• Nina LEHEYDA ZEW Centre for European Economic Research, Germany
  • Patrick BESCHORNER ZEW Centre for European Economic Research, Germany
  • Kai HÜSCHELRATH ZEW Centre for European Economic Research and WHU Otto Beisheim School of Management, Germany


The paper studies the effects of the Pfizer and Pharmacia (2003) merger on competition in the Swiss pharmaceutical market and compares the assessment of the Swiss Competition Commission (COMCO) with the post-merger market developments. We find that the merger has had a miniscule impact on the Swiss pharmaceutical market. This has primarily to do with the fact that the product portfolios of both companies have shown no or only slight overlaps. In both cases of potential anticompetitive effects, the companies successfully proposed to divest some of their assets in order to prevent a further strengthening of their dominant position. The remedies included products in the development phase which were not available on the market at the time of the decision.


[1] Ashenfelter, Orley C., and Hosken, D. 2008. The effect of mergers on consumer prices: evidence from five selected case studies, NBER Working Paper No. 13859.
[2] Ashenfelter, Orley C., Hosken, D., and Weinberg, M. 2009. Generating evidence to guide merger enforcement, NBER Working Paper No. 14798.
[3] Bundesamt für Statistik BFS. 2007. Beschäftigte im Gesundheitswesen: Fakten und Trends auf der Basis der Betriebszahlungen von 1995 bis 2005, Analysen des Bundesamtes für Statistik http://www.bfs.admin.ch/bfs/portal/de/index/themen/14/03/04/dos.html
[4] Cockburn, Ian and Henderson, R. 1996. Scale, scope and spillovers: the determinants of research productivity in the drug industry, RAND Journal of Economics, 27 (1): 32-59.
[5] Competition Commission. 2003. Comments by academic economists: covering note.
[6] Competition Commission. 2008a. Evaluation of the Competition Commission’s past cases, Report of the Competition Commission.
[7] Competition Commission. 2008b. Understanding past merger remedies: report on case study research, Report of the Competition Commission.
[8] CRA. 2004. Innovation in the pharmaceutical sector, Study undertaken for the European Commission No ENTR/03/28 by Charles River Associates.
[9] CRA International. 2007. Ex post merger review: an evaluation of three Competition Bureau Merger Assessments, Final Report prepared for Canadian Competition Bureau.
[10] Danzon, P. M., Epstein, A., and Nicholson, S. 2004. Mergers and acquisitions in the pharmaceutical and biotech industries, Mimeo, Wharton School, University of Pennsylvania.
[11] Davies, S., and Lyons, B. 2007. Mergers and merger remedies in the EU: assessing the consequences for competition, Edward Elgar, Cheltenham.
[12] Deloitte. 2009. Review of merger decisions under the Enterprise Act 2002, A report prepared for the Competition Commission, Office of Fair Trading and the Department for Business, Enterprise and Regulatory Reform.
[13] DTI. 2006. The R&D Scoreboard 2006: the top 800 UK and 1250 global companies by R&D investment, Commentary and Analysis.
[14] Duso, T., Gugler, K., and Yurtoglu, B. 2007a. EU merger remedies: an empirical assessment, in Stennek, Johan and Vivek Ghosal (Eds.), The Political Economy of Antitrust, Contributions to Economic Analysis, North-Holland, pp.302-348.
[15] Duso, T., Neven, D. J., and Röller, L.-H. 2007b. The political economy of European merger control: evidence using stock market data, Journal of Law and Economics, 50 (3): 455-489.
[16] Duso, T., Gugler, K., and Yurtoglu, B. 2010. Is the event study methodology useful for merger analysis? A comparison of stock market and accounting data, International Review of Law and Economics, 30: 186-192.
[17] European Commission. 2003. Case No. COMP/M.2922 – Pfizer/Pharmacia, Decision from 27/02/2003.
[18] European Commission. 2005. Merger remedies study, DG Competition, October 2005.
