Killer Acquisitions, and Other Forms of Anticompetitive Collaborations

In this paper we analyse so-called ‘killer acquisitions’ and other detrimental collaborations. Firstly, by analysing economic doctrine. Secondly, by looking at the practice in the human medicine industry. Thirdly, we analysed the merger rules, and whether they can identify and catch the problematic cases from an innovation stand-point and whether the merger rules resolve these cases to the benefit for consumers and society at large. Concluding that mergers and strategic alliances in the pharmaceutical industry would benefit from a more intense competition law scrutiny, we presented our proposal that we think would benefit competition and innovation the pharmaceutical industry. We suggest that certain firms in the pharmaceutical sector should be obliged to notify all their transactions that imply change of control over research or research results, and that the focus under the merger rules should be on innovation and innovation results. A notification system should hence be put in place also for license agreements, R&D collaborations and strategic alliances where the control over the promising research or research capabilities is transferred to the benefit of a large pharma firm due to the covenants and the restrictions for the R&D start-up and its key employees