CVS Health plans to separate its retail pharmacy operations from its insurance, pharmacy benefits and healthcare services businesses, creating two independent companies by the first half of 2028.
CVS Health announced November 4 that it intends to split into two independent, publicly traded companies, separating its approximately 9,000 retail pharmacies from its health insurance, pharmacy benefits management and healthcare services operations.
The proposed separation, expected to be completed in the first half of 2028, follows a comprehensive strategic review by the company’s board of directors. CVS said the move would allow each business to pursue its own growth strategy, allocate capital more effectively and respond more quickly to changes in the healthcare industry.
Under the plan, the company will establish two businesses:
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CVS Health: A healthcare services company encompassing Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health. The business will focus on health insurance, pharmacy benefits, specialty pharmacy services and healthcare delivery.
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CVS Pharmacy: A retail pharmacy and community healthcare company operating approximately 9,000 CVS pharmacies, mail-order pharmacy services, MinuteClinic locations, virtual care services and the Health100 technology services business.
David Joyner, currently chairman and CEO of CVS Health, will retain those positions at the healthcare services company. Prem Shah, currently group president of CVS Health, will become CEO of CVS Pharmacy.
Additional executive appointments and board memberships will be announced later.
Separation Reverses Years of Healthcare Consolidation
The planned breakup represents a significant change in direction for CVS, which spent years assembling a healthcare business combining retail pharmacies, insurance coverage, pharmacy benefits management and medical services.
CVS acquired pharmacy benefits manager Caremark in 2007 and health insurer Aetna in 2018, establishing a vertically integrated healthcare organization intended to coordinate prescription drug coverage, insurance benefits and patient care.
The proposed separation would unwind the corporate combination of CVS’s retail pharmacy operations with those businesses, although the company expects the two organizations to maintain commercial relationships across the healthcare industry.
CVS said the independent pharmacy business would pursue additional partnerships with insurers, pharmacy benefits managers and pharmaceutical manufacturers.
The retail company will also seek to expand the services offered by its nearly 30,000 pharmacists.
CVS Expects Separation by 2028
CVS said shareholders would receive ownership interests in both companies following the separation, which is intended to be tax-free for federal income tax purposes.
The company expects both businesses to maintain investment-grade credit ratings, generate strong free cash flow and have sufficient financial flexibility to fund operations, pursue investments and pay dividends.
Completion remains subject to final board approval, regulatory filings and customary conditions, including confirmation of the proposed transaction’s tax treatment.
CVS said customers and patients should experience no interruption in prescription services, healthcare benefits or medical care during the transition.
As of September 30, 2026, CVS operated approximately 9,000 retail pharmacy locations and more than 1,000 walk-in and primary care medical clinics. Its pharmacy benefits management business served approximately 87 million plan members, while its insurance operations provided coverage and related services to an estimated 37 million people.
The company also announced its third-quarter financial results November 4 and raised its full-year 2026 earnings guidance.
Until the separation is completed, CVS Health will continue operating as a single company and pursuing its existing financial targets.
Goldman Sachs and Consello are serving as financial and strategic advisers, while Wachtell, Lipton, Rosen & Katz is providing legal counsel.
The announcement comes as CVS and other major healthcare companies face continuing pressure to control costs, improve profitability and adapt to changing regulatory requirements. The proposed breakup would establish two separately managed businesses, each with its own financial structure and strategic priorities.