With the FTC expected to issue a decision regarding CVS Health’s $12 billion acquisition of long term care pharmacy provider Omnicare at any moment now, let’s consider what is at stake. Following their acquisition of Target’s retail pharmacy and clinic business for $1.9 billion in June, two companies — CVS Health and Walgreens — now operate nearly 18,000 U.S. pharmacies generating roughly 40% of all industry revenue. Put another way, two companies now operate nearly as many pharmacies as all the small business and independent pharmacies in the United States.

The implications of this are significant and potentially devastating for America’s smaller communities, its small businesses and its consumers, due to the interrelationship between pharmacy concentration and the workings of Medicare Part D program. At its core, Medicare Part D was designed to control costs through competition free of governmental interference. Prescription drug plans were expected to compete on costs, pharmacy networks and formularies to attract beneficiaries. The logic in this design seemed straightforward: the plans that can negotiate the best possible deals to provide the best overall value will attract the most beneficiaries. When this structure was written into the law, retail pharmacies, mail-order pharmacies, pharmacy benefit managers and the insurance companies offering Part D plans were largely distinct, separate companies.

The industry has changed considerably since then. CVS Health now operates every step in the supply chain. They are able to create their own prescription drug plans operated by their own pharmacy benefit manager. With the largely unregulated “preferred” pharmacy networks now operating in 87% of Part D plans, such vertically integrated firms are able to steer beneficiaries to their own pharmacies where profit margins are highest. What’s more, they are able to shut out small business pharmacies from even participating in the preferred networks.

This is not producing the best possible outcomes for seniors. If a small business pharmacy is willing to fill the same prescription for the same price as a preferred pharmacy but is not allowed to, the plan is doing one of two things: restricting seniors access to the pharmacy of their choice, or not giving them the most competitive price on their plan, in turn raising costs for the federal government.

The financial impacts of market consolidation are clear in the Part D plans offered to seniors. In 2008, Medicare Part D offered 1,875 stand-alone prescription drug plans to the nation’s seniors. For 2015, the number of plans offered is down to 1,001 — the lowest number ever offered by the program — as sponsors have either consolidated their plans or dropped out of the market altogether.

The non-partisan Congressional Budget Office (CBO) has found this to be a costly development. In 2013, they stated that “as a plan becomes larger, it becomes less sensitive to competition.” In real terms, “the loss of four plan sponsors, as occurred between 2007 and 2010, is estimated to have cost the government between $27 million and $68 million each year.” Since 2010, another 575 plans have either been consolidated or left the Part D market altogether.

Beyond costs to the taxpayer, the CBO does not take into account the costs to seniors and small businesses in under-serviced areas that are often left behind without meaningful access to CVS, Walgreens, and other big chains.

While this is all concerning, perhaps the biggest red flag of all may be the comments and actions of CVS Health and Walgreens’ closest competitors and their implications for the retail pharmacy industry.

Rite Aid, the fourth largest pharmacy chain, collected more than $18 billion in retail pharmacy revenue at their 4,600 stores in 2014. Their revenue represents more than 8% of all retail pharmacy revenue behind only CVS Health, Walgreens and Walmart. But in their annual report filed with the Securities and Exchange Commission, they express concerns often attributed to small business pharmacies, saying “we may not be able to effectively compete against them because our existing or potential competitors may have financial and other resources that are superior to ours.” They caution that “the ability of our stores to achieve profitability depends on their ability to achieve a critical mass of loyal, repeat customers.”

Discussing their pharmacy business’s acquisition by CVS Health, Target CEO Brian Cornell suggested that the deal would reduce Target’s annual revenue by $4 billion. However, he also expected the deal to significantly reduce Target’s costs, which were high “because of the retailer’s lack of scale in the pharmacy business.” The message in all this is clear: you cannot beat them. Join them.

In the face of such pressures, consolidation amongst the big chain pharmacies becomes increasingly attractive.

Small businesses have faced the pressures expressed by Target and Rite Aid for years now, but for small business owners these pressures are magnified by a personal element. While the math of continuing in the pharmacy business may not add up and selling may be the “right” choice, they are compelled by more personal elements like keeping their business in the family, and serving the members of the community they know by name.

Small businesses are nearly a protected class in almost every branch of the federal government. As a whole, small businesses received more than 23% of federal contract revenue. These small business contracting programs sent over $48 billion to small businesses in 2014 from the Department of Defense alone. But the Centers for Medicare & Medicaid Services is one of a handful of federal agencies exempt from such requirements.

The Part D legislation grants the Secretary of Health & Human Services the authority to take a big step in the right direction by requiring plans to contract with small business pharmacies at rates consistent with small business programs in the wider federal government. This is a step the Secretary should take.

The federal government cannot lose sight of who the true beneficiaries of the Medicare program are: America’s seniors, not one or two highly consolidated corporations.