CVS Health to split into two public companies by mid-2028

Why CVS Health is splitting up

CVS Health will split into two independent, publicly traded companies by the first half of 2028. The separation will divide its roughly 9,000 retail pharmacies from its Aetna health insurance unit and Caremark pharmacy benefits management (PBM) division. The move reverses the company’s $78 billion acquisition of Aetna in 2018, which created an integrated healthcare conglomerate combining insurance, PBM, and retail pharmacy services under one roof.

The decision follows a board-led strategic review and is framed as a shift from a position of strength. CVS CEO David Joyner stated the split is not driven by regulatory pressure but by the improved stability and profitability of its retail, PBM, and insurance businesses. The company has posted eight consecutive quarters of earnings growth, raised its profit outlook to at least $8.20 per share for the year, and expects $15.5 billion in operating cash flow for 2026—up 70% from 2024.

How the businesses will be divided

After the split, the insurance and PBM businesses—including Aetna, Caremark, Oak Street Health, Signify Health, and CVS’s specialty drug unit—will retain the CVS Health name. David Joyner will continue as CEO of this entity.

The retail pharmacy business, to be named CVS Pharmacy, will include the 9,000 stores, mail pharmacy operations, and MinuteClinic. Prem Shah, currently CVS Health’s group president, will lead the new company. Both entities will be publicly traded, with existing shareholders owning stock in both.

Financial performance and market reaction

CVS Pharmacy generated $37.66 billion in sales in 2025, while the insurance unit contributed $36.29 billion and the healthcare services segment added $51.24 billion. The parent company reported third-quarter sales of $108.40 billion, up from $102.87 billion a year earlier.

Despite strong financial performance, investor reaction was negative. CVS shares fell more than 12% following the announcement, erasing some of the 70% gain achieved since Joyner became CEO in October 2024.

Regulatory pressures and industry trends

The split follows years of regulatory and political scrutiny of vertical integration in healthcare. Laws in Tennessee and Arkansas now ban companies from owning both a pharmacy and a PBM, though these measures face legal challenges. CVS and other PBMs have also faced bipartisan criticism over pricing practices and conflicts of interest.

While Joyner attributed the split to business strength, analysts note that separating the retail pharmacy from the PBM could mitigate future regulatory risks. The two companies plan to preserve operational synergies through commercial agreements.