CVS Health to Split Into Two Public Companies, Separating Insurance and PBM Business from Retail Pharmacy

CVS Health announced on Wednesday that it intends to separate into two independent, publicly traded companies, a move the company said follows a "comprehensive strategic review" by its Board of Directors, according to a company release distributed via PRNewswire. CVS Health plans to complete the separation by the first half of 2028, CNBC reported, in what the outlet described as one of the largest corporate splits in history.

How the Company Would Be Divided

Under the plan, one company will retain the CVS Health name and will be built around Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health, according to the company's release. David Joyner, currently Chairman and CEO of CVS Health, is set to become Chairman and CEO of this healthcare solutions company upon separation.

The second company will be named CVS Pharmacy and will comprise roughly 9,000 CVS pharmacies, the mail pharmacy business, MinuteClinic (including virtual care), and the Health100 technology services business. Prem Shah, currently Group President of CVS Health, will become CEO of CVS Pharmacy, the company said.

CNBC reported that the split would reverse CVS's roughly $78 billion acquisition of Aetna and dismantle the vertically integrated healthcare conglomerate the company created in 2018. Under the structure CVS outlined in its release, Aetna would sit within the CVS Health entity alongside CVS Caremark, CVS Specialty, Oak Street Health and Signify Health, separate from the retail pharmacy business.

Shareholder and Tax Structure

CVS Health said existing shareholders will own shares in both resulting companies once the separation is completed. The company also said the separation is intended to be structured as tax-free to CVS Health and its shareholders for U.S. federal income tax purposes, though it cautioned that there is no assurance the transaction will occur on the terms or timeline described, or that it will ultimately qualify for the expected tax treatment.

CVS Health said both resulting companies are expected to carry a solid investment-grade credit rating at the time of separation, with the balance-sheet capacity and free cash flow to invest in their respective strategic priorities and pay a dividend. Goldman Sachs & Co. LLC is serving as lead financial and strategic advisor, with Consello also advising, while Wachtell, Lipton, Rosen & Katz is serving as legal counsel to CVS Health on the separation, according to the release.

Analyst Reaction

Leerink Partners analyst Michael Cherny said the split "feels like a complete shock" in a Tuesday note cited by CNBC, even though he also observed that the retail pharmacy business has been performing well, winning market share from competitors and seeing stabilizing gross margins thanks to CostVantage, a pharmacy reimbursement model CVS introduced last year. Cherny also suggested, per CNBC's reporting, that the rationale for the breakup could extend beyond business performance, pointing to what he called "relentless state legislative scrutiny over the company's level of vertical integration." The news arrives as pharmacy benefit managers broadly face mounting bipartisan scrutiny in Washington, D.C., and across the states, CNBC noted; CVS's own release attributed the decision to a comprehensive strategic review by its Board of Directors.

CNBC also reported that CVS shares have risen roughly 70% since Joyner took over as CEO in October 2024, putting the company's market value at $117 billion at the time of its reporting. The Financial Times first reported the breakup plans on Tuesday, ahead of CVS's formal Wednesday announcement, according to CNBC.

Scale of the Businesses Involved

As of September 30, 2026, CVS Health said it operated approximately 9,000 retail pharmacy locations and more than 1,000 walk-in and primary care medical clinics, alongside a pharmacy benefits manager serving approximately 87 million plan members. The company also said it serves an estimated 37 million people through its health insurance products and related services.

On the financial side, CNBC reported CVS's pharmacy business generated $37.66 billion in 2025 sales, while its insurance unit booked $36.29 billion in revenue and its healthcare services segment generated $51.24 billion. Based on those reported figures (37.66 plus 36.29 plus 51.24), the three segments CNBC cited together totaled roughly $125.19 billion in 2025, a sum that is our calculation from the individually reported segment figures rather than a company-stated total.

Bottom Line

CVS Health has laid out a roadmap to separate its insurance and pharmacy-benefit operations, organized around Aetna and CVS Caremark, from its retail pharmacy and clinic business, with a target completion window in the first half of 2028. The company has named leadership for both resulting entities and says shareholders will hold shares in each, with the transaction intended to be tax-free and each company expected to carry a solid investment-grade credit rating. One analyst cited by CNBC called the announcement a shock even while noting the retail pharmacy unit's recent performance, and CVS itself has cautioned that the separation's terms, timeline and tax treatment are not assured, meaning the structure outlined this week remains a stated intention rather than a completed transaction.