CVS Health to split into pharmacy and insurance companies

CVS Health said Wednesday it will split into two publicly traded companies, dividing its roughly 9,000 retail pharmacies from Aetna insurance and the Caremark pharmacy benefit manager. The company expects the separation to be completed in the first half of 2028.

The post-split health care company will retain the CVS Health name and hold Aetna, Caremark, specialty pharmacy operations, and the care providers Oak Street Health and Signify Health, with David Joyner staying as chief executive. Prem Shah, who now oversees pharmacy and related operations as group president, will run CVS Pharmacy, which will include MinuteClinics, mail-order pharmacies and the Health100 consumer platform.

The split reverses a $117 billion conglomerate pieced together over two decades of acquisitions, including the 2006 Caremark deal and the roughly $78 billion Aetna purchase in 2018. Reuters reported that CVS considered a possible breakup in 2024.

For the third quarter, CVS reported earnings of $2.09 per share, above the $1.65 average estimate from analysts polled by LSEG, and raised its 2026 adjusted profit outlook to a minimum of $8.20 per share. For 2027, CVS projected adjusted earnings of no less than $8.65 per share, above the $8.53 average analyst estimate. Shares fell 12.6% to $79.94 after the announcement. NBC News reported that Leerink Partners analyst Michael Cherny attributed the drop partly to uncertainty about the deal and broader health care stock volatility following the midterm elections.

The split follows growing scrutiny by lawmakers and regulators of health care companies that pair insurance, pharmacy benefit management and care delivery, with concerns about conflicts of interest, competition and rising U.S. health spending. STAT reported that even after the separation, the high-cost specialty pharmacy unit will remain tied to Caremark and Aetna, an arrangement critics have raised concerns about. Morningstar analyst Julie Utterback said CVS has "the most exposure to vertical integration in the industry" and that management likely acted "somewhat preemptively rather than wait for a legal or legislative decision that forced their hand".

Joyner said improvements in the pharmacy and insurance units made the plan possible. "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," he said. He told Reuters, "The businesses are running really well".

The company has faced pressure in both its retail and insurance businesses. Insurers have contended with higher medical costs as patients sought more care after the pandemic, while pharmacies have seen fewer in-store visits as more prescriptions are delivered to homes. Walgreens, facing similar pressures, sold its Boots pharmacy chain and was acquired by private equity firm Sycamore Partners last year. Once the separation is completed, CVS Health shareholders will hold stock in both companies.

Update, November 4, 2026

CVS executives said on an investor call that political proposals and state laws did not factor into the decision to split, STAT reported. Chief executive David Joyner said, "We now can look at this business and the assets that are assembled, and really determine, without any distress or without anything that we have to do, on what is the right strategic decision to make". CVS did not directly answer analysts' questions about why it decided to splinter, according to STAT.