The Trump Justice Department has just approved a $69 billion merger between the CVS drug chain and the insurance giant Aetna.
The advertised benefit of this and other mergers in the health, hospital, and insurance sectors is that it will cut costs and increase efficiencies.
Keep your hand on your wallet, gentle consumer.
No business pursues a merger to control costs. Behemoth corporations merge in order to increase market power.
Insurance companies have merged to increase pricing power. Likewise retail drug companies. Likewise hospital companies.
Is there some genuine efficiency that was missing before this latest of the mega-mergers? Nope. Consumer well-being is served when there is more competition within and between these large industries, not when there are fewer players.
In some large cities, like New York, the lion’s share of the retail pharmacy business is controlled by one or two chains. This can’t possibly be good for consumers.
The people who most celebrate free-market capitalism—that would be Trump and the Republicans—do believe in corporations. They just don’t believe in competition.
If the Democrats do get back into power, one of the first things they should do is to revive and expand antitrust.