United States v. Anthem, Inc.

Concurring opinion filed by Circuit Judge MILLETT.

Dissenting opinion filed by Circuit Judge KAVANAUGH.

This expedited appeal arises from the government’s successful challenge to “the largest proposed merger in the history of the health insurance industry, between two of the four national carriers,” Anthem, Inc. and Cigna Corporation. Appellees Br. 1. In July 2015, Anthem, which is licensed to operate under the Blue Cross Blue Shield brand in fourteen states, reached an agreement to merge with Cigna, with which Anthem competes largely in those fourteen states. The U.S. Department of Justice, along with eleven States and the District of Columbia (together, the “government”), filed suit to permanently enjoin the merger on the ground it was likely to substantially lessen competition in at least two markets in violation of Section 7 of the Clayton Act. Following a bench trial, the district court enjoined the merger, rejecting the factual basis of the centerpiece of Anthem’s defense, and focus of its current appeal, that the merger’s anticompetitive effects would be outweighed by its efficiencies because the merger would yield a superior Cigna product at Anthem’s lower rates. The district court found that Anthem had failed to demonstrate that its plan is achievable and that the merger will benefit consumers as claimed in the market for the sale of medical health insurance to national accounts in the fourteen Anthem states, as well as to large group employers in Richmond, Virginia.

Anthem and Cigna (hereinafter, Anthem) challenge the district court’s decision and order permanently enjoining the merger on the principal ground that the court improperly declined to consider the claimed billions of dollars in medical savings. See Appellant Br. 10.1 Specifically, Anthem maintains the district court improperly rejected a consumer welfare standard — what it calls “the benchmark of modern antitrust law,” id. — and generally abdicated its responsibility to balance likely benefits against any potential harm. Ac*349cording to Anthem, the merger’s efficiencies would benefit customers directly by reducing the costs of customer medical claims through lower provider rates, without harm to the providers. The government has not challenged Anthem’s reliance on an efficiencies defense per se. Rather, it points out that Anthem neither disputes that the merger would be anticompetitive but for the claimed medical cost savings, nor challenges the district court’s findings on the relevant market definition, ease of entry, the effect of sophisticated buyers, or innovation. Instead, Anthem’s appeal focuses principally on factual disputes concerning the claimed medical cost savings, which the government maintains were not verified, not specific to the merger, and not even real efficiencies.

For the following reasons, we hold that the district court did not abuse its discretion in enjoining the merger based on Anthem’s failure to show the kind of extraordinary efficiencies necessary to offset the conceded anticompetitive effect of the merger in the fourteen Anthem states: the loss of Cigna, an innovative competitor in a highly concentrated market. Additionally, we hold that the district court did not abuse its discretion in enjoining the merger based on its separate and independent determination that the merger would have a substantial anticompetitive effect in the Richmond, Virginia large group employer market. Accordingly, we affirm the issuance of the permanent injunction on alternative and independent grounds.

I.

Under Section 7 of the Clayton Act, a merger between two companies may not proceed if “in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such [merger] may be substantially to lessen competition.” 15 U.S.C. § 18.

A burden-shifting analysis applies to consider the merger’s effect on competition. United States v. Baker Hughes Inc., 908 F.2d 981, 982 (D.C. Cir. 1990). First, the plaintiff must establish a presumption of anticompetitive effect by showing that the “transaction will lead to undue concentration in the market for a particular product in a particular geographic area.” Id. The most common way to make this showing is through a formula called the Herfin-dahl-Hirschman Index (“HHI”), which compares a market’s concentration before and after the proposed merger. See id. at 983 n.3. By squaring the market share percentage of each market participant and adding them together, a market’s HHI can range from >0 to 10,000 (i.e., a pure monopoly, or 1002). Dept. of Justice & Fed. Trade Comm’n, Horizontal Merger Guidelines § 5.3 & n.9 (Aug. 19, 2010) (the “Guidelines”). Under the Guidelines, a market will be considered highly concentrated if it has an HHI above 2500, and if the merger increases HHI by more than 200 points and results in a highly concentrated market, it “will be presumed to be likely to enhance market power.” Id. § 5.3. Although, as the Justice Department acknowledges, the court is not bound by, and owes no particular deference to, the Guidelines, this court considers them a helpful tool, in view of the many years of thoughtful analysis they represent, for analyzing proposed mergers. See Baker Hughes, 908 F.2d at 985-86.

