CVS to Separate Retail Pharmacies From Insurance and Caremark Businesses
CVS Health plans to split into two publicly traded companies by the first half of 2028, reversing its $78 billion acquisition of Aetna and dismantling the vertically integrated healthcare group built around it in 2018. The plan would separate roughly 9,000 retail pharmacies from the insurance business and Caremark, one of the three largest pharmacy benefit managers in the United States.
The insurance and PBM company would keep the CVS Health name and be led by CEO David Joyner. The retail business, to be called CVS Pharmacy, would be led by Prem Shah, currently group president. Existing shareholders would receive stakes in both companies. CVS said the separation should give each business a more focused strategy, while improving efficiency, technology adoption, affordability and care coordination.
The decision follows a board-led strategic review and comes as Joyner’s turnaround program makes progress through $2 billion in planned cost cuts, store closures, leadership changes and efforts to control Medicare Advantage costs. CVS shares have risen about 70% since Joyner became CEO in October 2024, giving the company a market value of roughly $117 billion. The breakup also arrives amid growing scrutiny of PBMs over pricing transparency, market power and conflicts of interest, including new federal reforms and state efforts to limit their ownership of pharmacies.
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