Nov 4 (Reuters) – CVS Health said on Wednesday it will split into two companies, separating retail pharmacy from its insurance and pharmacy-benefit operations in a major unwinding of the healthcare conglomerate it spent years building through acquisitions.
The split comes amid growing scrutiny from lawmakers and regulators of vertically integrated healthcare companies such as CVS.
Years of consolidation across the industry have raised concerns that companies controlling multiple parts of the healthcare supply chain could face conflicts of interest, limit competition and contribute to rising healthcare costs.
CVS built the conglomerate through a series of acquisitions, including its roughly $78 billion purchase of health insurer Aetna in 2018.
The separation of CVS’s units is expected to be completed in the first half of 2028, CVS said, and would mark a significant reversal of the company’s strategy of combining retail pharmacy, health insurance and pharmacy-benefit management under one roof.
One of the two companies will retain the CVS Health name and would be led by current CEO David Joyner, the company said.
Shares of the company were up 0.4% in premarket trading.
Health insurers have also grappled with elevated medical costs in recent years as consumers increased their use of healthcare services, prompting companies to raise premiums, trim benefits and exit less profitable plans.
Critics argue that owning a pharmacy-benefit manager as well as a retail pharmacy chain can create conflicts of interest and reduce competition.
CVS’ drugstores are also grappling with many of the pressures, including competition from Amazon and a shift toward prescription delivery that has reduced store visits, which traditionally generated additional retail purchases.
The challenges underscore the increasingly difficult economics of large US drugstore chains.
Faced with similar challenges, rival Walgreens sold its Boots pharmacy business and was acquired by private equity firm Sycamore Partners last year following a prolonged sale process.
CVS’ Pharmacy & Consumer Wellness segment, which includes its roughly 9,000 retail pharmacies, generated $139.4 billion in revenue in 2025.
Aetna and pharmacy-benefit manager Caremark are at the heart of the company’s insurance and drug-benefit operations. The company’s healthcare benefits segment reported revenue of $143.4 billion in 2025, while its PBM unit brought in $190.4 billion.
CVS had also explored options including a potential breakup in 2024, Reuters reported at the time, as the healthcare giant grappled with challenges across its businesses.
Barclays analysts viewed the potential split positively, saying the timing was favorable as CVS’s Pharmacy and Consumer Wellness business had returned to growth after years of underperformance. A separation could also help address regulatory scrutiny of CVS’s vertically integrated model.
Separately, the company also reported third-quarter results, with per share profit of $2.09, ahead of estimates of $1.65, per LSEG data.
(Reporting by Siddhi Mahatole, Aishwarya Venugopal and Sneha S K in Bengaluru; Amina Niasse in New York,; Editing by Shinjini Ganguli)
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