CVS Health has announced it will split into two companies, separating its retail pharmacy business from its insurance and pharmacy-benefit operations in a major reversal of the healthcare conglomerate it spent years assembling through acquisitions.
Under the plan, announced on Wednesday, one company will be called CVS Pharmacy and will contain the group’s roughly 9,000 retail pharmacies, its mail-order prescription business and its in-store clinics. The other company will retain the CVS Health name for now and will comprise the Aetna health insurance unit, the Caremark pharmacy-benefit manager, Oak Street Health clinics for older patients, home healthcare provider Signify Health and specialty drugs.
The separation is expected to be completed in the first half of 2028 and will be carried out as a tax-free transaction. Once it is complete, existing CVS Health shareholders will own shares in both companies, and both will be publicly traded.
Current chief executive David Joyner will lead the company that keeps the CVS Health name. Prem Shah, currently group president of CVS Health, will become chief executive of CVS Pharmacy. Joyner said the aim was to create two focused companies to improve consumer engagement, affordability and care coordination, from what he described as a position of strength.
The move comes amid growing scrutiny from lawmakers and regulators of vertically integrated healthcare companies — businesses that control several stages of the healthcare supply chain at once. Critics argue that owning both a pharmacy-benefit manager and a retail pharmacy chain can create conflicts of interest, limit competition and contribute to rising healthcare costs. CVS said a separation could also help address that regulatory scrutiny.
The economics of large US drugstore chains have become more difficult in recent years. CVS’s pharmacies face competition from Amazon and a shift towards prescription delivery that has reduced store visits, which traditionally generated additional retail purchases. Health insurers, meanwhile, have grappled with elevated medical costs as consumers use more healthcare services, prompting companies to raise premiums, trim benefits and exit less profitable plans.
The split unwinds a strategy built in large part on the roughly $78 billion purchase of health insurer Aetna in 2018. CVS had already explored a potential break-up in 2024, Reuters reported at the time, as it grappled with challenges across its businesses. Rival Walgreens took a similar path last year, selling its Boots pharmacy business and being acquired by private equity firm Sycamore Partners after a prolonged sale process.
The scale of the two halves underlines why the decision matters. CVS’s Pharmacy and Consumer Wellness segment, which includes its retail pharmacies, generated $139.4 billion in revenue in 2025. Its healthcare benefits segment reported revenue of $143.4 billion in 2025, while its pharmacy-benefit unit brought in $190.4 billion.
Shares rose 1.7% in premarket trading after the announcement, and Barclays analysts viewed the potential split positively, saying the timing was favourable as the pharmacy and consumer wellness business had returned to growth after years of underperformance.
Separately, CVS reported third-quarter results alongside the announcement. Per-share profit of $2.09 beat analysts’ average estimate of $1.65, according to data compiled by LSEG. The company also raised its annual adjusted profit forecast to at least $8.20, while maintaining a cautious view for the rest of the year in light of continued elevated medical cost trends and potential macroeconomic headwinds.
Note: the featured image is a file photo of a CVS Pharmacy in Charlton, Massachusetts, taken in February 2024, not a photograph of the announcement.
Sources: Reuters, “CVS Health to split in two, separating pharmacy business from insurance” (https://www.reuters.com/legal/transactional/cvs-health-split-two-separating-pharmacy-business-insurance-2026-11-04/)
