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MARK AUSTIN THOMAS: AmerisourceBergen and Kindred Healthcare are merging. They're combining parts of their companies which provide drugs to institutions like nursing homes. Helen Palmer from the Health Desk at WGBH says this could be good news for boomers.

HELEN PALMER: Analysts say that institutional pharmacy suppliers will become increasingly important as the baby boomers age.

That's because we're a demanding demographic, and more services will be delivered in nursing home or home care settings.

This merger will create a powerful specialist supplier able to compete with market leader Omnicare.

Pharmaceutical analyst David Webster says patients will be the winners.

DAVID WEBSTER: The consumer's going to get better service and because of the competition, pricing is not going to accelerate as fast.

Webster says the new Medicare Drug benefit, with millions coming from the taxpayer, also drove this consolidation.

The merger should cut costs by $30 million and the combined company expects to earn nearly $2 billion a year.

In Boston, I'm Helen Palmer for Marketplace.