The burden shifts, once the prima facie case is made, to the defendant to rebut the presumption. Id. at 982. To do so, it must provide sufficient evidence that the prima facie case “inaccurately predicts the relevant transaction’s probable effect on future competition,” or it must sufficiently discredit the evidence underlying the initial presumption. Id. at 991. “The more compelling the prima facie case, the more evi*350dence the defendant must present to rebut it successfully,” but because the burden of persuasion ultimately lies with the plaintiff, the burden to rebut must not be “unduly onerous.” Id.

Upon rebuttal by the defendant, “the burden of producing additional evidence of anticompetitive effect shifts to the [plaintiff], and merges with the ultimate burden of persuasion, which remains with the [plaintiff] at all times.” Id. at 983.

II.

Anthem is the second-largest seller of medical health insurance to large companies in the United States, and it serves approximately 38.6 million medical members. It is a member of the Blue Cross Blue Shield Association, a group of thirty-six health insurance companies licensed to do business under the Blue Cross and/or Blue Shield brands. Anthem holds an exclusive license to the Blue brands in all or part of fourteen states (the “Anthem states”), and it may also compete for business outside those states if it receives permission from the Blue licensee in the relevant area. Anthem also owns non-Blue subsidiaries through which it may operate both in and outside of the Anthem states, subject to Anthem’s “Best Efforts” obligations in its licensing agreement with the Blue Cross Association. Under these “Best Efforts” provisions, at least 80% of Anthem’s revenue within the Anthem states must come from Blue-branded products, as must at least 66.67% of its revenue nationwide. Failure to comply could result in termination of Anthem’s license, which would trigger a $2.9 billion fee to the Association.

Cigna, the third-largest seller of health insurance to large companies in the United States, serves approximately 13 million medical members nationwide and in more than 30 countries, in addition to offering other specialty products such as dental and vision insurance. Unlike Anthem, which has historically been able to leverage its size to negotiate steep discounts from providers, Cigna’s provider discounts have generally not been as good, so Cigna has developed a different and innovative value proposition in order to compete for customers. Under its more collaborative arrangements with providers, and through the integrated, customized wellness programs it offers its customers’ employees, Cigna’s focus is on reducing employees’ utilization of expensive medical procedures and promoting wellness through behavioral supports and lifestyle changes. This offers customers a different means of lowering health care costs than the traditional model relying heavily on provider discounts.

On July 23, 2015, Anthem reached an agreement to merge with Cigna. The merger would leave Anthem as the surviving company, with a controlling share of the merged company’s stock and a majority of seats on the merged company’s board of directors. Within the Anthem states, Cigna customers would be permitted to remain with Cigna, at least for the time being, but Anthem and Cigna would otherwise no longer compete with one another in those states. Outside the Anthem states, Cigna’s existing business would allow Anthem a bigger foothold to compete, subject to Anthem’s ' “Best Efforts” obligations. The merger agreement extends until April 30, 2017.

On July 21, 2016, the United States, along with California, Colorado, Connecticut, Georgia, Iowa, Maine, Maryland, New Hampshire, New York, Tennessee, Virginia, and the District of Columbia, sued to enjoin the merger. Relying on Section 7 of the Clayton Act, 15 U.S.C. § 18, plaintiffs alleged that the merger would substantially lessen competition in the market for the *351sale of health insurance to national accounts in both the Anthem states and the United States as a whole, as well as in the market for the sale of health insurance to large group employers in 35 local markets. Plaintiffs also alleged that the merger would substantially lessen competition for the purchase of services from healthcare providers in the 35 local markets by giving the combined company anticompetitive buying power.

