Brian Feldman, of the antitrust research group Open Markets Institute, argues that mergers in the past few decades have “created a funhouse mirror situation—the drug industry’s incentives have become incredibly warped.” The market for drugs is shaped by five different types of companies: drug manufacturers, wholesalers, pharmacies, insurers, and pharmacy benefit managers (which function as middlemen between manufacturers and insurers). If the CVS-Aetna deal goes through, Feldman argues, CVS would have a foothold in every category but manufacturing, meaning that it would encounter competition from other companies less often.
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