CVS Health plans to split into two public companies by the first half of 2028.
The split separates retail pharmacies from insurance and PBM operations
The board’s decision follows a comprehensive strategic review and would reverse CVS’s $78 billion acquisition of Aetna. The plan divides the businesses into two separate public companies, with the pharmacy operation taking a different corporate name from the company that retains CVS Health. The split sets out a new structure for businesses CVS had brought together, including its insurer and pharmacy benefit manager. The board review is the stated step preceding the decision.¹²
The new spinoff, CVS Pharmacy, would house approximately 9,000 retail pharmacies, in-store clinics and a warehouse-based operation that sends prescriptions through the mail. That puts the storefronts, clinics and mail-order prescription operation under the same company. The announced structure places the retail and pharmacy-facing services in the business that carries the CVS Pharmacy name, rather than in the company that retains CVS Health.¹²
CVS Health would retain Aetna and Caremark, one of the nation’s three largest PBMs. The company also plans to place its insurer and PBM alongside Oak Street Health, its primary care business; Signify Health, its home-visit provider; and its specialty drug business. Those operations would sit together in the company keeping the CVS Health name, while the retail pharmacies, clinics and mail-order operation would sit in CVS Pharmacy.¹²
The announced structure places the retail and pharmacy-facing services in the business that carries the CVS Pharmacy name, rather than in the company that retains CVS Health.¹²
The companies have named leaders and separate business lines
The insurance and PBM company would retain the CVS Health name and be run by David Joyner. Prem Shah would lead CVS Pharmacy. Joyner said the plan is to create “two focused companies” to improve consumer engagement, affordability and care coordination. The leadership assignments place Joyner at the company containing the insurer and PBM, and Shah at the company holding the retail pharmacies and related pharmacy operations.¹²
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Read More →CVS’s pharmacy business recorded $37.66 billion in 2025 sales, while its insurance unit booked $36.29 billion in revenue. Its healthcare services segment generated $51.24 billion. The figures describe three separate parts of the company’s business: pharmacy sales, insurance revenue and healthcare services. They provide a measure of the scale of operations that the proposed structure divides between the pharmacy company and the company retaining CVS Health.¹²
CVS is also pursuing $2 billion in cost cuts. Separately, the company engaged advisors in a strategic review of its business in October 2024, and its board later described the split decision as following a comprehensive strategic review. The announced cost-cutting effort and the corporate separation are both part of CVS’s current business changes; the company’s stated explanation for the split is that it followed the board review.¹²
The announcement follows a period of changing valuation and pharmacy rules
CVS shares have climbed roughly 70% since Joyner took the helm in October 2024, bringing the company’s market value to $117 billion. The share-price change and market value describe the company’s position; neither figure establishes a cause for the breakup decision. At the end of 2024, CVS’s market value had fallen to its lowest level in more than a decade. These figures mark different points in the company’s recent valuation history.¹²
The structure follows an era of healthcare and pharmacy businesses joining under large companies.
Pharmacy policy has also changed. CVS introduced CostVantage, a new pharmacy reimbursement model, last year. Congress enacted PBM reforms in February. Arkansas and Tennessee have each passed laws aimed at preventing conglomerates from both managing prescription benefits and running retail and mail-order pharmacies. The changes concern reimbursement and the combination of PBM and pharmacy operations, but the ledger does not state that they caused CVS to choose a split.¹²
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Read More →The structure follows an era of healthcare and pharmacy businesses joining under large companies. CVS and Aetna merged in 2018, and Cigna bought Express Scripts, a pharmacy benefit manager, that same year. CVS Health generated more than $400 billion in revenue last year, ranking seventh among U.S. public companies by revenue, according to FactSet. Its planned separation would unwind part of the combination that began with the CVS-Aetna merger.¹²³
The scale of the breakup has drawn a sharp analyst reaction
Leerink Partners analyst Michael Cherny said the split “feels like a complete shock.” The comment captures one reaction to a plan that divides a company with retail pharmacies, an insurer, a PBM and healthcare services into two public companies. CVS’s proposed arrangement keeps the insurance and PBM operations alongside healthcare services in CVS Health, while CVS Pharmacy takes the retail and mail-order pharmacy network. The separation comes as other major pharmacy chains have faced industry-wide challenges, including Rite Aid, which has been shuttered.¹²
Watch where healthcare jobs land
If you work in pharmacy operations, the CVS split separates the retail and mail-order side from the insurance and PBM side, with each run by a different leader. That means your employer, your reporting line, and your career track could change depending on which company your role sits in. Before accepting a role or a transfer, ask which of the two companies will employ you and how the split affects your team's mandate.¹²
For job seekers, the split signals that combining pharmacy and insurance under one roof is losing favor, as Arkansas and Tennessee have passed laws against that structure. If you are choosing between a PBM, insurer, or retail pharmacy role, note that the CVS Health side keeps the PBM and insurer together, while the pharmacy side stands alone. Also, CVS is cutting $2 billion in costs, so negotiate pay and role security with that pressure in mind.¹²
Watch where healthcare jobs land If you work in pharmacy operations, the CVS split separates the retail and mail-order side from the insurance and PBM side, with each run by a different leader.
Sources
Written by Career Ahead AI. AI can make mistakes, so verify key facts. Report errors to support@careeraheadonline.com
