prescriptions increased as monthly personal incomes decreased. In outpatients, the therapeutic categories with strong negative correlations were vasodilators and hyperlipidemia drugs.ConclusionsOur results may help to increase the usage rate of generic drugs in different prefectures by providing useful information for promoting them throughout Japan.

Dataset Information

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

Background

Methods

Results

Conclusions

Publications

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

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