Ex-Post Analysis of Pharmaceutical Merger Cases in the EU and US : The Identification of the Relevant R&D Projects

In this ex-post analysis, we have used three large pharmaceutical merger cases to examine the correctness of the market definition carried out by the FTC and the European Commission with regard to innovation competition. In doing so, we selected three merger cases that were reviewed by both competition authorities between 2000 and 2015 with regard to their impact on innovation. We compared the authorities' approaches to identifying competing R&D projects with data from an independent database, which is the most comprehensive concerning pharmaceutical R&D projects. We found that the authorities' approaches have varied considerably in the past, and their performance in identifying relevant R&D projects has been mixed. Often, the competing projects were correctly identified (especially by the FTC). However, some mistakes were also made that may have led to partially wrong decisions by the European Commission. Overall, our investigation has shown that there are still many open questions regarding the appropriate method for identifying competing R&D projects and thus for market definition in relation to innovation competition