Following a six-week bench trial, the district court permanently enjoined the merger on the basis of its likely substantial anticompetitive effect in the market for the sale of health insurance to national accounts in the Anthem states, as well as in the market for the sale of health insurance to large group employers m Richmond, Virginia. United States v. Anthem, Inc., No. CV 16-1493 (ABJ), — F.Supp.3d —, —, 2017 WL 685563, at *68 (D.D.C. Feb. 21, 2017). It first defined the relevant national accounts market, accepting the government’s proposed definition of “national account” as an employer purchasing health insurance for more than 5,000 employees across more than one state. It also found that the market properly included both fully insured and “administrative services only” (“ASO”) plans. Under a fully-insured plan, the employer pays for claims adjudication, access to the insurer’s provider network (including whatever discounted rates the insurer has negotiated), and coverage of the employees’ medical costs. Under an ASO plan, the employer pays for claims adjudication and network access, but the employer self-insures and thus takes on the risk of its employees’ medical costs. Finally, the district court found that the relevant geographic market for national accounts was the fourteen Anthem states, because that is where Anthem and Cigna currently compete most prominently, given the geographical restrictions imposed on Anthem under its Blue Cross license.

With the national accounts market so defined, the district court then found a presumption of anticompetitive effect based on the combined company’s market share. It determined that the merger would increase HHI by 537 to 3000, while the Guidelines threshold is an increase of 200 to 2500, resulting in a highly concentrated market. Guidelines § 10. It also noted that under any variation performed by plaintiffs’ expert the resulting numbers were still well over the presumptive Guidelines limits: considering only national accounts where 5% of employees reside in another state, HHI would increase 641 to 3124; considering only ASO customers with 5% out-of-state employees, HHI would increase 880 to 3675; and considering all ASO national accounts, HHI would increase 771 to 3663. Anthem objected that these calculations overstated Anthem’s market share by including all Blue customers even if they were not Anthem’s, but the district court found that this was appropriate. Anthem’s own internal calculations include these customers, and a key part of Anthem’s value proposition to customers is that they can access all non-Anthem Blue networks nationwide.

Next, the district court found that Anthem had provided sufficient evidence to rebut the government’s prima facie case. It relied on evidence that Anthem’s primary competitor for national accounts is United Healthcare, not Cigna; that national accounts tend to be sophisticated, well-informed customers and thus better able to thwart an attempted price increase; that new entrants to the market will constrain pricing; and that the combined company would have incentives to innovate in its collaborative care arrangements with healthcare providers.

*352Finally, the district court found that the merger’s overall effect in the Anthem states would be anticompetitive by reducing the number of national health insurance carriers from four to three. It rejected Anthem’s efficiencies defense, which posited the combined company would realize $2.4 billion in medical cost savings through its ability to (1) “rebrand” Cigna customers as Anthem in order for them to access Anthem’s existing lower rates; (2) exercise an affiliate clause in some of its provider agreements to allow Cigna customers access to Anthem rates; and (3) renegotiate lower rates with providers. First, it found that the claimed savings were not merger-specific because they were based on the application of rates that either company was already able to attain, and thus presumably each company could attain the other’s superior rates on its own. It also found that for Cigna customers that would be rebranded to Anthem, any related savings would not be merger-specific because Cigna customers could simply purchase the Anthem product today. It rejected the notion that the merger was necessary to allow Anthem customers access to Cigna’s popular product offerings because Anthem had failed to show that it could not develop and offer these products on its own. Second, the district court found that the claimed savings also failed because they were not sufficiently verifiable. It found that Anthem’s plan to exercise the affiliate clause in its provider contracts was unlikely to work as Anthem suggested. That is, exercise of the affiliate clause would likely give rise to provider resistance because the providers were unlikely to accept lower rates and provide more services without getting anything in return. The district court also found, as a matter of fact, that attempts to achieve the claimed savings through renegotiation of provider contracts would run into similar problems. It found that any savings would take- time to be realized, and that Anthem’s expert failed to account for utilization, i.e., the amount of medical services that would be consumed by a given customer. In sum, it found the claimed savings were aspirational inasmuch as every proffered strategy either floundered in the face of business reality or was achievable without the merger, or both. The district court also expressed doubt as to whether the type of efficiencies claimed by Anthem, which merely redistribute wealth from providers to Anthem and its customers rather than creating new value, are even cognizable under Section 7.

