RE: CVS Caremark: A Match Not Made in Heaven
Dew,
I hope all is well.
This really is no surprise. I think it shows that the FTC is, in general, a less than effective bureaucracy, when it comes to anticipating anti-competitive relationships. As stated, I haven't had faith in them since Merck/Medco originally was approved.
What I find more interesting is the fact that CVS could not make this work. It is very educational for all investors that even though a merger might make sense from a business perspective, the results often fail. I have found that an expert in one area certainly is not an expert almost anywhere else. It is certainly true for me. CVS's mistake seems to be in it's choice of Caremark management.
Finally, with the new Health bill, I really think the need for PBM's will be questioned and may be one of the first insurance casualties of the bill. Why should business keep paying for the employee benefit when there is such an easy way to pawn it off? Then, what happens to the PBM relationship when it is no longer needed? Why should the government need 50 different PBM's? Why not own their own? ...... The cascade will be interesting to watch, even if you and I are paying all of the bills.
Finally, don't be too impressed by the prediction. It really is the only investment opinion I have been right on for a couple of years!!!!
Stay well,
RPh
AI
