CVS Health to Split Pharmacies From Aetna and Caremark by 2028

CVS Health shares closed more than 12% lower on Wednesday after the company said it intends to break into two independent, publicly traded companies, separating its retail drugstore chain from its Aetna insurance arm and Caremark pharmacy benefit manager, according to a company statement and CNBC.

Two companies, two chief executives

Under the plan announced from the company’s Woonsocket, Rhode Island, headquarters, a healthcare solutions company that keeps the CVS Health name would combine Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health. Chairman and CEO David Joyner would lead it.

A second company, CVS Pharmacy, would hold about 9,000 CVS pharmacies, the mail pharmacy, MinuteClinic and the Health100 technology services business. Prem Shah, currently group president of CVS Health, would become its CEO. The company said other leadership roles and board members will be named later.

CVS said the separation is expected to be completed in the first half of 2028 and is intended to be tax-free to the company and its shareholders, who would own stock in both companies. Completion is subject to final board approval, an effective Form 10 registration with the Securities and Exchange Commission and confirmation of the tax-free treatment. The decision followed a strategic review by the board, the company said. The Financial Times first reported the plan on Tuesday, CNBC noted.

Quarterly results and raised outlook

The breakup announcement came alongside third-quarter results. Revenue rose 5.4% from a year earlier to $108.4 billion. GAAP diluted earnings were $1.68 per share, compared with a loss of $3.13 a year earlier, when the company recorded a $5.7 billion goodwill impairment charge. Adjusted earnings rose to $2.09 per share from $1.60.

CVS raised its full-year 2026 guidance for adjusted earnings to at least $8.20 per share, from a prior range of $7.90 to $8.10, and lifted its cash flow from operations forecast to at least $15.5 billion from at least $11.5 billion. The company said it still holds a cautious view for the rest of the year because of elevated cost trends and possible economic headwinds.

Unwinding the Aetna deal

The split would reverse much of the integration CVS built with its $78 billion acquisition of Aetna in 2018, CNBC reported. Joyner told CNBC the move was made “out of a position of strength,” and told analysts that ties between the pharmacy and benefits businesses would be kept through commercial agreements between the two companies.

Pharmacy benefit managers face scrutiny from both parties in Washington and in state capitals. Tennessee and Arkansas have passed laws that would bar common ownership of benefit managers and pharmacies, and CVS and other companies have challenged those laws in court, according to CNBC.

Sources: CVS Health separation announcement, CVS Health third-quarter 2026 earnings release, CNBC, Financial Times.