Additionally, with regard to the Richmond market for large group employers, the district court found a presumption of anticompetitive effect based, on the fact that Anthem and Cigna were the city’s first- and second-largest competitors, with a combined market share of between 64% and 78%. It found that Anthem rebutted the presumption by challenging the government’s calculations, pointing to additional competitors outside the Richmond area and claiming that Anthem customers in the Federal Employee Program skewed its Richmond market share. Overall, however, the district court credited the testimony of the government’s expert that even accepting all of Anthem’s claimed efficiencies, the merger would still have a net anticompetitive effect. Because Anthem had not shown that the remaining competition (or potential market entrants) could likely constrain a price increase by the combined company, it found that the merger should be enjoined on that additional basis as well.

III.

Our review of the district court’s decision whether to issue a permanent injunction under the Clayton Act is limited to determining whether there was an *353abuse of discretion. United States v. Borden Co., 347 U.S. 514, 518, 74 S.Ct. 703, 98 L.Ed. 903 (1954); see FTC v. H.J. Heinz Co., 246 F.3d 708, 713 (D.C. Cir. 2001) (“Heinz”). The district court’s conclusions of law are reviewed de novo, and its findings of fact must be affirmed unless clearly erroneous. Heinz, 246 F.3d at 713. If a finding of fact rests on an erroneous legal premise, then the court “must examine the decision in light of the legal principles [it] believe[s] proper and sound.” Id. (quoting Ambach v. Bell, 686 F.2d 974, 979 (D.C. Cir. 1982)).

A.

It is undisputed that the government met its burden to demonstrate a highly concentrated post-merger market, which would be reduced from four to just three competing companies. Anthem also does not dispute the definition of the national accounts market, nor that such a market will be even more highly concentrated post-merger. Anthem’s appeal instead hinges on the district court’s treatment of its efficiencies defense. The premise of its defense was explained by its expert, Mark Israel, Ph.D. According to Anthem, Dr. Israel quantified the medical cost savings that the combined company could achieve post-merger using a “best of best” methodology, based on the economic theory that the combined company, with its greater volume, would be able to obtain discount rates that are no worse than either of the companies could achieve separately. Using claims data from Anthem and Cigna, he calculated that the merger would generate $2.4 billion in medical cost savings through improved discount rates, 98% of which he predicted would be passed through to customers, the large national employers with which Anthem and Cigna contract. Of the $2.4 billion in claimed savings, Dr. Israel projected that $1,517 billion would result from Cigna customers accessing Anthem’s lower rates, while $874.6 million would result from Anthem customers accessing Cigna’s lower rates; when viewed in terms of self-insured versus fully-insured customers, the former would purportedly see $1,772 billion of the claimed $2.4 billion, while the latter would see $619.8 million. Using merger simulation models, he balanced these projected savings against potential anticompetitive effects from the loss of the rivalry between the two companies and found the savings easily outweighed any potential harm. See Appellant Br. 5-6. But, as Anthem tends to ignore, the government offered its own evidence and experts to challenge these conclusions, as we discuss below.

Despite, however, widespread acceptance of the potential benefit of efficiencies as an economic matter, see, e.g., Guidelines § 10, it is not at all clear that they offer a viable legal defense to illegality under Section 7. In FTC v. Procter & Gamble Co., 386 U.S. 568, 87 S.Ct. 1224, 18 L.Ed.2d 303 (1967), the Supreme Court enjoined a merger without any consideration of evidence that the combined company could purchase advertising at a lower rate. It held that “[possible economies cannot be used as a defense to illegality. Congress was aware that some mergers which lessen competition may also result in economies but it struck the balance in favor of protecting competition.” Id. at 580, 87 S.Ct. 1224. In his concurrence, Justice Harlan criticized this attempt to “brush the question aside,” and he “accepted] the idea that economies could be used to defend a merger.” Id. at 597, 603, 87 S.Ct. 1224 (Harlan, J., concurring). No matter that Justice Harlan’s view may be the more accepted today, the Supreme Court held otherwise, id. at 580, 87 S.Ct. 1224, and no party points to any subsequent step back by the Court.

