Regulators are shifting antitrust scrutiny in healthcare from market share and pricing toward how vertically integrated systems shape patient flow, access, and competitive dynamics, signaling deeper oversight of ecosystem design, strategic intent, and cumulative market influence.
Something fundamental has shifted in how regulators think about competition in healthcare.
For years, merger review followed a familiar script: define the market, measure share, and estimate price effects at the class of trade level. That approach is now being reworked.
The Federal Trade Commission (FTC) and Department of Justice (DOJ), through changes to the Hart-Scott-Rodino (HSR) premerger process, are signaling a broader rethink, one that looks beyond size and pricing toward how healthcare systems actually function.
For pharmaceutical executives, this is more than a regulatory update. It reflects a deeper shift in how power is defined and scrutinized across the healthcare landscape.
At the center of this shift is a growing discomfort with vertically integrated models. Organizations such as CVS Health, which have combined insurance, pharmacy benefit management, retail dispensing, and provider services, are no longer viewed only through the lens of efficiency.
Increasingly, they are being examined for the degree of control they exert over the patient journey. Regulators have been explicit about why change is needed.
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In their view, the legacy HSR framework left important gaps. It often failed to capture how modern, interconnected healthcare organizations operate and how those structures shape competition in ways traditional metrics miss.
The traditional antitrust model was built for a different era, one defined by clearly bounded product markets and price-based competition. Healthcare no longer fits that mold.
The updated HSR requirements ask companies to provide more than numbers. They require explanations, why a deal is happening, how the combined entity will operate, and what competitive dynamics may change.
Internal documents, including board materials and strategic analyses, are now part of the review process. This shift moves scrutiny earlier.
Instead of relying on lengthy second-stage investigations, regulators are aiming to identify risks during the initial review window. The implication is clear: understanding how a system is designed is essential to predicting how it will behave.
The key question is no longer simply how large a company is. It is how much influence it has over the flow of care.
Few companies illustrate this shift more clearly than CVS Health. What began as a retail pharmacy business has evolved into a broad healthcare platform linking insurance coverage, benefit design, pharmacy services, primary care, and home-based care.
Individually, each component serves a distinct purpose. Together, they form a system capable of shaping multiple points along the patient journey, from coverage decisions to prescribing, dispensing, and follow-up care.
For years, this kind of integration was justified as a way to reduce fragmentation and improve coordination. Those arguments still hold in many cases.
But regulators are now asking a different question: when does coordination begin to look like control? CVS is not alone in this trajectory.
UnitedHealth Group has built a similarly integrated model through its Optum platform, while Amazon, through its acquisition of One Medical and expansion into pharmacy, is also moving toward a more connected care model. These developments suggest that regulators are responding not to a single company, but to a broader structural shift toward vertically integrated healthcare ecosystems.
One way to understand this shift is to focus on what might be called patient flow. In a vertically integrated system, the same organization can influence several critical steps:
Individually, these decisions may appear routine. Taken together, they shape the patient’s path through the healthcare system.
The updated HSR framework places greater emphasis on these connections. Companies are expected to explain how different parts of their business interact, how formularies are structured, how referrals are managed, and how incentives align across the organization.
This reflects a broader reality: value in healthcare is not realized at approval, but across a sequence, coverage, prescribing, fulfillment, and adherence. The same structures that enable coordination can also influence which options are visible, accessible, or preferred.
That is where competition concerns begin to emerge.
Another important change is the role of internal documents. Companies are now required to submit materials that were once considered purely internal, board presentations, integration plans, and strategic analyses.
These documents often reference goals such as reducing leakage, improving retention, or capturing a greater share of patient value. From a business standpoint, this language is standard, but from a regulatory standpoint, it can take on new meaning.
If internal materials suggest that a transaction is designed to channel patients in particular ways or limit alternatives, they may be interpreted as evidence of competitive intent. In effect, how a company describes its strategy internally may now influence how that strategy is evaluated externally.
This creates a new layer of complexity for executives, where strategy, communication, and compliance are increasingly interconnected.
Regulators are also taking a broader view of market evolution. Rather than assessing each transaction in isolation, they are examining patterns of acquisitions over time.
In healthcare, this is particularly relevant, as companies often build capabilities incrementally, adding services, data assets, and provider networks over several years. CVS’s growth reflects this type of stepwise integration.
The concern is not whether any single transaction is problematic, but whether the cumulative effect creates a system that is difficult for others to compete within. This represents a shift from transaction-level analysis to ecosystem-level scrutiny.
This broader perspective is reinforced by the FTC’s creation of a dedicated Healthcare Task Force. The task force is intended to monitor consolidation, pricing practices, and competitive dynamics across healthcare markets on an ongoing basis.
Its focus includes vertically integrated models, intermediary influence, and the role of data in shaping care delivery. The establishment of a specialized unit signals that healthcare is no longer treated as a routine sector within antitrust enforcement.
Instead, it is viewed as a complex system requiring sustained attention. For organizations operating across multiple points in the value chain, this reinforces an important reality: regulatory scrutiny is becoming both deeper and more continuous.
It extends beyond individual transactions to how business models function over time.
Although these developments are framed around mergers, their implications extend much further. Pharmaceutical companies operate within a system where large, integrated organizations increasingly influence access.
The evolving antitrust framework is likely to reinforce that dynamic. Large integrated customers may face greater scrutiny, potentially reshaping contracting and partnership models.
Access strategies, including formulary positioning, distribution design, and patient support programs, may be examined more closely when they intersect with integrated systems. At the same time, as data becomes more central to care coordination, the competitive implications of analytics and decision-making tools may draw increased attention.
There are also practical considerations. More detailed filings mean greater compliance burden, longer timelines, and increased uncertainty around transactions.
As with many policy changes, a balance must be struck between transparency and efficiency.
The legal status of the updated HSR framework remains in flux. While finalized and implemented, elements of the rule are being challenged, and the outcome is still uncertain.
But the broader direction is clear.
Regulators are placing greater emphasis on vertical integration, ecosystem design, and strategic intent. The final rules themselves were shaped by extensive industry feedback, reflecting an evolving dialogue rather than a one-sided mandate.
Even if specific provisions change, the underlying regulatory mindset is unlikely to reverse.
What is unfolding is not just a technical change to merger filings, it’s a shift in how competition itself is understood.
Markets are no longer defined solely by products—they are shaped by systems, by how care is organized, connected, and directed. For executives, this requires a broader perspective.
It is no longer enough to ask whether a strategy improves efficiency or reduces cost. It is equally important to consider how that strategy affects choice, access, and the overall functioning of the healthcare system.
The organizations that succeed in this environment will be those that can do both: build coordinated models of care and clearly demonstrate how those models enhance, rather than restrict, competition.
That is the challenge, and the opportunity, of this new antitrust era.
About the Author
Thani Jambulingam Ph.D. is a professor in food, pharma and healthcare at Erivan K. Haub School of Business, Saint Joseph’s University, Philadelphia. He is a pharma and healthcare strategist and his work focuses on AI-enabled decision frameworks, emerging technologies, and commercial strategy. He can reached at tjambuli@sju.edu.
