CVS Health will divide its operations into two separate, publicly traded entities by mid-2028, separating its retail pharmacy network from its insurance, pharmacy benefit management, and care delivery segments. This restructuring stems from a strategic assessment conducted by the company’s board of directors.
The board’s decision follows a strategic review that began in October 2024, during which CVS hired external advisors to evaluate options, including a possible separation of its retail pharmacy and insurance operations.
CVS Health’s planned division will result in shareholders owning stock in two separate companies, with the transaction structured to be tax-free for both the company and its shareholders under US federal income tax laws. Finalization of the split is contingent on standard conditions, including approval from the board and the successful filing of a Form 10 registration statement with the Securities and Exchange Commission.
The split announcement was made alongside CVS Health’s third-quarter 2026 earnings release, which showed revenue rising to $108.40 billion, up from $102.87 billion a year earlier.
Company Structure
The health care solutions company, referred to as CVS Health, will comprise insurer Aetna, pharmacy benefit manager CVS Caremark, CVS Specialty, primary care provider Oak Street Health, and in-home health business Signify Health. David Joyner, currently chairman and CEO of CVS Health, will serve as chairman and CEO of that company.
Joyner’s statement and the detailed outline of the new CVS Health entity were released in a company news release on November 4, 2026 (source).
“Our history is defined by proactively evolving to stay ahead of what’s next in health care, and in today’s environment, that means delivering more affordability, greater access, and a simpler experience,” said Joyner. “Over the last 2 years, we have made meaningful progress: we built a world-class leadership team, strengthened our financials, revitalized operations across the enterprise, and drove total shareholder return.”
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CVS Pharmacy
The newly formed company, CVS Pharmacy, will consist of around 9,000 retail and mail-order pharmacies, MinuteClinic, and Health100, a technology services division. Prem Shah, presently serving as group president of CVS Health, will take on the role of CEO. Further leadership appointments and board members will be disclosed at a later date.
The plan for the stand-alone CVS Pharmacy, including its technology arm Health100, was also highlighted in a CNBC report published November 4, 2026 (source).
CVS Pharmacy aims to broaden the services provided by its extensive network of nearly 30,000 pharmacists and seeks to establish a wider array of partnerships with payers, pharmacy benefit managers, and manufacturers. Throughout the separation process, customers, patients, and clients will experience no disruption in receiving their medications, care, benefits, and services.
Industry Implications
This strategic move effectively reverses CVS’s $78 billion acquisition of Aetna, dismantling the vertically integrated structure established in 2018. It follows a period of transformation under Joyner’s leadership, marked by cost reductions, store closures, leadership reshuffling, and efforts to manage Medicare Advantage expenses. Since Joyner’s appointment, CVS shares have surged by approximately 70%, raising the company’s market value to $117 billion.
According to Leerink Partners analyst Michael Cherny, the retail pharmacy sector has been gaining market share and witnessing stabilization in gross margins under the CostVantage pharmacy reimbursement model introduced by CVS last year. Cherny suggests that the decision may also be motivated by a desire to evade the intense state legislative scrutiny surrounding the company’s vertical integration.
Pharmacy benefit managers have faced criticism from both sides of the political aisle regarding non-transparent pricing, increasing market dominance, and potential conflicts of interest arising from shared ownership with insurers and pharmacies. In February, Congress implemented reforms targeting PBMs, including modifications to their compensation structure under Medicare Part D.
