Although many of the largest pharmaceutical manufacturers have conceded that they cannot cover all areas of research and technology independently; the idea that a further increase in the size of the firm through mergers or acquisitions will correspondingly improve research performance and productivity is highly questionable. One reason for this is that despite the increasing amount of resources being spent on R&D, it is widely believed that the long-term problem of the pharmaceutical industry is that its R&D efforts are not producing enough products to sustain historical levels of growth. Increased financial investment has failed to achieve a genuine increase in productivity with fewer novel products being replaced by those reaching the end of their patent life. Therefore although a merger or an acquisition strategy will allow a particular company to obtain a number of good products from its partner, this by itself cannot immediately generate a superior product portfolio, especially in the short-term.…