*354Nor does our dissenting colleague, despite his wishful assertion that Procter & Gamble can be disregarded by this court because it preceded the “modern approach” adopted in cases like United States v. General Dynamics Corp., 415 U.S. 486, 94 S.Ct. 1186, 39 L.Ed.2d 530 (1974), and Continental T. V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 97 S.Ct. 2549, 53 L.Ed.2d 568 (1977). See Dis. Op. 375-77, 378-79. The Supreme Court made no mention of Procter & Gamble in General Dynamics, 415 U.S. 486, 94 S.Ct. 1186, and it cannot be read to have implicitly overruled the earlier decision because it did not involve efficiencies. See id. at 494-504, 94 S.Ct. 1186; see also 4A Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶ 976c2, at 115 (2016) (“Areeda & Ho-venkamp”) (distinguishing between an efficiencies defense and General Dynamics’ “competitive significance” defense). And whatever significance Continental T. V. may have in the area of vertical restraints on trade, 433 U.S. at 54-59, 97 S.Ct. 2549, it did not do the yeoman’s work that the dissent apparently ascribes to it here, for it did not involve efficiencies, mergers, or Section 7 of the Clayton Act. Even stranger is the dissent’s suggestion that our decision in Baker Hughes, 908 F.2d at 986, blessed an efficiencies defense, see Dis. Op. 376-77, because Baker Hughes did not concern efficiencies and, like Heinz, 246 F.3d at 720, it could not overrule Supreme Court precedent. Nor has this court even hinted, as the dissent proclaims, that General Dynamics overruled Procter & Gamble's efficiencies holding. See Baker Hughes, 908 F.2d at 988 (citing Procter & Gamble favorably); Heinz, 246 F.3d at 720 & n.18 (interpreting Procter & Gamble’s efficiencies holding). Put differently, our dissenting colleague applies the law as he wishes it were, not as it currently is. Even if “the Supreme Court has not decided a case assessing the lawfulness of a horizontal merger under Section 7 of the Clayton Act” since 1975, Dis. Op. 376, it still is not a lower court’s role to ignore on-point precedent so as to adhere to what might someday become Supreme Court precedent.

Despite the clear holding of Procter & Gamble, 386 U.S. at 580, 87 S.Ct. 1224, two circuit courts, and our own, have subsequently recognized the use of efficiencies evidence in rebutting a prima facie case. Heinz, 246 F.3d at 720 (citing, inter alia, FTC v. Tenet Health Care Corp., 186 F.3d 1045 (8th Cir. 1999); FTC v. Univ. Health, Inc., 938 F.2d 1206 (11th Cir. 1991)); see also ProMedica Health Sys., Inc. v. FTC, 749 F.3d 559, 571 (6th Cir. 2014). The Eighth Circuit, in holding that the government had produced insufficient evidence of a well-defined market, acknowledged that the district court may have properly rejected the efficiencies defense, while observing evidence of enhanced efficiencies should be considered in the context of the competitive effects of the merger. Tenet Health Care Corp., 186 F.3d at 1053-55. The Eleventh Circuit similarly concluded that whether an acquisition would yield significant efficiencies in the relevant market is “an important consideration in predicting whether the acquisition would substantially lessen competition,” University Health, Inc., 938 F.2d at 1222, while noting both that “[i]t is unnecessary ... to define the parameters of this defense now,” and that “it may further the goals of antitrust law to limit the availability of an efficiency defense,” id. at 1222 n.30. Other circuits have remained skeptical and simply assumed efficiencies can rebut a prima facie case, before finding that the merging parties had not clearly shown the merger would enhance rather than hinder competition. See, e.g., FTC v. Penn State Hershey Med. Ctr., 838 F.3d 327, 348 (3d Cir. 2016); *355Saint Alphonsus Med. Ctr.-Nampa, Inc. v. St. Luke’s Health Sys., Ltd., 778 F.3d 775, 790 (9th Cir. 2015). These very recent decisions put to rest the dissent’s notion that “no modern court” recognizes the continued viability of Procter & Gamble, see Penn State Hershey Med. Ctr., 838 F.3d at 348; Saint Alphonsus Med. Ctr., 778 F.3d at 789, while even á cursory reading of the court’s opinion today puts to rest any suggestion that it “espouses the old ... position that efficiencies might be reason to condemn a merger.” Dis. Op. 379 (emphasis added) (quoting Ernest Gellhorn et al., Antitrust Law and Economics in a Nutshell 463 (5th ed. 2004)).

