Policymakers in California, New York and across the country are considering state-level antitrust proposals that could chill innovation, competition and growth in key industries, including life sciences.
The risk of misaligned state antitrust standards is especially acute in life sciences. Bringing a new medicine to patients is a long, costly and uncertain process. Along the way, companies of all sizes rely on the ability to partner to attract investment and combine complementary resources.
The Issue: State-level antitrust proposals risk chilling innovation and competition.
California’s proposed COMPETE Act (AB1776) is the latest state antitrust proposal that would depart from predictable, evidence-based antitrust standards and move toward subjective, speculative frameworks. Similarly risky antitrust frameworks have been proposed in New York’s state legislature.
These proposals would disincentivize the pro-competitive mergers and acquisitions (M&A) and other partnerships that accelerate innovation and allow life sciences companies to bring new treatments and cures to patients at scale.
Key stakeholders have commented on California AB1776:
- “AB 1776 is a deeply flawed approach that recklessly expands antitrust liability without demonstrating that our current antitrust laws (federal & state) are not working in the life sciences. It discards the analytical standards courts need to function, invites opportunistic litigation, and would impose irreparable harm on California’s life sciences ecosystem — penalizing exactly the conduct that lowers costs, expands patient access, and accelerates the path from scientific discovery to treatment.” – California Life Sciences (March 2026)
- “AB 1776 fails one of the basic tests of any good bill: It offers no clear, objective standard on how a business can comply with the law. Far too many provisions of the bill rely on subjective standards that can only be defined through litigation – a crippling cost for businesses that are the heart and soul of California’s innovation economy.” – California Chamber of Commerce (May 2026)
- “Our central estimate of the bill’s cost is now roughly $51 billion in the first year and about $760 billion by year ten, with about 1.2 million California jobs on the line. That remains a significant cost of about a tenth of the state’s annual GDP relative to a scenario without the enactment of AB 1776.” – Computer & Communications Industry Association (June 2026)
Why It Matters: Pro-competitive partnerships drive life sciences innovation.
It can take more than a decade and cost billions to bring a new treatment or cure through development to patients. Even then, roughly 90% of promising therapies never make it to market. Life sciences M&A helps companies survive against these enormous headwinds. Recent research shows that:
- Drug candidates that undergo M&A are ~2x more likely to launch and ~3x more likely to launch as a novel drug.
- When smaller, less experienced companies undergo M&A with more experienced ones, their drug candidates are 3x more likely to launch and nearly 23x more likely to launch with a new mechanism of action.
The Bottom Line: Policymakers should preserve balanced state-level antitrust enforcement.
As other stakeholders have echoed, these state policies put U.S. life sciences leadership at risk and threaten to block new medicines from reaching the market. Policymakers must preserve a balanced approach to antitrust enforcement that avoids imposing unnecessary burdens on companies of all sizes working to bring groundbreaking new treatments and cures to patients.