Target opening CVS pharmacies in stores is scary news for consumers

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CVS Acquires Target's Pharmacies and Clinics

This week, CVS is opening its first pharmacy inside a Target store.

Over the next six to eight months, all 1,660 of Target's pharmacy locations will become CVS-branded units. Additionally, the discount retailer's 80 in-store health clinics will rebrand as CVS MinuteClinic locations.

When CVS announced its $1.9 billion acquisition of Target's pharmacy business in June, many worried it could set off a series of similar partnerships as cost pressures hurt profits at grocery-store pharmacies. In October, Walgreens and Rite Aid — the second- and third-largest pharmacy chains in the US, after No. 1 CVS — announced a $9.4 billion merger.

While these acquisitions may help the bottom line at companies, it could be bad news for shoppers.

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CVS acquired Target's pharmacy business for $1.9 billion:

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Target opening CVS pharmacies in stores is scary news for consumers
SAN BRUNO, CA - JUNE 15: A sign is posted on the exterior of a Target store on June 15, 2015 in San Bruno, California. CVS Health announced that it has agreed to acquire Target's pharmacy and clinic businesses for an estimated $1.9 billion. (Photo by Justin Sullivan/Getty Images)
SAN FRANCISCO, CA - JUNE 15: A pedestrian walks by a CVS store on June 15, 2015 in San Francisco, California. CVS Health announced that it has agreed to acquire Target's pharmacy and clinic businesses for an estimated $1.9 billion. (Photo by Justin Sullivan/Getty Images)
COLMA, CA - JUNE 15: A customer enters a Target store on June 15, 2015 in Colma, California. CVS Health announced that it has agreed to acquire Target's pharmacy and clinic businesses for an estimated $1.9 billion. (Photo by Justin Sullivan/Getty Images)
SAN FRANCISCO, CA - JUNE 15: A pedestrian walks by a CVS store on June 15, 2015 in San Francisco, California. CVS Health announced that it has agreed to acquire Target's pharmacy and clinic businesses for an estimated $1.9 billion. (Photo by Justin Sullivan/Getty Images)
COLMA, CA - JUNE 15: A customer loads packages into her car after shopping at a Target store on June 15, 2015 in Colma, California. CVS Health announced that it has agreed to acquire Target's pharmacy and clinic businesses for an estimated $1.9 billion. (Photo by Justin Sullivan/Getty Images)
SAN FRANCISCO, CA - JUNE 15: A pedestrian walks by a CVS store on June 15, 2015 in San Francisco, California. CVS Health announced that it has agreed to acquire Target's pharmacy and clinic businesses for an estimated $1.9 billion. (Photo by Justin Sullivan/Getty Images)
SAN BRUNO, CA - JUNE 15: Customers leave a Target store on June 15, 2015 in San Bruno, California. CVS Health announced that it has agreed to acquire Target's pharmacy and clinic businesses for an estimated $1.9 billion. (Photo by Justin Sullivan/Getty Images)
SAN FRANCISCO, CA - JUNE 15: A pedestrian walks by a CVS store on June 15, 2015 in San Francisco, California. CVS Health announced that it has agreed to acquire Target's pharmacy and clinic businesses for an estimated $1.9 billion. (Photo by Justin Sullivan/Getty Images)
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Mergers mean less competition in the market, which could lead to higher prices for consumers. If CVS and Walgreens acquire more pharmacy businesses, this effect could be even greater.

The mergers additionally significantly reduce competition in the retail clinic business, reports the Washington Post's Ariana Eunjung Cha. The acquisitions combine the No. 1 provider of retail clinics (CVS MinuteClinic) with the No. 5 provider (Target), as well as the No. 2 provider (Walgreens) with No. 6 (Rite Aid).

Generally, more competition means lower prices for consumers.

The Post also notes that the deals could result in conflicts of interest.

"Some analysts worry that medical professionals staffing retail clinics could face pressure to overprescribe in order to boost their employers' bottom lines," Cha writes.

Target and CVS maintain that the change will simply increase convenience and accessibility for consumers.

"Our heart is in every prescription we fill, and providing accessible, supportive and personalized health care is part of our DNA," Helena Foulkes, the president of CVS Pharmacy, wrote on CVS Health's website on Wednesday. "On behalf of all of us at CVS Health, I am delighted to invite Target guests to experience our innovative pharmacy care services and unique digital offerings."

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