WASHINGTON—In response to a hearing in the U.S. Senate Subcommittee on Competition Policy, Antitrust, and Consumer Rights, which focused on preventing pharmaceutical mergers in an attempt to reduce drug prices, the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy, released the following statement from Aurelien Portuese, director of ITIF’s Schumpeter Project on Competition Policy:
Blocking pharma mergers will not lower drug prices, but it could stifle innovation. More competition is generally good and incentivizes innovation, but too much competition has the opposite effect. Instead of thinking about creating new and innovative drugs, companies operating in those conditions will focus on cutting the prices of existing treatments in a bid to stay competitive in the near term. That dries up revenues they would otherwise use to make longer-term investments in new research and development.
This is not an outcome we want. If antitrust laws disincentivize innovation, patients will eventually stop benefitting from the innovative treatments they need.
For more on this issue, please see:
- Aurelien Portuese, “Pharmaceutical Consolidation & Competition: A Prescription for Innovation” (ITIF, June 2021).
- Robert D. Atkinson, Stephen Ezell, “Five Fatal Flaws in Rep. Katie Porter’s Indictment of the U.S. Drug Industry” (ITIF, May 2021).
- Stephen Ezell, “Ensuring U.S. Biopharmaceutical Competitiveness” (ITIF, July 2020).