LBS’s Colleen Cunningham and co-authors doctors Florian Ederer and Song Ma have been honoured by the Autoridade da Concorrência (AdC) Competition Policy Award for Killer Acquisitions, a study which focuses on the pharmaceutical industry, examining the phenomenon of firms buying competitors for the purpose of terminating projects that pose a threat. Among the author’s conclusions was that such acquisitions disproportionately occur just below the threshold that would subject them to the scrutiny of competition authorities.
The team found that drugs under development acquired by other firms were more likely to be terminated than non-acquired drugs, particularly when the parent company already had a very similar product. The researchers estimated that 7% of the acquisitions were killer acquisitions; if such deals did not take place, the number of drugs continuing development each year would increase by 5%. In other words, killer acquisitions may be holding back a substantial number of medical treatments.
Killer Acquisitions won the Robert F. Lanzillotti Prize for best paper in antitrust economics. Autoridade da Concorrência is the Portuguese Competition Authority. The Competition Policy Award award recognises outstanding research in antitrust economics and law.