The proposed merger of CVS and Aetna will test what it means today to create value in business. Shareholders may gain, but will consumers? The Department of Justice (DOJ) will be setting important case law with its treatment of this vertical merger. And, in the end, we consumers will learn if these kinds of mergers are, literally, good for our health.
The CVS-Aetna Merger Hinges on One Question: What Do Consumers Get Out of It?
The proposed merger of CVS and Aetna will test what it means today to create value in business. Shareholders may gain, but will consumers? The Department of Justice will be setting important case law with its treatment of this vertical merger. And, in the end, we consumers will learn whether these kinds of mergers are, literally, good for our health. The crux of the matter is whether vertical mergers — between a buyer and its supplier — are better for consumers than horizontal mergers between two sellers. What incentive will there be to force the newly merged entity to share its savings with consumers? Enter the Amazon bugaboo. Amazon has acquired licenses to operate as a pharmacy wholesaler in a dozen states. If Amazon follows through, consumers will benefit.