CVS Health plans to separate into two publicly traded companies by the first half of 2028, according to the announcement described in the report. The proposal would separate its approximately 9,000 retail pharmacies from its insurance and pharmacy benefit management businesses.
The restructuring would reverse the integrated business model established through CVS’s $78 billion acquisition of Aetna in 2018. CVS said its board reached the decision following a comprehensive strategic review.
Under the plan, Aetna and pharmacy benefit manager Caremark would remain within CVS Health, alongside Oak Street Health, Signify Health and the specialty drug business. Chief Executive David Joyner would lead that company. Prem Shah, currently CVS Health’s group president, would lead the separate CVS Pharmacy business. Existing shareholders would receive shares in both companies.
CVS said separate companies would have more focused strategies and greater flexibility to adopt technology and improve efficiency. The announcement comes amid a turnaround program involving $2 billion in planned cost reductions, store closures, management changes and efforts to control Medicare Advantage expenses.
The company previously considered a breakup in 2024. Leerink Partners analyst Michael Cherny described the latest plan as unexpected, while noting improved retail pharmacy performance, market share gains and stabilizing margins. He suggested those conditions could strengthen the prospects for an independent pharmacy company.
Cherny also identified legislative scrutiny of vertical integration as a possible factor. Pharmacy benefit managers, which negotiate drug prices and administer prescription benefits, face bipartisan criticism over pricing transparency, market concentration and potential conflicts arising from common ownership with insurers and pharmacies.
The report notes federal reforms affecting PBM compensation under Medicare Part D and state efforts to restrict pharmacy ownership by PBMs. CVS said additional leadership appointments and board members would be announced later. The proposed separation would reshape the company’s operations across several healthcare markets.