CVS Health plans to split into two separate publicly traded companies by the first half of 2028, in what would be one of the largest corporate splits in history, the company announced Wednesday.
The move would reverse the company’s massive $78 billion acquisition of insurer Aetna and break up the vertically integrated healthcare conglomerate founded in 2018. Specifically, the plan would separate CVS’s roughly 9,000 retail pharmacies from its large insurance business and pharmacy benefit manager Caremark, one of the three largest PBMs in the country.
According to a press release, the decision followed a “comprehensive strategic review” by the company’s board of directors.
It’s a stunning turnaround for the leading healthcare company, which has worked over the past two decades to transform itself into a one-stop healthcare destination. The move also comes as CVS’ aggressive turnaround plan under CEO David Joyner shows significant progress. The company is pursuing cost reductions, store closures, leadership changes and efforts to contain Medicare Advantage costs.
“From a position of strength and long-term focus, we plan to create two focused companies to improve consumer engagement, affordability and coordination of care,” Joyner said in the release.
Since Joyner took the helm in October 2024, shares have risen about 70%, increasing the company’s market value to $117 billion.
The two new companies would both be publicly traded.
The insurance and PBM company will retain the name CVS Health and will be led by Joyner, while the other company will be called CVS Pharmacy and will be led by Prem Shah, who is currently group president of CVS Health. Additional leadership positions and board members will be announced at a later date, CVS said.
Existing CVS shareholders will own shares in both companies following the demerger. The Financial Times first reported on the separation plans on Tuesday.
The company’s pharmacy business generated revenue of $37.66 billion in 2025, while its insurance division posted revenue of $36.29 billion and its healthcare services segment generated $51.24 billion.
On Tuesday, CVS also said it would lump its insurer and PBM with its primary care business Oak Street Health, home-call provider Signify Health and the company’s specialty drug business.
CVS also said the split will give the two companies a “focused strategic agenda” and a greater ability to “innovate, adopt technology and increase efficiency,” among other benefits.
This isn’t the first time CVS has considered splitting up the company. In October 2024, CVS hired consultants to conduct a strategic review of its business and considered dissolving its retail pharmacy and insurance units.
Still, Michael Cherny, an analyst at Leerink Partners, said in a note Tuesday that the split “feels like a complete shock.” But he said the retail pharmacy business has performed well, gaining market share from competitors and seeing gross margins stabilize thanks to CostVantage, a new pharmacy reimbursement model launched by CVS last year.
“In this context, the prospects for a standalone retail pharmacy (still with significant scale and leverage of its own) may now be brighter than before,” Cherny wrote.
He added that “the reason may also be to avoid unrelenting state legislative control over the company’s level of vertical integration.”
The potential split also comes as pharmacy benefit managers in Washington, D.C. and other states face increasing bipartisan scrutiny.
PBMs, which negotiate drug prices and manage prescription drug benefits on behalf of insurers and employers, have faced criticism for their opaque pricing, growing market power and potential conflicts of interest when owned by companies that also operate insurers and pharmacies.
Congress passed PBM reforms in February, including provisions changing the way PBMs are reimbursed under Medicare Part D. Meanwhile, states have increasingly moved to restrict PBM ownership of pharmacies.