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Common Ownership in the U.S. Pharmaceutical Industry: A Network Analysis

Author

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  • Banal-Estañol, Albert
  • Newham, Melissa
  • Seldeslachts, Jo

Abstract

We investigate patterns in common ownership networks between firms that are active in the U.S. pharmaceutical industry for the period 2004–2014. Our main findings are that “brand firms”—that is, firms that have research and development capabilities and launch new drugs—exhibit relatively dense common ownership networks with each other that further increase significantly in density over time, whereas the network of “generic firms”—that is, firms that primarily specialize in developing and launching generic drugs—is much sparser and stays that way over the span of our sample. Finally, when considering the common ownership links between brands firms, on the one hand, and generic firms, on the other, we find that brand firms have become more connected to generic firms over time. We discuss the potential antitrust implications of these findings.

Suggested Citation

  • Banal-Estañol, Albert & Newham, Melissa & Seldeslachts, Jo, 2021. "Common Ownership in the U.S. Pharmaceutical Industry: A Network Analysis," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 66(1), pages 68-99.
    • Handle: RePEc:zbw:espost:266480
    DOI: 10.1177/0003603X20985796
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    Cited by:

    1. Antonio Estache & Christophe Kieffer, 2021. "Does Common Ownership Influence the Financial Strategy of the French Pharmaceutical Firms?," Working Papers ECARES 2021-09, ULB -- Universite Libre de Bruxelles.

    More about this item

    Keywords

    Common ownership networks; Pharmaceutical companies; Competition; Innovation;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics

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