[19] European Commission. 2008. Pharmaceuticals: Overview, http://ec.europa.eu/comm/ competition/sectors/pharmaceuticals/overview_en.html
[20] European Patent Office. 2007. European Patent Convention, 13th edition.
[21] Farrell, J., Pautler, P. A., and Vita, M. G. 2009. Economics at the FTC: retrospective merger analysis with a focus on hospitals, Review of Industrial Organization, 35, 369-385.
[22] Federal Trade Commission (FTC). 1999. A Study of the Commission’s divestiture process, Prepared by the Staff of the Bureau of Competition of the Federal Trade Commission.
[23] Federal Trade Commission (FTC). 2003a. Pfizer, Pharmacia will divest assets to settle FTC Charges, Press release as of April 14.
[24] Federal Trade Commission (FTC). 2003b. Docket No. C-4075 Decision and Order in the Matter of Pfizer Inc., and Pharmacia Corporation, 14 April.
[25] Grabowski, H., and Kyle, M. 2008. Mergers and alliances in pharmaceuticals: effects on innovation and R&D productivity, in Klaus Gugler and Burcin Yurtoglu (Eds) The economics and corporate governance of mergers, pp.262-287 (Northampton, MA: Edward Elgar Publishing).
[26] Hassan, M., K. Patro, D., Tuckman, H., and Wang, X. 2000. Do mergers and acquisitions create shareholder wealth in the pharmaceutical industry? International Journal of Pharmaceutical and Healthcare Marketing, 1 (1): 58-78.
[27] Hausman, J., Leonard, G., and Zona, J. D. 1994. Competitive analysis with differentiated products, Annales d'Economie et de Statistique, 34, pp. 07.
[28] Higgins, M. J., and Rodriguez, D. 2005. The outsourcing of R&D through acquisitions in the pharmaceutical industry, Mimeo, George State University/Emory University.
[29] Hüschelrath, K., et al. 2008. Studien zu den Wirkungen des Kartellgesetzes: Endbericht für das Staatssekretariat für Wirtschaft SECO, Bern, ZEW/ETH Zürich.
[30] IMS Health. 2007. Pharmamarkt Schweiz 2006, Bern, January 22.
[31] LEAR. 2006. Ex-post review of merger control decisions, A Study for the European Commission prepared by LEAR.
[32] Morgan, E. J. 2001. Innovation and merger decisions in the pharmaceutical industry, Review of Industrial Organization, 19 (2): 181-197.
[33] Motta, M., Polo, M., and Vasconcelos, H. 2007. Merger remedies in the European Union: an overview, Antitrust Bulletin, 52 (3&4), Fall-Winter.
[34] Nastech. 2003a. Nastech to reacquire all intranasal Apomorphine product licenses and intellectual property and receive USD13.5 from Pharmacia, Nastech press release as of January 27.
[35] Nastech. 2003b. Nastech initiates Phase II intranasal Apomorphine trial for male erectile dysfunction, Nastech press release as of June 4.
[36] Nastech. 2003c. Nastech receives notice of allowance for apomorphine patent, Nastech press release as of July 24.
[37] Nastech. 2004. Nastech reports positive PYY obesity and Apomorphine sexual dysfunction clinical trial data, Nastech press release as of March 10.
[38] Nelson, P. and Sun, Su. 2001. Consumer savings from merger enforcement: a review of the antitrust agencies’ estimates, Antitrust Law Journal, 69 (3): 921-954.
[39] Nevo, A. 2000. Mergers with differentiated products: the case of the ready-to-eat cereal industry, RAND Journal of Economics, 31(3): 395-421.
[40] New York Times. 2002. Pfizer said to buy drug rival in USD60 billion deal, July 15.
[41] Novartis. 2003. Novartis übernimmt das neue Inkontinenzmittel Enablex@ (Darifenacin) von Pfizer für eine schnell wachsende Patientengruppe, Press release as of March 18.
[42] Novartis. 2004. Novartis announces commercialization collaboration in Germany for Emselex@ for the treatment of overactive bladder, Press release as of December 17.
