CVS Health to split into two companies separating pharmacy and insurance

CVS Health announced on Wednesday that it will split into two separate companies, separating its retail pharmacy business from its insurance and pharmacy-benefit management operations. The company expects the separation to be completed in the first half of 2028.

Structure of the Split

According to reports from the Wall Street Journal cited by Reuters and other outlets, the two companies will both be publicly traded. The division of assets is planned as follows:

• CVS Health: This company will retain the original name and be led by current CEO David Joyner. It will include the insurance and pharmacy-benefit management (PBM) units, Oak Street Health's primary care clinics, the home health visit company Signify Health, and the company's specialty-drug business.
• CVS Pharmacy: This second company will include mail-order pharmacy, retail drugstores, and the MinuteClinic chain. Prem Shah, a group president of CVS Health, will serve as the CEO of CVS Pharmacy.

Upon completion of the separation, CVS Health shareholders will own shares in both companies.

Business Context and Drivers

CVS Health has spent years building a vertically integrated healthcare conglomerate through acquisitions, including a roughly $78 billion purchase of health insurer Aetna in 2018. This move reverses the company's long-term strategy of combining retail pharmacy, health insurance, and PBM services under one roof.

David Joyner stated, “From a position of strength, and a focus on the long term, we plan to create two focused companies to improve consumer engagement, affordability, and care coordination.” He also told the Wall Street Journal, “We believe based off of where we are and how we're performing, the businesses are best served by splitting.”

Industry analysts have noted several factors impacting the company's segments:

• Pharmacy Pressures: Retail drugstores face competition from Amazon and a shift toward prescription delivery, which has reduced in-store visits.
• Insurance Costs: Health insurers have dealt with elevated medical costs as consumers increase their use of healthcare services.
• Regulatory Scrutiny: Lawmakers and regulators have expressed concerns regarding vertically integrated healthcare companies, specifically regarding potential conflicts of interest and their influence over prescription drug prices.

Financial Performance

In its third-quarter results, CVS reported a per-share profit of $2.09, which exceeded analysts' average estimate of $1.65. The company raised its annual adjusted profit forecast to at least $8.20, though it maintained a cautious view for the remainder of the year due to elevated medical cost trends and potential macro headwinds.

In 2025, the CVS Pharmacy & Consumer Wellness segment, which includes approximately 9,000 retail pharmacies, generated $139.4 billion in revenue. The healthcare benefits segment reported $143.4 billion in revenue, while the PBM unit brought in $190.4 billion.

---

Sources

• kfgo.com: CVS Health to split in two, separating pharmacy business from insurance | The Mighty 790 KFGO | KFGO
• wtvbam.com: CVS tests breakup of retail, insurance businesses, source says | WTVB | 1590 AM · 95.5 FM | The Voice of Branch County
• turnto10.com: Report: CVS explores splitting pharmacy, insurance businesses
• centraloregondaily.com: CVS will split up its pharmacy and insurance business into two companies, WSJ says | Consumer | centraloregondaily.com

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.