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HARTFORD, CT — Just when it seems like progress may be on the horizon for lowering pharmaceutical drug prices, something else undermines it.

Yale School of Management Professors Song Ma and Florian Ederer and London Business School’s Colleen Cunningham authored a paper, which found more drugs would be available each year if not for “killer acquisitions.”

They refer to “killer acquisitions” as mergers used to terminate development of the target’s innovations to pre-empt future competition.

The professors admit it’s a “novel” but potentially concerning trend in the industry.

Connecticut State Comptroller Kevin Lembo, who is in charge of the state’s health insurance contract and has been a proponent of lowering drug prices, said it’s a concerning new trend that needs to be investigated.

“These killer acquisitions – pharmaceutical corporations that acquire competitors in order to block new potentially life-saving or life-changing medications from entering the market – demand immediate investigation and legal action by the state and federal investigators,” Lembo said. “When it comes to prescription drugs, killing innovation has the potential to kill lives as well when drug research is suppressed and prices senselessly skyrocket.”

Earlier this year the Connecticut General Assembly passed legislation that will increase transparency in drug pricing. It’s awaiting the governor’s signature.

The legislation, according to Lembo, “will force drug corporations to justify outrageous price increases.” It will also “shine a bright light on a shadowy market to help stop these egregious practices – but the people of Connecticut demand the partnership and support of the federal government to fight this behavior.”

Ma, Ederer, and Cunningham looked at more than 60,000 drug development projects originated by over 8,000 companies over the past two and a half decades. They concluded that killer acquisitions account for about 7 percent of the pharmaceutical industry’s mergers and acquisitions. They estimate that if killer acquisitions were eliminated that drug project development would raise the pharmaceutical industry’s aggregate drug project continuation rate by more than 5 percent.

They said a recent case involving the pharmaceutical firm Mallinckrodt and its subsidiary Questcor exemplifies the killer acquisition phenomenon.

According to the researchers, “Questcor enjoyed a monopoly in the category of adrenocorticotropic hormone (ACTH) drugs with its product Acthar. Acthar treats rare, serious conditions, including infantile spasms and nephrotic syndrome. In the mid-2000s, development began on Synacthen, a synthetic, direct competitor to Acthar. In an effort to pre-empt potential future competition, Questcor acquired the U.S. development rights of Synacthen in 2013.”

It essentially stopped the competition before it made it to market. Questcor did not develop Synacthen.

Then Questcor raised the price of Acthar from $40 per vial in 2001 to over $34,000 per vial by 2015.

As the Federal Trade Commission argued in an antitrust complaint, Questcor acquired Synacthen to preempt competition: “With the acquisition of Synacthen, Questcor thwarted a nascent challenge to its Acthar monopoly.”

In January 2017, Mallinckrodt (which acquired Questcor in 2014) settled the anti-competitive acquisition case, agreeing to pay $100 million.

Late last year, Connecticut’s Attorney General George Jepsen expanded his generic drug anti-trust lawsuit to include 20 defendants and at least 15 drugs. That lawsuit which involves 45 other attorneys general is still winding its way through the court system.