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CVS Health has announced plans to split into two distinct companies by early 2028. One company will focus on CVS Pharmacy, which includes approximately 9,000 retail locations, in-store clinics, and mail-order prescriptions. The other company, CVS Health, will manage Aetna Insurance, pharmacy benefit manager Caremark, and other service-oriented businesses. This decision marks a significant shift from CVS's previous strategy of vertical integration, which combined insurance, pharmacy, and healthcare services under one umbrella.
According to The Wall Street Journal, the split is a reversal of the $78 billion merger that initially brought CVS and Aetna together. CVS CEO David Joyner stated that the separation will allow each company to be more agile and competitive. Joyner emphasized that the decision was not driven by regulatory pressures but rather as a strategic evolution to enhance focus and flexibility.
Healthcare Dive reports that the split will create two publicly traded entities. CVS Health will include Aetna, Caremark, Oak Street Health, Signify Health, and CVS's specialty drug business. CVS Pharmacy will encompass retail stores, mail pharmacy operations, and MinuteClinic services. Joyner noted that commercial agreements will maintain synergies between the two companies.
The decision comes after CVS's retail pharmacy business has shown consistent profitability, benefiting from changes in the competitive landscape, including store closures by competitors like Walgreens and Rite Aid. CNBC highlights that the split will allow investors to assess the value of each business independently, potentially leading to greater market recognition of their individual strengths.
Both companies will remain publicly traded, with current shareholders owning shares in each. The split is expected to be completed in the first half of 2028, positioning CVS for a new chapter in its corporate journey.