Corporations Are Pretending to Reform Themselves

While everyone was refreshing early election returns and exit polls and turnout models on Tuesday, something very unusual happened: A monopolist broke itself up. Health conglomerate CVS, the seventh-largest U.S. company by revenue, decided to split off its consumer-facing in-store and mail-order pharmacy business from its Aetna insurance and Caremark pharmacy benefit management (PBM) side. When asked about it on CNBC, CVS chair and CEO David Joyner said that government regulatory pressure played a role. “What you see in the regulatory environment is clearly one of the things that we need to make sure we’re navigating,” Joyner said.

This is not, however, an unalloyed victory over the forces of capital—and if you dig into the fine print, it’s not much of a victory at all. The CVS Health arm, composed of Aetna and Caremark, is still a huge company, and it will also keep its specialty pharmacy business, which dispenses typically complex and high-cost medications. Specialty pharmacies like this account for around 40 percent of total pharmacy revenues, according to Stacy Mitchell of the Institute for Local Self-Reliance. Jettisoning the low-margin and underinvested CVS stores may just be a way to chop off the lowest-performing segment of the company.

More important, Mitchell adds, the linkages between CVS Health and what will now be called CVS Pharmacy would be preserved in “commercial agreements.” That means that CVS Health could still prod Caremark to steer its patients to pick up medications at CVS pharmacies, for example.

So this is more like a breakup in name only, with all the conflicts of interest and impositions of market power still apparent. Why, then, are they doing it? For one, CVS is trying to sidestep Arkansas and Tennessee, which passed bans on any company simultaneously operating a pharmacy and a PBM. (Specialty pharmacies weren’t included in the ban, which is why that’s staying with CVS Health.) These laws have been mired in litigation, but the breakup makes it easy for CVS to say that there is now no case or controversy.

At a deeper level, CVS anticipated the election results and the growing anger over corporate dominance of health care. There’s a bill in the Senate that’s much like the Arkansas and Tennessee breakup laws, from bipartisan authors Elizabeth Warren (D-MA) and Josh Hawley (R-MO). It was time, the company judged, to offer an olive branch, albeit a cheap plastic one made in China.

What we’re seeing here is corporate backpedaling. Big business got in bed with the Trump administration from the opening bell of the inauguration. They gave millions to his vanity projects and tolerated his schemes, hopeful for tax cuts and deregulation. What they ended up with were chaotic tariffs that changed almost daily, and a series of stupid decisions at home and abroad that angered the public, who just gave Democrats the biggest midterm electoral swing since Watergate.

Now, the business world has a problem: They’re about to be drowning in subpoenas from oversight committees and questions about their dalliances with the Trump administration. If it gets really bad, they will see new legislation designed to impact their profits, and a finger-in-the-wind Donald Trump might just abandon them too.

CVS, in expectation of all this, tried to fake out the political system with an insta-breakup. Fortunately, not everybody bought it. “This CEO is not fooling us,” Sen. Warren said on social media. “This lets CVS continue to own a massive conglomerate and rip people off.”

But Warren is pretty well attuned to this type of stuff. Will the Democratic leadership, the ones controlling the legislative calendar, pronounce themselves satisfied with the likes of CVS and other corporations that offer up half measures and pretend reforms? That’s a big question for the next couple of years.

In the meantime, expect a lot more backpedaling. Here’s another example: Big Tech firms like Microsoft, Amazon, Meta, Google, Anthropic, Nvidia, and Oracle are in consultation with environmental groups as part of a “Responsible Data Center Development Collaborative” that is seeking to build a framework for how to proceed with their data centers. The framework would set a standard of “emissions-free energy” and “community support” for data center projects.

Like the CVS breakup, this is an example of how corporate America thinks they can manage the government: pre-negotiate an agreement and send it to Congress fully formed, in the hope that the new session will just back off. This strategy often works—that’s why it’s done. In this case, people aren’t just mad about data centers because they use fossil fuels or because people aren’t getting enough of a cut of the profits of AI. They’re mad about their communities’ loss of control, and their exclusion from the circles that decide their future. An enviro nonprofit agreement isn’t going to satisfy that. Hyperscalers and their Wall Street financiers know they are in trouble because of election results in Texas, Ohio, and Georgia, and they’re negotiating to limit the damage.

The core question is whether Democrats will be more easily snookered by such “solutions” than the public, whose lives have been getting harder while corporations have earned historically high profits for more than a decade.

There are some signs they won’t. Democrats like Sen. Warren have called for an investigation of private listings in the homebuying market and other anti-competitive tactics by dominant real estate firms like Zillow. The report that Warren co-authored with Rep. Becca Balint (D-VT), the likely incoming chair of the House Antitrust Subcommittee, on the pay-to-play corruption in Trump’s antitrust enforcement agencies signals a clear-eyed approach. And incoming House Oversight Committee chair Robert Garcia (D-CA) has signaled that corporate corruption would be among his highest priorities.

When I asked Rep. Pramila Jayapal (D-WA) about the CVS breakup and whether Democrats would be satisfied by these pre-emptive moves, she replied that “I do think this is an issue that across the ideological caucuses is really important, and we are going to continue to push.”

What’s not clear is whether the House and Senate leadership will fully internalize that the people who voted them into power did so on the promise that their problems would be solved, and whether they realize that those problems run right through corporate America. There is a consolidation spree happening right now in this country, as companies realize that the Trump administration has sold antitrust enforcement to the highest bidder. DoorDash is buying Instacart to expand its delivery empire; O’Reilly is buying NAPA to dominate auto parts retail; Expedia is using its power to force higher prices for hotels; and a major utility merger between Nextera and Dominion would surely raise electricity prices.

Does Wall Street think Democrats are going to show any fire? Stocks actually climbed on Wednesday after the election, on the hopes that the Iran war would swiftly end as a result. But all of those gains were given back on Thursday, amid fears about an AI bubble that might pop, and to some extent that the data center buildout will be fatally compromised. At least for now, there is a fleeting expectation that Democrats could really rein in the oligarchical state.

With Trump in the White House for two more years, it’s reasonable to say that anything decent coming out of Washington will be strangled. But given the increasing number of states that will now have Democratic governments, sending angry letters and waiting around for a company to break itself up is not going to work for a population that just delivered such a stunning victory. Look at New York Attorney General Letitia James, who recently forced the sale of a ski resort to a new owner, after all resorts in the upstate region were owned by one company. That’s a model for what vigilant Democrats can do on the state level, and what they can aspire to in Congress.

Elections can have meaning beyond who gets the gavels and the fancy offices. They can lead to shifts in how the economy and society work and who benefits—if the victorious party so chooses. Alternatively, congressional leaders can comfort themselves with the fiction that corporations will preemptively give up their power. The correct terminology for that concept is wishful thinking.