Two consultants writing for Stat News postulate that a tax holiday that might encourage mergers between pharmaceutical companies would spur research and development of new drugs.
We sought to address this uncertainty by focusing on research and development productivity: the amount of innovation created as measured by the value of new FDA-approved compounds reaching the pharmacy, relative to input. After all, what matters to patients is the creation of quality medicines, not how much a company spends on research and development or the number of patent applications it files.
To determine whether mega-mergers benefit patients, we looked at what happened to research and development productivity in all of the major mergers going back to 2001, including the last big wave in 2009 that brought together Merck & Co. and Schering-Plough, Pfizer and Wyeth, and Roche and Genentech.
As expected, the results varied from year to year and company to company. But our report in Drug Discovery Today showed that mergers generally appeared to drive productivity up — and did so significantly.
Why might this be so? While mergers undoubtedly bring disruption to research and development, they also can be catalysts for addressing the fatal flaw of most research and development enterprises: the high cost of failure.
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