CVS Health plans to separate its retail pharmacy operations from its insurance and pharmacy benefit management (PBM) business, a move that reflects a comprehensive strategic review by the board. This decision is notable as it dismantles the vertically integrated healthcare model established after the acquisition of Aetna in 2018.
The split will create two publicly traded entities: one retaining the CVS Health name, focused on insurance and PBM operations, and the other named CVS Pharmacy, which will oversee retail pharmacy activities. CEO David Joyner emphasized that this restructuring aims to improve consumer engagement and operational efficiency.
Since Joyner's appointment in October 2024, CVS shares have surged approximately 70%, boosting the company's market value to $117 billion. The pharmacy segment generated $37.66 billion in sales in 2025, while the insurance unit reported $36.29 billion in revenue.
Analysts, including Michael Cherny from Leerink Partners, expressed surprise at the split but acknowledged the retail pharmacy's strong performance and potential for standalone success. The decision also comes amid increasing scrutiny of PBMs by lawmakers, which may have influenced CVS's choice to separate its businesses to mitigate regulatory pressures