CVS Health will split into two publicly traded companies by the first half of 2028, unwinding the $78 billion acquisition of Aetna that created the vertically integrated giant in 2018. The board approved the separation after what the company called a comprehensive strategic review, sending roughly 9,000 retail pharmacies into a new entity called CVS Pharmacy while the insurance arm, pharmacy benefit manager Caremark, and primary care assets remain under the CVS Health banner. Existing shareholders will own stock in both.
The numbers behind the split
The pharmacy business generated $37.66 billion in 2025 sales. The insurance unit booked $36.29 billion in revenue, and the healthcare services segment, which includes Caremark, Oak Street Health, Signify Health and specialty pharmacy, produced $51.24 billion. Shares have risen about 70 percent since David Joyner became chief executive in October 2024, lifting the market value to $117 billion. Joyner will run the insurance and services company; Prem Shah, currently group president, will lead CVS Pharmacy.
A turnaround that preceded the breakup
The announcement arrives as Joyner's aggressive overhaul shows traction. The company is pursuing $2 billion in cost cuts, closing stores, reshuffling leadership and working to contain Medicare Advantage expenses. Leerink Partners analyst Michael Cherny called the split a "complete shock" in a Tuesday note but acknowledged the retail pharmacy operation has been gaining market share and stabilizing gross margins under CostVantage, a new reimbursement model introduced last year. That performance may have made a standalone pharmacy chain look more viable than it did a year ago.
Regulatory pressure as a backdrop
The rationale could also be to avoid what Cherny described as "relentless state legislative scrutiny over the company's level of vertical integration." Pharmacy benefit managers face bipartisan pressure in Washington and state capitals over opaque pricing, market concentration and conflicts of interest when the same owner controls the insurer, the PBM and the pharmacy. Congress enacted PBM reforms in February, including changes to Medicare Part D compensation, and states have been moving to restrict spread pricing and require transparency. Separating the pharmacy from the PBM and insurer removes the structural conflict that has drawn the most political fire.
What comes next
CVS said the split will allow both companies a "focused strategic agenda" and greater ability to innovate and increase efficiency. The company did not disclose the tax structure of the separation, any break fees, or the precise capital allocation between the two entities. Additional board members and leadership roles will be named later. The Financial Times first reported the plans on Tuesday.