[43] OECD. 2001. Competition and regulation issues in the pharmaceutical industry, Policy Roundtables of Directorate for Financial, Fiscal and Enterprise Affairs Committee on Competition Law and Policy, DAFFE/CLP (2000)29.
[44] OECD. 2003a. Merger review in emerging high innovation markets, Policy Roundtables of Directorate for Financial, Fiscal and Enterprise Affairs Competition Committee, DAFFE/COMP(2002)20.
[45] OECD. 2003b. Merger remedies, Policy Roundtables of Directorate for Financial and Enterprise Affairs Competition Committee, DAF/COMP(2004)21.
[46] OECD. 2005. Evaluation of the actions and resources of the competition authorities, Policy Roundtables of Directorate for Financial and Enterprise Affairs Competition Committee, DAF/COMP (2005)30.
[47] Office of Fair Trading OFT. 2002. The development of targets for consumer savings arising from competition policy, Economic Discussion Paper No. 4, Report prepared for the Office of Fair Trading by Stephen Davies and Adrian Majumbar.
[48] Office of Fair Trading OFT. 2007. Consumer savings from merger control: merger simulation for impact estimation, Report of the Office of Fair Trading.
[49] Ornaghi, C. 2009. Mergers and innovation in Big Pharma, International Journal of Industrial Organization, 27, pp. 70-79.
[50] Pautler, P. A. 2003. Evidence on mergers and acquisitions, Antitrust Bulletin, Spring 2003.
[51] Pfizer. 2003. Financial Report, Available at www.pfizer.com
[52] Pfizer. 2004. Financial Report, Available at www.pfizer.com
[53] Pfizer. 2006. Pfizer einigt sich über den Verkauf seines Consumer Healthcare-Geschäfts für 16.6 Mrd. US-Dollar an Johnson & Johnson, Pfizer press release as of 27.06.2006.
[54] PricewaterhouseCoopers. 2005. Ex post evaluation of mergers, A report prepared for the Office of Fair Trading, Department of Trade and Industry and the Competition Commission by PricewaterhouseCoopers LLP.
[55] Stern, S. 1996. Market definition and the returns to innovation: substitution patterns in pharmaceutical markets, POPI Working Papers No.36-96, MIT Sloan School of Management, Cambridge, Massachusetts.
[56] Sullivan, T.E. 2003. Antitrust remedies in the U.S. and EU: advancing a standard of proportionality, Antitrust Bulletin, 48, Summer 2003, pp. 377-422.
[57] Tenn, S., and Yun, J. M. 2009. The success of divestitures in merger enforcement: evidence from the J&J-Pfizer transaction, Working Paper No 296, Bureau of Economics, Federal Trade Commission, Washington, DC.
[58] Weinberg, M. 2007. The price effects of horizontal mergers, Journal of Competition Law and Economics, 4(2): 433-447.
[59] WEKO. 1996. Verordnung über die Kontrolle von Unternehmenszusammenschlüssen (VKU) vom 17. Juni.
[60] WEKO. 2003. Pfizer Inc./Pharmacia Corp, in Recht und Politik des Wettbewerbs (RPW/DPC 2003/2).
[61] Werden, G. J., and Froeb, L. 2006. Unilateral competitive effects of horizontal mergers, in Paolo Buccirossi (Eds) Handbook of Antitrust Economics, pp. 43-105 (Cambridge, MA: MIT Press).
[62] Werden, G. J. 2008. Assessing the effects of antitrust enforcement in the United States, De Economist, 156(4): 433-451.
How to Cite
LEHEYDA, Nina; BESCHORNER, Patrick; HÜSCHELRATH, Kai. EX-POST ASSESSMENT OF MERGER EFFECTS: THE CASE OF PFIZER AND PHARMACIA (2003). Journal of Advanced Research in Law and Economics, [S.l.], v. 2, n. 1, p. 18-47, feb. 2017. ISSN 2068-696X. Available at: <https://journals.aserspublishing.eu/jarle/article/view/626>. Date accessed: 17 apr. 2024.


mergers, ex-post evaluation, pharmaceutical markets