CVS Health plans to divide its business into two companies in the first half of 2028, separating its pharmacy operations from its insurance and pharmacy-benefit businesses. The company announced the plan on Wednesday.
The new company, to be called CVS Pharmacy, would include about 9,000 retail pharmacies, in-store clinics and a mail-order prescription operation. CVS Health would keep its name and house insurer Aetna, pharmacy benefit manager Caremark, and businesses providing home visits and primary care to older people.
The proposed breakup comes as CVS and other healthcare conglomerates face scrutiny from lawmakers and regulators over their size and the potential for conflicts between their businesses. Critics argue that companies combining insurance, pharmacy-benefit management and pharmacies can steer patients to their own services, raise costs and limit competition.
Arkansas and Tennessee have passed laws in the past two years targeting companies that manage prescription benefits while also operating retail and mail-order pharmacies. Similar proposals have been put forward in Washington and other states, according to the source.
CVS’s expansion accelerated with its 2018 merger with Aetna. Its planned split would unwind part of that broader combination of healthcare businesses. The company generated more than $400 billion in revenue last year, ranking seventh among U.S. public companies, according to FactSet.
CVS’s pharmacy-benefit business is viewed by many investors as a key asset, while its pharmacy operations face changing consumer habits and wider industry pressures. The source also notes that CVS’s market value reached its lowest level in more than a decade at the end of 2024 before rebounding.
Sources: The New York Times Business.