CVS Health plans to split into two publicly traded companies by the first half of 2028, separating its roughly 9,000 retail pharmacies from its insurance business and pharmacy benefit manager, Caremark. Existing shareholders will receive shares in both companies, unwinding a structure built around CVS’s acquisition of Aetna in 2018.
Two companies, distinct businesses
The insurance and pharmacy-benefit company will keep the CVS Health name and be led by current chief executive David Joyner. The retail business will operate as CVS Pharmacy, with Prem Shah, currently a group president at CVS Health, as its leader. The companies will trade separately; CVS has not yet announced additional leadership roles or board members.
The split divides the pharmacy chain from Caremark, which negotiates drug prices and manages prescription benefits for insurers and employers. CVS had combined those activities with Aetna’s insurance operations and other healthcare services. Its plan is a substantial reversal of that integrated model, assembled through acquisitions.
A reversal of the Aetna strategy
CVS bought insurer Aetna in 2018 for $78 billion. The acquisition helped create a company spanning retail pharmacies, insurance and pharmacy-benefit management. CVS now plans to separate the drugstores from the insurance and PBM businesses rather than keep those operations under one publicly traded company.
The planned insurance and PBM company will also include primary-care provider Oak Street Health, home-visit provider Signify Health and CVS’s specialty-drug business. That means the new CVS Health will remain a healthcare business with several operations, even as its retail pharmacies move into a separate company.
Both new companies are intended to have their own strategic focus. CVS has said separation should give each greater scope to innovate, adopt technology and improve efficiency, while also focusing on consumer engagement, affordability and care coordination.
What the businesses bring to the split
CVS’s pharmacy business recorded $37.66 billion in sales in 2025. Its insurance unit reported $36.29 billion in revenue, while the healthcare-services segment generated $51.24 billion. Those figures show the scale of the operations involved, though the planned company structure groups healthcare services with insurance and Caremark rather than with the standalone drugstores.
The breakup follows a strategic review by CVS’s board. The company had also considered separating its retail pharmacy and insurance businesses during a review in October 2024. The current plan arrives as Joyner’s turnaround effort includes store closures, leadership changes, a push to reduce Medicare Advantage costs and a goal of cutting $2 billion in expenses.
CVS shares have risen roughly 70% since Joyner became chief executive in October 2024, and the company’s market value reached $117 billion. The announced separation would therefore divide a business pursuing cost reductions while its chief executive oversees the insurance and PBM company that retains the CVS Health name.
Regulatory scrutiny adds pressure
PBMs have faced bipartisan scrutiny in Washington, D.C., and in state legislatures. Their role in negotiating drug prices and managing prescription benefits has drawn criticism over pricing transparency, market power and potential conflicts when a PBM shares an owner with an insurer and pharmacies.
Congress enacted PBM reforms in February, including changes to how PBMs are compensated under Medicare Part D. States have also increasingly moved to restrict PBMs from owning pharmacies. Separating CVS’s retail chain from Caremark would change the company’s ownership structure, but the two businesses would still operate in the same healthcare market.
Completion is not immediate
CVS expects to complete the separation in the first half of 2028. Until then, CVS Health remains the parent company, and existing shareholders will have to wait for the planned distribution of shares in both businesses. CVS has yet to announce additional leadership appointments or board members for the separated companies.
Sources
- cnbc.com — “CVS to split off drugstore business”
- stocktitan.net — “CVS Health (CVS) Earnings Bring a Drugstore Split Plan as Aetna Leads”
- Reuters — “CVS will split up its pharmacy and insurance business into two companies, WSJ says”
- sg.finance.yahoo.com — “CVS Health to split in two, separating pharmacy business from insurance”
- wsj.com — “CVS Will Break Off Its Namesake Pharmacies – WSJ”