“Of course, once it is determined that a merger would substantially lessen competition, expected economies, however great, will not insulate the merger from a [Ejection 7 challenge.” Univ. Health, 938 F.2d at 1222 n.29. Notably, Professors Ar-eeda and Hovenkamp have observed that “Congress may not have wanted anything to do with an efficiencies defense asserted by a firm that was already large or low cost within the market and to whom the efficiencies would give an even greater advantage over rivals.” Areeda & Hovenkamp, supra, ¶ 950f, at 42; id. ¶ 970c, at 31. As our subsequent analysis shows, this court, like our sister circuits, can simply assume the availability of an efficiencies defense to Section 7 illegality because Anthem fails to show that the district court clearly erred in rejecting Anthem’s efficiencies defense.

This court was satisfied in Heinz, in view of the trend among lower courts and secondary authority, that the Supreme Court can be understood only to have rejected “possible” efficiencies, while efficiencies that are verifiable can be credited. 246 F.3d at 720 & n.18 (discussing 4 Phillip Areeda & Donald Turner, Antitrust Law ¶ 941b, at 154 (1980)). The issue in Heinz was whether under Section 13(b) of the Federal Trade Commission Act, 15 U.S.C. § 53(b), preliminary injunctive relief would be in the public interest. 246 F.3d at 727. The court held that the district court “failed to make the kind of factual findings required to render that defense sufficiently concrete to rebut the government’s prima facie showing,” id. at 725, and, upon weighing the equities, remanded for entry of a preliminary injunction. Id. at 726-27. The court expressly stated however: “It is important to emphasize the posture of this case. We do not decide whether ... the defendants’ claimed efficiencies will carry the day.” Id. at 727. These are not the issues in Anthem’s appeal from the grant of a permanent injunction. See LaShawn A. v. Barry, 87 F.3d 1389, 1393 (D.C. Cir. 1996) (en banc).

Consequently, the circuit precedent that binds us allowed that evidence of efficiencies could rebut a prima facie showing, Heinz, 246 F.3d at 720-22, which is not invariably the same as an ultimate defense to Section 7 illegality. Cf. generally Saint Alphonsus Med. Ctr., 778 F.3d at 789-90 (and authorities cited therein). In this expedited appeal, prudence counsels that the court should leave for another day whether efficiencies can be an ultimate defense to Section 7 illegality. We will proceed on the assumption that efficiencies as presented by Anthem could be such a defense under a totality of the circumstances approach, see Baker Hughes, 908 F.2d at 984-85 (citing General Dynamics, 415 U.S. at 498, 94 S.Ct. 1186), because Anthem has failed to show the district court clearly erred in rejecting Anthem’s purported medical cost savings as an offsetting efficiency. Guidelines § 10; cf. Heinz, 246 F.3d at 720-22. Additionally, because the district court could permissibly conclude that the efficiencies defense failed, because the amount *356of cost saving that is both merger-specific and verifiable would be insufficient to offset the likely harm to competition, this court has no occasion to decide whether the type of redistributional savings claimed here are cognizable at all under Section 7. It bears noting, though, that all of those other issues pose potentially substantial additional obstacles to this merger.

