Common Ownership and Market Entry: Evidence from the Pharmaceutical Industry

• Authors: Albert Banal-Estañol, Melissa Newham and Jo Seldeslachts
• American Economic Journal: Microeconomics, Vol. 17, No. 4, 260 - 327, November 2025

Common ownership—where several firms are (partially) owned by the same investors—and its impact on product market competition has recently drawn much attention. This paper focuses on its implications for market entry. We consider the entry decisions of generic pharmaceutical firms into drug markets that are opened up by the end of regulatory protection and which were previously dominated by a single firm selling the brand name drug. We find robust evidence that an increase in common ownership leads to a significant reduction in generic entry.