Jim Palermo: Warns that cheapest price not always best deal

  • jacoblund

Sunday, December 17, 2017
Warns that cheapest price not always best deal

Milton Friedman and his aligned let-the–market-run-wild economists have successfully advanced the theory that the primary responsibility of a corporation is to make money for its shareholders.

Thus any assertion that CVS acquiring Aetna or Walgreens buying Rite Aid will benefit consumers should be met with a large dose of cynicism.

The benefit is most likely to the bottom lines of corporate financial statements, while consumers become even more subservient to the rapacious “free market.” Corporations will determine how our health needs are to be met, and because the corporations are so huge, our individual concerns will have little to no impact. (If CVS is the only pharmacy and health clinic in the area, and the only one to accept our health insurance plan, what can we do about it?)

As I understand the law, vertical integration — such as the CVS and Walgreen deals — is OK, while horizontal integration may run afoul of anti-monopoly legislation. But, it seems to me that hogging the market so as to reduce competition and stifle the legitimate concerns of consumers is also a predatory practice that requires regulation.

Consumers should be aware that the promise of the cheapest price is not always the best deal. The low price may be for an inferior product, and once a company has captured the market by offering low prices, there is nothing stopping it from charging what it wants once it has destroyed its competition, just as corporate giants did during the Gilded Age.

Jim Palermo