One further preliminary analytical point. Amici supporting Anthem invite the court to disregard the merger-specificity and verifiability requirements on the ground they place an asymmetric burden on merging parties that could doom beneficial mergers. See Br. for Antitrust Economists and Business Professors as Amicus Curiae in Support of Appellant and Reversal (“Amici Economists”) at 5-7. Anthem itself has not adopted this argument. See Burwell v. Hobby Lobby Stores, Inc., — U.S. —, 134 S.Ct. 2751, 2776, 189 L.Ed.2d 675 (2014); Eldred v. Reno, 239 F.3d 372, 378 (D.C. Cir. 2001). We note, however, that Amici Economists misapprehend the nature of Anthem’s claimed efficiencies as “direct price reductions,” id. at 6-7, rather than as potential price reductions subject to a number of uncertainties. For customers to realize any price reduction, Anthem would first have, to succeed in reducing providers’ rates, and to that extent the purported reductions would not be a direct effect of the merger. By contrast, the merger would immediately give rise to upward pricing pressure by eliminating a competitor, see, e.g., Tr. 960:12-18, and Anthem could unilaterally raise its prices in response. Further, Amici Economists ignore that fully-insured customers, and potentially self-insured customers depending on the terms of their contracts with Anthem, will not see any savings until Anthem takes a second action, renegotiating the customers’ contracts to pass through the savings. This illustrates the reason for the verifiability requirement: Perhaps Anthem is certain to take those actions, and there will be no impediments to the savings’ realization, but that showing is still necessary for a court to conclude that the merger’s direct effect (upward pricing pressure) is likely to be offset by an indirect effect (potential downward pricing pressure). See Guidelines § 10. As for merger-specificity, Amici Economists point to no logical flaw in the policy that consumers should not bear the loss of a competitor if the offsetting benefit could be achieved without a merger. See Heinz, 246 F.3d at 722.

B.

Any claimed efficiency must be shown to be merger-specific, meaning that it “cannot be achieved by either company alone because, if [it] can, the merger’s asserted benefits can be achieved without the concomitant loss of a competitor.” Heinz, 246 F.3d at 722. The Guidelines frame the issue slightly differently: an efficiency is said to be merger-specific if it is “likely to be accomplished with the proposed merger and unlikely to be accomplished in the absence of either the proposed merger or another means having comparable anticompetitive effects.” Guidelines § 10. Anthem faults the district court for considering whether the efficiencies “could” be achieved absent the merger, without regard to likelihood, Appellant Br. 24, even though in Heinz, 246 F.3d at 722, this court spoke repeatedly in terms of possibility (“can” or “could”).

Heinz, 246 F.3d at 721-22, cited the Guidelines with approval in describing the standard for merger-specificity. Both the current and then-current Guidelines refer to “practical” alternatives to achieving the efficiency short of merger, alternatives that are more than “merely theoretical.” Guidelines § 10 (2010); Guidelines § 4 *357(1997). Similarly, in Heinz, 246 F.3d at 722, the court considered whether it was practical for the company to obtain better baby food recipes by investing more money in product development, or whether that would cost more money than the merger itself. The real question is whether the alternatives to merger are practical and more than merely theoretical, see id.; Guidelines § 10. Even assuming there is any difference between the two standards, it would not affect the outcome here on this factual record. Viewed under either articulation, certain of Anthem’s claimed efficiencies fall away.

The crux of Anthem’s argument regarding merger-specificity is the theory that the combined company will allow Anthem to create a “new product” that is “unavailable on the market today”: a product that features both “Cigna’s customer-facing programs” and Anthem’s “generally lower ... rates.” Appellant Br. 26. One way Anthem maintains the merger will result in this new product is through reb-randing. According to Anthem, “rebrand-ing means [the combined company] retain[s] the Cigna product but brand[s] it under the Anthem name with Anthem’s negotiated provider rates.” Appellant Br. 34. The record, however, refutes rather than substantiates Anthem’s proposed reb-randing approach. In fact, the record evidence Anthem cites for its rebranding plan is the testimony of Anthem Senior Vice President Dennis Matheis. But in that testimony, Matheis confirmed that, at least “[i]n the short term,” rebranding would simply involve Anthem “offer[ing] Cigna customers Anthem p