CVS Health on Wednesday announced plans to split into two separate public companies by the first half of 2028, which would dismantle the vertically integrated healthcare conglomerate it created with the $78 billion acquisition of Aetna in 2018.
The move would separate the company's roughly 9,000 retail pharmacies from its insurance business and pharmacy benefit manager, Caremark. The two new entities will be called CVS Health, focused on insurance and PBM services, and CVS Pharmacy, led by Prem Shah. CEO David Joyner said in a news release, "From a position of strength, and a focus on the long term, we plan to create two focused companies to improve consumer engagement, affordability, and care coordination."
The split comes as CVS's turnaround plan under Joyner shows progress, with the company pursuing $2 billion in cost cuts, store closures, and leadership changes. Shares have jumped about 70% since Joyner took the helm in October 2024, bringing the company's market value to $117 billion. The pharmacy business had $37.66 billion in sales in 2025, while the insurance unit booked $36.29 billion.
Leerink Partners analyst Michael Cherny said the split “feels like a complete shock” in a Tuesday note. He added that “the rationale could also be to avoid what has been relentless state legislative scrutiny over the company's level of vertical integration.” But he said the retail pharmacy business has been performing well, winning market share from competitors and seeing stabilizing gross margins thanks to the CostVantage reimbursement model.
The potential breakup also comes amid mounting bipartisan scrutiny of pharmacy benefit managers in Washington and states. Congress enacted PBM reforms in February, including provisions to change how PBMs are compensated under Medicare Part D. States have increasingly moved to restrict PBM ownership of pharmacies.
CVS said the split will allow the two companies to have a focused strategic agenda and greater ability to innovate and adopt technology. Prem Shah will lead CVS Pharmacy, with additional leadership positions and board members to be announced later.
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CVS revenue by segment, 2025
US$ billion
Segment sales as reported for 2025. Source: CVS Health
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Analysis
Why This Matters
The split could reshape the US healthcare landscape by separating pharmacy and insurance operations, potentially increasing competition and transparency.
Consumers may see changes in how their pharmacy and insurance services are provided and priced.
The decision highlights growing regulatory pressure on vertically integrated healthcare companies, particularly pharmacy benefit managers.
Background
CVS Health acquired Aetna in 2018 for $78 billion, creating a vertically integrated healthcare giant combining pharmacies, insurance, and PBM services. The company has faced scrutiny over its market power and conflicts of interest, leading to strategic reviews and recent reforms targeting PBMs.
Key Perspectives
CVS Health: The split is from a position of strength and will improve consumer engagement, affordability, and care coordination by allowing each company to focus on its specific business, according to CEO David Joyner.
Michael Cherny, Leerink Partners analyst: Called the split a shock but noted the retail pharmacy business is performing well, and suggested the move may be to avoid state legislative scrutiny over vertical integration.
What to Watch
The final structure and leadership of the two new companies, to be announced by 2028.
Regulatory and legislative responses, particularly regarding PBM practices and the separation of assets.
Market reactions and performance of the standalone retail pharmacy and insurance entities.
12 claims in this story checked against 1 source: 12 supported.
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SupportedCVS Health plans to split its retail pharmacy business from its insurance business.Business News: “CVS Health plans to split into two separate public companies by the first half 2028”
SupportedThe decision followed a strategic review.Business News: “The decision follows a "comprehensive strategic review" by the company's board of directors, according to a news release.”
SupportedCVS shares have risen roughly 70% since David Joyner took over in October 2024.Business News: “Shares have jumped roughly 70% since Joyner took the helm in October 2024”
SupportedCVS announced plans on Wednesday to split into two public companies by the first half of 2028.Business News: “CVS Health plans to split into two separate public companies by the first half 2028 ... the company announced Wednesday.”
SupportedCVS's vertically integrated healthcare conglomerate was created with its $78 billion acquisition of Aetna in 2018.Business News: “The move would reverse the company's massive $78 billion acquisition of its insurer, Aetna, and dismantle the vertically integrated healthcare conglomerate it created in 2018.”
SupportedThe split would separate about 9,000 retail pharmacies from CVS's insurance business and Caremark PBM.Business News: “The plan would specifically separate CVS's roughly 9,000 retail pharmacies from its major insurance business and pharmacy benefit manager, Caremark”
SupportedThe insurance and PBM company will keep the CVS Health name and be run by Joyner; the pharmacy company will be called CVS Pharmacy and led by Prem Shah.Business News: “The insurance and PBM company will retain the CVS Health name and be run by Joyner, while the other company will be called CVS Pharmacy and be led by Prem Shah”
SupportedJoyner said: “From a position of strength, and a focus on the long term, we plan to create two focused companies to improve consumer engagement, affordability, and care coordination.”Business News: “"From a position of strength, and a focus on the long term, we plan to create two focused companies to improve consumer engagement, affordability, and care coordination," Joyner said in the release.”
SupportedCVS's pharmacy business had $37.66 billion in 2025 sales, while its insurance unit had $36.29 billion in revenue.Business News: “The company's pharmacy business raked in $37.66 billion in 2025 sales, while its insurance unit booked $36.29 billion in revenue”
SupportedCherny said the split “feels like a complete shock” in a Tuesday note.Business News: “Leerink Partners analyst Michael Cherny said the split "feels like a complete shock" in a Tuesday note.”
SupportedCherny said the rationale could be to avoid relentless state legislative scrutiny of CVS's vertical integration.Business News: “He added that "the rationale could also be to avoid what has been relentless state legislative scrutiny over the company's level of vertical integration."”
SupportedThe potential breakup comes amid mounting bipartisan scrutiny of PBMs in Washington and across states.Business News: “The potential breakup also comes as pharmacy benefit managers face mounting bipartisan scrutiny in Washington, D.C., and across states.”