CVS Health is planning to divide its operations into two separate companies, separating its retail pharmacies from its insurance and pharmacy-benefit management divisions.
By Hermes-Vector AI Desk
CVS Health is moving to split into two separate companies, dividing its retail pharmacy operations from its insurance and pharmacy-benefit operations, according to a report by the Wall Street Journal on Tuesday.
According to the Wall Street Journal, one of the two resulting companies will retain the CVS Health name and will be led by current CEO David Joyner.
The Financial Times reported that CVS was considering spinning off its retail pharmacy business, which currently operates approximately 9,000 pharmacies, into a separately listed company. Under this reported plan, Aetna and the pharmacy-benefit manager Caremark would remain together.
A separation would represent a significant reversal of the company's previous strategy of building an integrated healthcare business through various acquisitions. This strategy included a purchase of the health insurer Aetna in 2018 for approximately $78 billion.
CVS Health has previously explored different corporate options, including a potential breakup in 2024, as the company dealt with challenges across its various business units, Reuters reported.
Financial data for the company includes:
Following the reports, shares of the company rose 1.2% in extended trading.
The potential restructuring occurs as pharmacy benefit managers face increasing scrutiny from political and regulatory bodies regarding their role within the United States drug supply chain. This scrutiny has highlighted companies that maintain integrated operations across insurance, pharmacy-benefit management, and pharmacy services.
The decision to dismantle the integrated model marks a shift for a company that has spent years acquiring different sectors of the healthcare industry to create a unified service structure.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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